London open: Stocks nudge down ahead of inflation readings

At 0820 BST, the FTSE 100 was down 0.1% at 7,463.93.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Any signs of more stubborn inflation are still very much guiding market sentiment, so key data from the US and the eurozone will be pored over today.

"In the States the Fed’s preferred measure - the US personal consumption data - is out later and the preliminary eurozone CPI data will also be closely watched given that a snapshot out yesterday showed inflation in Germany and Spain not cooling as fast as hoped.

"Inflationary pressures are still staying stubborn even though the downturn is intensifying especially in Germany. That’s posing a big headache for the European Central Bank and if the eurozone wide inflation reading comes in hotter than expected, it is set to increase the chances of a rate hike in September, despite the risks of recession."

Investors were also mulling the latest data released by China’s National Bureau of Statistics, which showed that factory activity contracted in August for the fifth month in a row.

The official manufacturing purchasing managers' index rose to 49.7 from 49.3 in July, remaining below the 50.0 mark that separates contraction from expansion. Economists were expecting a reading of 49.2.

Meanwhile, the non-manufacturing PMI declined to 51.0 in August from 51.5 in July, versus consensus expectations of 51.2.

Sheana Yue, China economist at Capital Economics, said: "The PMI surveys suggest a slight improvement in economic activity in August. Downward pressure on manufacturing appears to have eased, while construction activity accelerated. These have more than offset a further softening in services activity.

"But overall economic momentum remains weak and more policy support is needed to avoid a renewed slowdown later this year."

In equity markets, Glencore, Croda, Endeavour Mining, Genuit and Redde Northgate all fell as they traded without entitlement to the dividend.

Building materials supplier Grafton lost ground as it reported a 29% fall in half-year profits amid a challenging market, but still lifted its dividend and announced a new £50m share buyback. Pre-tax profits came in at £93.6m for the six months to June 30, compared with £132m a year earlier. The dividend was lifted 8.1% to 10p a share.

Grafton said it expected full year adjusted operating profit of around £202.6m and a range of £194.6m - £209.4m, in line with its own compiled forecasts of analysts.

Belfast-based IT services group Kainos edged up as it announced that full-year results are still expected to meet consensus forecasts despite an "uncertain" trading environment.

In a brief trading update for the first half ending 30 September, the company said customers have maintained their investments in digital projects and trading during the period was "good".

Market Movers

FTSE 100 (UKX) 7,463.93 -0.13%
FTSE 250 (MCX) 18,575.25 0.06%
techMARK (TASX) 4,289.91 -0.09%

FTSE 100 - Risers

Smurfit Kappa Group (CDI) (SKG) 3,348.00p 0.97%
Rio Tinto (RIO) 4,896.00p 0.91%
Convatec Group (CTEC) 234.40p 0.86%
Persimmon (PSN) 1,071.00p 0.80%
Phoenix Group Holdings (PHNX) 518.00p 0.78%
Weir Group (WEIR) 1,839.00p 0.77%
Mondi (MNDI) 1,326.50p 0.72%
Halma (HLMA) 2,144.00p 0.70%
Smith (DS) (SMDS) 314.10p 0.67%
BT Group (BT.A) 114.90p 0.66%

FTSE 100 - Fallers

Glencore (GLEN) 415.70p -5.23%
Endeavour Mining (EDV) 1,619.00p -2.12%
Reckitt Benckiser Group (RKT) 5,700.00p -1.21%
Schroders (SDR) 411.80p -1.06%
Diageo (DGE) 3,285.50p -1.05%
Coca-Cola HBC AG (CDI) (CCH) 2,289.00p -0.87%
Johnson Matthey (JMAT) 1,612.00p -0.86%
Hargreaves Lansdown (HL.) 763.80p -0.83%
Croda International (CRDA) 5,528.00p -0.79%
InterContinental Hotels Group (IHG) 5,954.00p -0.67%

FTSE 250 - Risers

Ninety One (N91) 179.70p 4.72%
Bridgepoint Group (Reg S) (BPT) 180.00p 2.45%
Mobico Group (MCG) 84.90p 1.74%
QinetiQ Group (QQ.) 326.00p 1.68%
W.A.G Payment Solutions (WPS) 92.00p 1.32%
Greggs (GRG) 2,480.00p 1.22%
BH Macro Ltd. GBP Shares (BHMG) 352.00p 1.15%
Victrex plc (VCT) 1,508.00p 1.07%
Ferrexpo (FXPO) 77.85p 1.04%
Great Portland Estates (GPE) 420.20p 1.01%

FTSE 250 - Fallers

Ithaca Energy (ITH) 136.10p -7.16%
CMC Markets (CMCX) 108.00p -5.92%
Pagegroup (PAGE) 417.20p -4.18%
Redde Northgate (REDD) 324.00p -4.14%
Genuit Group (GEN) 310.00p -2.36%
Computacenter (CCC) 2,110.00p -2.31%
Future (FUTR) 760.00p -2.19%
Close Brothers Group (CBG) 813.00p -2.05%
Marshalls (MSLH) 270.20p -1.89%
Polar Capital Technology Trust (PCT) 2,180.00p -1.80%