London open: FTSE slips towards two-month lows as data eyed

After an hour of trading the FTSE 100 was down 21 points or 0.29% to 7,315.90. The pound was also down 0.1% against the dollar and the euro at 1.2956 and 0.88146 respectively.

Overnight the S&P 500 endured its biggest drop since mid-May and spilled into a red session for much of Asian stock markets.

"This follows another bond market sell-off that again proved contagious for equities, investors digesting hawkish ECB minutes and prepping for further withdrawal of global easy money policy; tapering of ECB QE, unwind of Fed’s balance sheet," said Mike Van Dulken at Accendo Markets. "Maybe even a UK rate hike."

A bearish oil price turnaround has not helped either, he noted, which has dented energy stocks.

"This after much better than expected US oil inventory data was overshadowed by higher US production, almost taunting OPEC and ‘friends’ who continue to struggle to deliver meaningful production cuts to get oil prices higher."

Jim Reid at Deutsche Bank said it was also worth keeping an eye on the US Fed’s July 2017 monetary policy report due to be delivered to Congress.

"This will form the basis for Yellen’s testimony in front of Congress and the Senate next week which is almost always a closely watched event."

Reid said the other potentially significant event for markets is the G-20 leaders gathering in Hamburg. "The gathering kicks off today and continues into the weekend with Merkel, Trump and Putin amongst the leaders attending. So we’ll see if there are any interesting headlines to emerge from that."

MACRO DATA

Overnight, BDO said like-for-like sales on UK high streets grew by 1.3% in June, the best tally for that month of the year in six years.

Later on Friday morning we will see official industrial output data for the UK at 0930 BST and the big US jobs report and unemployment reading at 1330 BST.

UK industrial production made a weaker-than-expected start to the second quarter, rising 0.2% month-on-month in April, which was short of the consensus 0.7% rise as manufacturing production only rose 0.2% after falling the month before that.

The consensus for May's numbers is for manufacturing and industrial to both rise 0.3% m/m.

As for US jobs, analysts expected US non-farm payrolls to show a rise of 177,000 people while the unemployment rate was seen steady at 4.3%.

COMPANY NEWS

Among stocks, Howden Joinery Group shares were down slightly after it chief executive Matthew Ingle announced his retirement after 22 years after founding the company. The good news is that it has poached Screwfix boss Andrew Livingston from larger rival Kingfisher to fill the hole. Kingfisher was down 1.2%.

Homewares retailer Dunelm Group shot up 4% as it revealed total revenue for the fourth quarter rose 17.7% to £240.0m. The FTSE 250 firm said total revenue, excluding Worldstores, rose by 6.7% to £217.4m, with total like-for-like growth - combining LFL stores and home delivery - grew by 3.8%.

Aveva was up 1.7% after the software group said its full year outlook remains in line with management expectations after it made a "solid start" to the financial year.

Defence, security, transport and energy company Ultra Electronics was down 0.4% after announcing a conditional merger agreement to acquire New York-listed electromechanical device maker Sparton for $234.8m (£180.6m).

Market Movers

FTSE 100 (UKX) 7,321.17 -0.22%
FTSE 250 (MCX) 19,331.37 -0.19%
techMARK (TASX) 3,481.95 -0.04%

FTSE 100 - Risers

Centrica (CNA) 210.10p 4.06%
easyJet (EZJ) 1,398.00p 3.79%
Severn Trent (SVT) 2,200.00p 1.57%
United Utilities Group (UU.) 870.50p 1.22%
Unilever (ULVR) 4,165.00p 0.91%
Shire Plc (SHP) 4,291.50p 0.81%
National Grid (NG.) 939.90p 0.80%
SSE (SSE) 1,464.00p 0.76%
International Consolidated Airlines Group SA (CDI) (IAG) 620.00p 0.73%
Rolls-Royce Holdings (RR.) 919.00p 0.38%

FTSE 100 - Fallers

WPP (WPP) 1,574.00p -2.24%
Royal Mail (RMG) 415.10p -2.21%
Johnson Matthey (JMAT) 2,764.00p -1.85%
Old Mutual (OML) 188.70p -1.51%
Fresnillo (FRES) 1,416.00p -1.39%
3i Group (III) 893.00p -1.27%
Kingfisher (KGF) 305.80p -1.26%
ITV (ITV) 179.70p -1.21%
Sainsbury (J) (SBRY) 245.40p -1.13%
Mondi (MNDI) 1,967.00p -1.11%

FTSE 250 - Risers

Computacenter (CCC) 862.00p 2.86%
Dunelm Group (DNLM) 614.00p 2.85%
Entertainment One Limited (ETO) 227.30p 2.80%
ZPG Plc (ZPG) 364.00p 2.48%
Daejan Holdings (DJAN) 6,430.00p 2.06%
Spire Healthcare Group (SPI) 333.80p 2.02%
Sanne Group (SNN) 663.00p 1.92%
Virgin Money Holdings (UK) (VM.) 302.10p 1.61%
Aveva Group (AVV) 2,002.00p 1.37%
OneSavings Bank (OSB) 378.60p 1.34%

FTSE 250 - Fallers

Clarkson (CKN) 2,534.00p -2.28%
Aggreko (AGK) 893.00p -1.65%
Grafton Group Units (GFTU) 685.00p -1.65%
Investec (INVP) 567.00p -1.65%
Ocado Group (OCDO) 280.50p -1.61%
Hochschild Mining (HOC) 257.30p -1.53%
Hunting (HTG) 489.80p -1.53%
Vectura Group (VEC) 111.60p -1.50%
Evraz (EVR) 220.30p -1.43%
Acacia Mining (ACA) 277.10p -1.42%