London open: Stocks nudge up as pound hit by latest election poll

London stocks nudged higher in early trade on Wednesday as the latest election poll suggested a hung parliament, denting the pound.

At 0830 BST, the FTSE 100 was up 0.2% to 7,540.13, while the pound was down 0.3% versus the dollar at 1.2817 after a YouGov poll published in The Times suggested Theresa May could fail to win an outright majority in the election on 8 June. According to the poll, the Conservatives could lose as many as 20 of the 330 seats they held in the last parliament, while Labour could gain nearly 30.

This followed on from an ICM poll earlier on Tuesday that gave the Tories a 12-point lead over Labour, down two points in the last week but better than the six-point lead suggested by the recent YouGov poll.

Neil Wilson, senior market analyst at ETX Capital, said: "Of course it's just one poll and all the rest give the Tories a healthy lead. But this is arguably much more accurate for our first past the post system and therefore commands attention.

"Corbyn, with his nationalisation plans and anti-business agenda, could send shivers down the spines of FTSE shareholders if he were to enter number 10. The blue chip index would take a beating if investors ditched shares in sectors that might be nationalised. In FX markets, the pound is displaying nerves over the uncertainty but ultimately a Corbyn-led centre-left coalition could yield a softer Brexit (preserving single market access, free movement of labour) and this could be positive for sterling."

Investors were also digesting the latest data out of China, where the official non-manufacturing purchasing managers' index rose to 54.5 in May from 54.0 the month before and the official manufacturing PMI was unchanged in May at 51.2, in line with expectations.

Elsewhere, the latest survey from GfK showed UK consumer confidence surprisingly improved marginally in May, rising to -5 from -7 the month before. The market had expected it to worsen to -8 as inflation and low wage growth increase the pressure on households.

This did not help sentiment for supermarket shares, which were down even though Morrisons, Tesco and Sainsbury's et el enjoyed their strongest period of trading in over three and a half years, as the 'big four', including Asda, lost market share to fast-growing discounters Aldi and Lidl. In the 12 weeks ending 21 May 2017, Kantar Worldpanel data showed grocery inflation of 2.9% to help boost overall sector sales by 3.8% year on year.

In corporate news, IG Group was in the black as it said revenue and profits for its fiscal year would be ahead of the previous year. It now expects to report full year revenue around 7% higher than in 2016, though after a fall in the third quarter this is down from the 14% increase in net trading revenue seen in the first half of the year.

LondonMetric was also trading higher as it announced the acquisition of three urban logistics warehouses and said net rental income in the year to 31 March rose 5% to £82m.

On the downside, NEX Group fell as it announced that Stuart Bridges has stepped down as chief financial officer and will be leaving the company later in the year. He will be succeeded by Samantha Wren, the current chief commercial officer for NEX Markets, who will join the board with immediate effect.

Payments processor Worldpay was hit by a downgrade to 'equalweight' at Barclays.

On the data front, investors will eye the release of net lending, consumer credit, and mortgage approvals at 0930 BST.

Market Movers

FTSE 100 (UKX) 7,540.13 0.18%
FTSE 250 (MCX) 20,022.09 0.15%
techMARK (TASX) 3,630.63 0.26%

FTSE 100 - Risers

easyJet (EZJ) 1,417.00p 1.21%
Taylor Wimpey (TW.) 203.20p 0.94%
Hikma Pharmaceuticals (HIK) 1,690.00p 0.90%
Old Mutual (OML) 193.00p 0.89%
Associated British Foods (ABF) 3,010.00p 0.87%
Whitbread (WTB) 4,265.00p 0.85%
Barratt Developments (BDEV) 606.50p 0.83%
Mediclinic International (MDC) 796.00p 0.82%
British American Tobacco (BATS) 5,546.00p 0.82%
Diageo (DGE) 2,342.00p 0.82%

FTSE 100 - Fallers

Worldpay Group (WPG) 307.10p -2.66%
Anglo American (AAL) 1,034.00p -2.08%
Rio Tinto (RIO) 3,121.00p -1.95%
BHP Billiton (BLT) 1,183.50p -1.58%
Glencore (GLEN) 287.85p -1.42%
Antofagasta (ANTO) 800.50p -1.11%
Severn Trent (SVT) 2,515.00p -0.75%
Tesco (TSCO) 184.00p -0.73%
Fresnillo (FRES) 1,577.00p -0.50%
Morrison (Wm) Supermarkets (MRW) 246.50p -0.44%

FTSE 250 - Risers

Clarkson (CKN) 2,712.00p 2.57%
IG Group Holdings (IGG) 566.00p 2.26%
McCarthy & Stone (MCS) 185.50p 1.76%
Marston's (MARS) 135.80p 1.65%
Syncona Limited NPV (SYNC) 161.50p 1.51%
Just Eat (JE.) 661.00p 1.38%
Riverstone Energy Limited (RSE) 1,276.00p 1.27%
Paysafe Group (PAYS) 502.00p 1.21%
Pets at Home Group (PETS) 163.00p 1.18%
Spirax-Sarco Engineering (SPX) 5,720.00p 1.06%

FTSE 250 - Fallers

Ferrexpo (FXPO) 177.00p -3.07%
Vedanta Resources (VED) 632.50p -2.47%
Indivior (INDV) 314.90p -2.05%
Kaz Minerals (KAZ) 495.40p -1.80%
John Laing Group (JLG) 292.10p -1.68%
Hochschild Mining (HOC) 282.20p -1.67%
Ladbrokes Coral Group (LCL) 121.00p -1.31%
Wood Group (John) (WG.) 731.50p -1.15%
Amec Foster Wheeler (AMFW) 519.50p -1.05%
William Hill (WMH) 289.00p -1.03%