London open: Stocks flat as investors eye BoE rate announcement

London stocks were steady in early trade as investors refrained from making any bold moves ahead of the Bank of England's latest policy announcement and quarterly inflation report, and the release of some key manufacturing data.

At 0830 BST, the FTSE 100 was flat at 7,383.30, while the pound was up 0.1% versus the dollar at 1.2945.

Manufacturing and industrial production figures are at 0930 BST, along with the goods trade balance. The BoE's inflation report and policy announcement are at 1200 BST.

FXTM chief market strategist Hussein Sayed said although market participants are confident that interest rates will be left on hold, there seems to be divided opinion on what messages the market will receive due to the mixed economic data releases in the past couple of weeks.

"On the positive side, unemployment is at its lowest levels in twelve years, economic activity is improving based on PMI’s, and inflationary pressures are building with consumer prices above 2%," he said.

"On the downside, GDP came well below expectations in Q1, consumers are hesitant to spend, wage growth is not keeping pace with inflation, and housing activity is heading south. The central bank will also take into consideration the political hurdles of the snap general election on 8 June and UK’s negotiations with the EU."

"Overall, I think there’s little reason for the BOE to shift expectations one way or the other. The base case scenario is to wait and see until we get more clarity on both the economic and political outlook."

Investors were digesting the latest survey from the Royal Institution of Chartered Surveyors, with the main house price index holding steady at +22 in April from March, which was the lowest reading since September. Economists had expected a drop to +20.

Meanwhile, RICS's measure of how prices will perform in the next three months fell to +4 from +11, marking the softest reading since July 2016 and suggesting contributors anticipate a slower rate of house price inflation ahead.

In corporate news, BT Group was in the red as it posted a big drop in annual profits, as expected, an announced it was stepping up its cost cutting programme by axing 4,000 jobs, while also revealing it was trimming executive pay after a challenging year.

Hikma Pharmaceuticals and Vectura tumbled after US regulators decided not to approve their generic copy of GlaxoSmithKline's lung drug Advair due to "major" issues with its application.

Coca-Cola HBC edged lower despite reporting a rise in net sales revenue for the first quarter.

Paper and packing group Mondi was under pressure after it said first-quarter underlying operating profit fell 6% to €252m as strong sales volume growth was more than offset by a significantly lower forestry fair value gain, inflationary cost pressures and lower average selling prices.

SuperGroup also retreated despite reporting a rise in full-year sales and revenues thanks to the weaker pound, while Rathbone Brothers ticked just a touch lower as it said total funds under management rose 4.7% in the first quarter.

Hill & Smith fell despite saying that trading from 1 January to the end of April was in line with its expectations, with revenue up 7% on an organic basis, while insurer Beazley lost ground as it reported a 2% drop in gross premium written in the three months to the end of March.

Centrica, Sainsbury's, Admiral, Merlin, BP, Carillion, Saga, Ibstock and Aberdeen Asset Management were all weaker as their stock went ex-dividend.

On the upside, interdealer broker TP ICAP advanced as it posted a rise in revenue for the first four months of the year, while challenger bank Aldermore nudged up after saying first-quarter lending grew 6% compared to the previous quarter.

SIG was a little firmer as the building products distributor posted a rise in revenue for the period from 1 January to the end of April but said it expects its first half performance to be lower than that achieved in the same period a year ago.

Market Movers

FTSE 100 (UKX) 7,383.30 -0.03%
FTSE 250 (MCX) 19,847.64 -0.15%
techMARK (TASX) 3,545.56 -0.27%

FTSE 100 - Risers

Antofagasta (ANTO) 775.50p 1.97%
Rio Tinto (RIO) 3,021.50p 1.46%
Standard Chartered (STAN) 743.00p 1.17%
CRH (CRH) 2,914.00p 1.15%
Anglo American (AAL) 1,052.00p 1.01%
Fresnillo (FRES) 1,444.00p 0.91%
Convatec Group (CTEC) 295.10p 0.79%
Burberry Group (BRBY) 1,637.00p 0.74%
BHP Billiton (BLT) 1,172.50p 0.73%
HSBC Holdings (HSBA) 675.20p 0.64%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,802.00p -7.87%
Centrica (CNA) 191.60p -5.71%
Mondi (MNDI) 1,955.00p -3.88%
Sainsbury (J) (SBRY) 264.20p -2.76%
Admiral Group (ADM) 2,053.00p -2.52%
Merlin Entertainments (MERL) 499.70p -1.34%
BP (BP.) 455.30p -1.14%
SSE (SSE) 1,449.00p -1.02%
Smurfit Kappa Group (SKG) 2,172.00p -0.73%
Informa (INF) 644.00p -0.69%

FTSE 250 - Risers

Ascential (ASCL) 344.10p 2.14%
Kaz Minerals (KAZ) 450.00p 2.02%
Vesuvius (VSVS) 602.00p 1.86%
Vedanta Resources (VED) 637.00p 1.76%
Mitchells & Butlers (MAB) 279.40p 1.64%
Tritax Big Box Reit (BBOX) 144.50p 1.47%
Electrocomponents (ECM) 542.50p 1.40%
Ferrexpo (FXPO) 165.60p 1.28%
Petrofac Ltd. (PFC) 822.50p 1.11%
Renishaw (RSW) 3,530.00p 1.09%

FTSE 250 - Fallers

Vectura Group (VEC) 131.20p -9.45%
Carillion (CLLN) 210.60p -4.96%
TalkTalk Telecom Group (TALK) 162.80p -3.55%
Hill & Smith Holdings (HILS) 1,342.00p -3.24%
Supergroup (SGP) 1,599.00p -3.15%
Saga (SAGA) 206.50p -3.05%
Ibstock (IBST) 228.00p -2.52%
Aberdeen Asset Management (ADN) 292.20p -2.40%
Hiscox Limited (DI) (HSX) 1,181.00p -2.15%
Dunelm Group (DNLM) 625.00p -1.73%