London open: FTSE fall continues as weight of data unlikely to lift

After Monday's session was knocked lower by poor manufacturing sector data, the FTSE 100 was down another 25 points the following morning, or 0.38% at 6,668.47 after half an hour of trading, while the FTSE 250 was 0.47% lower at 17,059.51.

The 25 basis point rate cut from the Reserve Bank of Australia took the cash rate to an all-time low of 1.5%, was all-but priced in it would appear and came as little surprise to investors, said analyst Craig Erlam at Oanda.

"The RBA isn’t expected to be the only active central bank this week. The Bank of England meets Thursday and it is widely expected to ease monetary policy in an attempt to combat the Brexit impact early," he said.

"The construction PMI data for July is likely to offer further evidence of the BoEs need to act soon, with the number seen falling even deeper into contraction territory – expected at 43.8 – as the first casualty of the Brexit vote shows signs of falling even further into decline."

CMC Markets’ Michael Hewson noted that the recent slide in oil prices since the peaks in June appeared to have gone almost unnoticed throughout most of July, though investors seemed to be paying more attention as the selloff gained pace in the last week, with Brent prices down over 15% from their peaks, on the realisation that markets have overestimated the speed that the supply glut would be worked off.

“US prices have lost 9% in the last week alone, as rig counts have continued to rise and gasoline inventories have refused to drift lower.”

On the data front, UK construction PMI numbers are due at 0930 BST, with Hewson saying the data are unlikely to be any better than Monday’s manufacturing figures.

In the US, as the Federal Reserve also ponders its rate adjustment, personal income and spending and the PCE deflator are at 1330 BST.

In corporate news, Direct Line Group was top of the early leaderboard as the insurance company delivered a chunky special interim dividend alongside its half year report for the six months to 30 June, where gross written premiums for ongoing operations were 3.9% higher, driven by strong growth in motor in-force policies - up 2.5% - and a 9.5% increase in premium rates.

While operating profit from ongoing operations decreased £12.2m to £323.6m, which Direct Line attributed to £18.5m lower investment gains, the board declared an interim dividend per share of 4.9p, up from 4.6p, and a special interim dividend of 10.0p per share.

InterContinental Hotels shares maintained their rebound of recent months as although earnings were hit by the strong US dollar in the first half of the year, the Holiday Inn operator swerved the conditions that have led to recently lowered guidance from rivals Hilton and Marriott and said it remains confident in the outlook for the rest of the year.

Reported revenues of $838m for the six months to 30 June were down 8% on the previous year's and short of analyst expectations, though underlying sales, which excludes the effect of disposals and exchange rates, rose 5% to $771m.

First-half silver and gold production rises of 6% and 23% respectively helped to boost Fresnillo's earnings to $474m from $317.9. The company said it was well-placed to meet 2016 silver production guidance of 49m – 51m ounces, and recently increased 2016 gold production guidance of 850,000 – 870,000 ounces.

Travis Perkins was a leading faller as it said like-for-like sales in July had been below normal levels in the wake of the UK's decision to leave the European Union as it posted a 10.7% rise in interim profits to £176m.

Market Movers

FTSE 100 (UKX) 6,673.48 -0.31%
FTSE 250 (MCX) 17,070.22 -0.40%
techMARK (TASX) 3,460.38 -0.26%

FTSE 100 - Risers

Direct Line Insurance Group (DLG) 371.00p 4.48%
Fresnillo (FRES) 1,957.00p 1.77%
Randgold Resources Ltd. (RRS) 8,995.00p 0.95%
InterContinental Hotels Group (IHG) 3,041.00p 0.90%
Worldpay Group (WI) (WPG) 296.60p 0.82%
Rolls-Royce Holdings (RR.) 797.50p 0.76%
GlaxoSmithKline (GSK) 1,708.50p 0.47%
DCC (DCC) 6,805.00p 0.44%
BAE Systems (BA.) 533.00p 0.38%
Admiral Group (ADM) 2,157.00p 0.37%

FTSE 100 - Fallers

Travis Perkins (TPK) 1,502.00p -2.72%
Royal Bank of Scotland Group (RBS) 185.30p -2.01%
Coca-Cola HBC AG (CDI) (CCH) 1,542.00p -1.53%
BHP Billiton (BLT) 949.50p -1.43%
Lloyds Banking Group (LLOY) 52.52p -1.37%
Intertek Group (ITRK) 3,497.00p -1.35%
Kingfisher (KGF) 332.90p -1.33%
Barclays (BARC) 149.45p -1.29%
Johnson Matthey (JMAT) 3,231.00p -1.28%
British Land Company (BLND) 663.50p -1.19%

FTSE 250 - Risers

BBA Aviation (BBA) 248.90p 5.91%
Pendragon (PDG) 32.85p 5.69%
Electrocomponents (ECM) 297.50p 2.59%
Greggs (GRG) 1,076.00p 2.28%
Kaz Minerals (KAZ) 166.70p 1.96%
Sophos Group (SOPH) 232.20p 1.53%
Aldermore Group (ALD) 141.20p 1.29%
IP Group (IPO) 151.70p 1.13%
Rentokil Initial (RTO) 217.80p 0.93%
Centamin (DI) (CEY) 164.60p 0.92%

FTSE 250 - Fallers

Rotork (ROR) 198.50p -7.07%
Elementis (ELM) 208.70p -4.92%
Meggitt (MGGT) 416.00p -4.06%
International Personal Finance (IPF) 251.80p -3.78%
Domino's Pizza Group (DOM) 380.30p -3.28%
Zoopla Property Group (WI) (ZPLA) 286.30p -2.95%
Countryside Properties (CSP) 222.00p -2.67%
AO World (AO.) 138.90p -2.39%
Grafton Group Units (GFTU) 540.50p -2.26%
Amec Foster Wheeler (AMFW) 427.20p -2.24%