London open: Stocks in the red after Fed minutes

London stocks fell in early trade on Thursday, tracking losses in the US after Federal Reserve minutes revealed the central bank was ready to start cutting its humongous balance sheet before the end of the year.

At 0825 BST, the FTSE 100 was down 0.8% to 7,276.27, while the pound was flat at $1.2487.

The minutes from the March meeting, during which officials approved a quarter-point interest rate hike, revealed that the Fed plans to start shedding the $4.5trn in bonds it is holding on its balance sheet. The minutes stated that the reductions should be “gradual and predictable” through the “phasing out” of reinvestments, meaning the Fed won't just stop repurchasing all debt instruments when they mature.

Although no details were given about amounts, policy makers suggested the unwinding would begin "later this year".

Financial stocks, led by insurers Aviva and Prudential, and banks RBS and Standard Chartered led the fallers in London.

Accendo Markets analyst Mike van Dulken said: "Markets had been embracing the prospect of further Fed rate hikes this year, assuming these would be accompanied - even driven - by Trump stimulus policy driving stateside economic growth.

"The idea of the Fed also beginning to cease re-investment of maturing paper, slowly shrinking its asset pile, at the same time as markets question the validity of the ‘Trump trade’ and deal with plentiful geopolitical risk, has served to spark risk aversion just hours before Trump’s his most crucial summit so far."

Trump is due to meet with Chinese President Xi Jinping in Florida later on Thursday for a two-day summit.

Investors were also digesting data from China, which showed the service sector expanded at a slower pace in March.

The Caixin China services purchasing managers' index fell to 52.2 from 52.6 in February, marking its lowest level in six months, but still above the 50 threshold that separates contraction from expansion.

On the UK corporate front, Legal & General fell after saying it had completed the sale of its Netherlands unit to Chesnara for €161m (£137.6m).

Budget airline easyJet nudged lower as it reported a 10.6% increase in passenger numbers for March to 6.33m, while the load factor – which gauges how full the planes actually are – rose 1.4 percentage points to 92.7%.

Ferrexpo slumped as it posted a decline in iron ore pellet production during the first quarter of 2017 as a result of scheduled pellet line maintenance in the first two months of the year.

Polymer maker Victrex retreated after announcing the acquisition of Zyex, a manufacturer of polyetheretherketone (PEEK) based fibres for the aerospace, automotive and industrial markets, for £10m in order to explore 3D printing capabilities.

Unilever was little changed as it said that alongside new plans to "go faster and further" with its restructuring programme, it has upped its annual dividend guidance and launched a €5bn share buyback. It also confirmed it will sell off its spreads business.

HomeServe rallied after saying full-year results are anticipated to be at the upper end of market expectations thanks to strong momentum in the business. The range of analyst forecasts for adjusted pre-tax profit for the year is £105m to £112m.

Electrocomponents was also in the black after it said results for the year to the end of March 2017 are likely to be ahead of its previous expectations, with pre-tax profit ahead of the current market consensus range of between £122.3m and £124.2m, following a strong final quarter.

Go-Ahead was boosted by an upgrade at Liberum, while Countryside was lifted by upgrade from JP Morgan and Bovis Homes was hit by a downgrade from JPM.

Aviva, Lloyds, Electra Private Equity, Vesuvius, Sanne, and Berendsen all went ex-dividend on Thursday.

Market Movers

FTSE 100 (UKX) 7,276.27 -0.76%
FTSE 250 (MCX) 18,990.51 -0.41%
techMARK (TASX) 3,426.40 -0.31%

FTSE 100 - Risers

Land Securities Group (LAND) 1,080.00p 0.84%
British Land Company (BLND) 627.00p 0.80%
Randgold Resources Ltd. (RRS) 7,125.00p 0.42%
United Utilities Group (UU.) 995.50p 0.30%
National Grid (NG.) 1,014.00p 0.15%
SSE (SSE) 1,487.00p 0.13%
Rolls-Royce Holdings (RR.) 779.00p 0.06%
Pearson (PSON) 682.50p 0.00%
Smith & Nephew (SN.) 1,224.00p 0.00%
Hammerson (HMSO) 577.00p 0.00%

FTSE 100 - Fallers

Aviva (AV.) 510.00p -3.68%
Lloyds Banking Group (LLOY) 63.29p -3.36%
GKN (GKN) 347.40p -2.66%
WPP (WPP) 1,694.00p -2.59%
Royal Bank of Scotland Group (RBS) 235.90p -1.50%
Old Mutual (OML) 187.20p -1.47%
Prudential (PRU) 1,653.50p -1.43%
Sainsbury (J) (SBRY) 252.70p -1.40%
Schroders (SDR) 3,040.00p -1.39%
Standard Chartered (STAN) 738.70p -1.38%

FTSE 250 - Risers

BTG (BTG) 613.50p 3.98%
Homeserve (HSV) 581.50p 2.65%
Countryside Properties (CSP) 250.40p 2.45%
Go-Ahead Group (GOG) 1,730.00p 2.19%
Petra Diamonds Ltd.(DI) (PDL) 134.30p 2.13%
St. Modwen Properties (SMP) 342.10p 2.12%
Northgate (NTG) 554.00p 1.74%
AO World (AO.) 137.00p 1.48%
Clarkson (CKN) 2,775.00p 1.39%
SEGRO (SGRO) 464.10p 1.38%

FTSE 250 - Fallers

Electra Private Equity (ELTA) 2,472.00p -51.62%
Diploma (DPLM) 1,032.21p -5.99%
Morgan Advanced Materials (MGAM) 304.50p -3.30%
Vesuvius (VSVS) 512.50p -3.12%
Sanne Group (SNN) 679.00p -2.79%
Ferrexpo (FXPO) 168.90p -2.76%
Allied Minds (ALM) 179.90p -2.76%
Berendsen (BRSN) 749.50p -2.66%
Bovis Homes Group (BVS) 869.00p -2.58%
Vedanta Resources (VED) 826.50p -2.54%