London open: Stocks muted as investors mull Fed comments; Vectura surges

London stocks were little changed in early trade on Wednesday as investors digested the latest comments from Federal Reserve officials and sifted through corporate news.

At 0900 BST, the FTSE 100 was up 0.1% at 7,038.87.

Neil Wilson, chief market analyst at Markets.com, said: "Fed speakers stuck to the script, saying they’ll look through transitory inflation spikes, but vice chair Richard Clarida underscored a change in the tune we have seen since the April meeting minutes were released by saying that the central bank could start tapering in the coming months.

Clarida said to CNBC: "We are talking about talking about tapering." This was a refence to chair Jerome Powell’s comments last year when he said the Fed was "not even thinking about thinking about raising rates".

"So, we have the Fed carefully guiding markets - ‘don't worry about inflation but at the same time we are going to be exiting full emergency mode’," said Wilson. "This offers a bit of a muddy picture for the market that’s reflected in the price action showing no real conviction."

In equity markets, Croda was the top performer on the FTSE 100 after an upgrade to ‘buy’ at Goldman Sachs.

Sticking with broker notes, Flutter Entertainment was boosted by an upgrade to ‘hold’ at HSBC, while Close Brothers was propped up by an upgrade to ‘hold’ at Jefferies.

Elsewhere, food and clothing group Marks & Spencer gained despite saying it swung to a heavy full-year loss as it felt the full impact of the coronavirus pandemic. The company reported pre-tax losses of £209.4m for the 53 weeks to April 3 compared with a profit £67.2m a year earlier. Group revenue fell to £9.1bn from £8.9bn.

Softcat rallied as the IT provider upgraded annual earnings guidance after reporting double-digit revenue growth in the third quarter.

Pharmaceutical company Vectura surged after agreeing to be bought by US private equity firm The Carlyle Group in a £958m deal.

Outside the FTSE 350, Spire Healthcare jumped more than 25% after agreeing to be bought by Australia’s Ramsay Health Care for just under £1bn.

On the downside, British Land was weaker after it said annual profit fell by more than one-third and the value of its properties dropped by more than 10% as the Covid-19 crisis took its toll on the commercial landlord.

SSE fell even as it increased its dividend in line with inflation, reported higher annual profit and stuck to its £7.5bn investment plan.

Inspection, product testing and certification group Intertek was in the red despite posting year-to-date like-for-like revenue growth of 2.7% and saying it was on track to deliver its 2021 revenue targets.

Drinks company C&C tumbled as it reported a 56% slide in full-year revenue and said it swung to an operating loss as it took a hit from the pandemic.

Market Movers

FTSE 100 (UKX) 7,038.87 0.13%
FTSE 250 (MCX) 22,576.64 0.61%
techMARK (TASX) 4,370.90 0.96%

FTSE 100 - Risers

Croda International (CRDA) 7,050.00p 3.10%
Flutter Entertainment (CDI) (FLTR) 13,645.00p 2.67%
Aveva Group (AVV) 3,405.00p 2.31%
Polymetal International (POLY) 1,729.50p 1.98%
Entain (ENT) 1,654.00p 1.25%
Coca-Cola HBC AG (CDI) (CCH) 2,571.00p 1.22%
Imperial Brands (IMB) 1,679.50p 1.21%
Burberry Group (BRBY) 2,118.00p 1.19%
Smith & Nephew (SN.) 1,573.00p 1.16%
Melrose Industries (MRO) 164.40p 0.89%

FTSE 100 - Fallers

Intertek Group (ITRK) 5,830.00p -1.98%
British Land Company (BLND) 511.00p -1.66%
M&G (MNG) 233.80p -1.06%
Rolls-Royce Holdings (RR.) 104.34p -1.02%
NATWEST GROUP PLC ORD 100P (NWG) 201.00p -0.94%
Rio Tinto (RIO) 5,858.00p -0.80%
Land Securities Group (LAND) 699.00p -0.79%
Evraz (EVR) 651.40p -0.73%
3i Group (III) 1,236.50p -0.60%
Standard Chartered (STAN) 505.20p -0.55%

FTSE 250 - Risers

Vectura Group (VEC) 160.40p 31.48%
Mediclinic International (MDC) 334.80p 8.56%
Softcat (SCT) 1,891.00p 4.82%
Marks & Spencer Group (MKS) 163.00p 4.52%
GCP Student Living (DIGS) 161.20p 3.33%
Petropavlovsk (POG) 26.06p 3.09%
Ibstock (IBST) 230.20p 2.77%
Network International Holdings (NETW) 397.30p 2.58%
CLS Holdings (CLI) 244.50p 2.30%
Mitie Group (MTO) 68.10p 2.25%

FTSE 250 - Fallers

C&C Group (CDI) (CCR) 271.60p -10.83%
Provident Financial (PFG) 234.60p -3.14%
Ferrexpo (FXPO) 434.20p -1.94%
Sabre Insurance Group (SBRE) 257.50p -1.90%
Pets at Home Group (PETS) 458.60p -1.21%
Hiscox Limited (DI) (HSX) 764.20p -0.96%
National Express Group (NEX) 300.20p -0.86%
Crest Nicholson Holdings (CRST) 434.60p -0.64%
ITV (ITV) 127.85p -0.62%
Wood Group (John) (WG.) 248.30p -0.52%