London open: Stocks flat as investors eye US bank earnings

London stocks were steady in early trade as investors digested more dovish comments from US Federal Reserve Chair Janet Yellen and sifted through some corporate news ahead of some key earnings from US banking heavyweights.

At 0830 BST, the FTSE 100 was flat at 7,412.37 while the pound was unchanged against the euro and up 0.1% versus the dollar at 1.1353 and 1.2954, respectively.

In her second day of testimony on Thursday to the Senate Banking Committee, Yellen indicated again that the Fed would maintain a gradual path of policy normalisation, adding to the dovish comments she made the day before.

Eyes will remain on the US later on Friday as JP Morgan, Citigroup and Wells Fargo are all due to post their latest earnings numbers.

Mike van Dulken at Accendo Markets said: “In focus today will be the start of Q2 earnings season in the US. The big banks open proceedings via JPMorgan, Wells Fargo and Citigroup, all rallying in recent weeks on expectations of big dividends/buybacks following Fed approval."

“Consensus has been guided lower as per usual, so prepare for consensus/guidance beats. But Wall St still expects a mixed showing amid pressure on trading from very low market volatility, limited deal-making (M&A/IPOs) and slower lending volumes. Are Fed hikes helping net interest margins and profitability? Outlook will likely be key.”

On the UK corporate front, international sales, marketing and support services group DCC was a touch weaker as it said first quarter trading was in line with expectations and it expected the full year to produce “profit and growth”.

Electrical and telecoms retailer Dixons Carphone edged lower after agreeing to sell its entire holdings in The Phone House Spain, along with its related companies Connected World Services Europe and Smarthouse, to Bilbao-based technological services firm Global Dominion Access, it announced on Friday.

Acacia Mining was in the red after it said it will start paying a higher royalty to the Tanzanian government for its production of gold and copper of 6%, up from 4%, after new mining regulations were drawn up following an export dispute.

Emerging markets asset manager Ashmore ticked higher after reporting a 5% jump in fourth-quarter assets thanks to a positive investment performance and net inflows.

Recruiter Hays advanced as it said it expects full-year profits to be ahead of market forecasts, while Workspace edged up after noting strong customer demand in the first quarter.

Carillion surged as it hired HSBC as its second financial adviser and joint corporate broker with immediate effect, although it also lost a contract.

Market Movers

FTSE 100 (UKX) 7,407.63 -0.08%
FTSE 250 (MCX) 19,402.69 -0.08%
techMARK (TASX) 3,485.92 -0.09%

FTSE 100 - Risers

Shire Plc (SHP) 4,233.00p 1.39%
Standard Life (SL.) 416.10p 1.27%
Pearson (PSON) 635.00p 0.95%
Tesco (TSCO) 174.15p 0.84%
Taylor Wimpey (TW.) 184.50p 0.71%
InterContinental Hotels Group (IHG) 4,330.00p 0.70%
Mediclinic International (MDC) 746.00p 0.67%
Imperial Brands (IMB) 3,498.00p 0.50%
Burberry Group (BRBY) 1,677.00p 0.48%
Unilever (ULVR) 4,294.50p 0.46%

FTSE 100 - Fallers

Convatec Group (CTEC) 293.50p -1.68%
Fresnillo (FRES) 1,434.00p -1.65%
AstraZeneca (AZN) 4,935.00p -1.56%
Royal Bank of Scotland Group (RBS) 254.90p -0.74%
Royal Mail (RMG) 408.20p -0.68%
Bunzl (BNZL) 2,254.00p -0.62%
Rentokil Initial (RTO) 274.60p -0.62%
WPP (WPP) 1,555.00p -0.58%
Ashtead Group (AHT) 1,578.00p -0.57%
Sky (SKY) 969.50p -0.56%

FTSE 250 - Risers

Carillion (CLLN) 60.20p 8.57%
NewRiver REIT (NRR) 349.10p 1.96%
CLS Holdings (CLI) 203.80p 1.90%
Bovis Homes Group (BVS) 931.00p 1.36%
Derwent London (DLN) 2,688.00p 1.36%
B&M European Value Retail S.A. (DI) (BME) 345.00p 1.29%
Aberdeen Asset Management (ADN) 315.10p 1.29%
Telecom Plus (TEP) 1,124.00p 1.26%
Renishaw (RSW) 3,918.00p 1.24%
Workspace Group (WKP) 881.00p 1.15%

FTSE 250 - Fallers

Clarkson (CKN) 2,523.00p -2.21%
Hochschild Mining (HOC) 262.80p -1.76%
Balfour Beatty (BBY) 261.00p -1.51%
Tullow Oil (TLW) 158.40p -1.43%
Acacia Mining (ACA) 278.10p -1.35%
Redefine International (RDI) 39.08p -1.34%
Millennium & Copthorne Hotels (MLC) 444.10p -1.27%
TR Property Inv Trust (TRY) 338.20p -1.02%
JPMorgan Emerging Markets Inv Trust (JMG) 808.00p -0.98%
Ascential (ASCL) 323.40p -0.98%