London open: Stocks wobble at start of result season, IMF downgrades
Shares continued to fall on Monday, continuing the slide than began at the end of last week ahead of a huge week for company news and as the IMF downgraded growth forecasts for the UK and US.
By 0817 BST, the FTSE 100 was down more than 28 points, or 0.38%, to 7,424.73.
The pound was up very slightly on the dollar at 1.3008 and a bit more on the euro at 0.8963.
Having gained just over 1% last week as a whole but lost momentum on Friday with a 0.5% decline, the Footsie broke lower ahead of a week when 45.6% of the index's companies by weighting are due to report results.
Overnight the IMF cut its forecast for UK gross domestic product growth to 1.7% from a previous estimate of 2%. Meanwhile, the US forecast for growth this year was cut to 2.1% from 2.3% following a weak first quarter and with fiscal policy now likely to be less expansionary than thought amid President Donald Trump's struggles to deliver on policy and stimulus.
Analyst Michael van Dulken at Accendo Markets said the FTSE, having broken through support at 7,430 could head all the way to 7,360 "at the very least", based on technical levels.
"In focus today will be OPEC and non-OPEC producers meeting in St Petersburg as they plot their next move to address falling oil prices on account of the global supply glut," he said.
"While extending production cuts last time around has seemingly failed to incite fresh bullishness, investors hope the parties will look at deepening current production cuts. Friday’s report showing members openly flouting compliance, however, may take centre stage."
There is no significant UK data due today, with European manufacturing surveys due through the morning and the headline Eurozone reading due at 0900 BST, while US manufacturing and services PMI are scheduled for 14:45 BS, with both expected to tick higher, while existing home sales at 1500 BST expected to ease off slightly.
In company news, Reckitt Benckiser was down 2.4% as it reported results amid "tough" market conditions and slightly weaker profit margins from newly acquired baby food business Mead Johnson Nutrition. For the first six months of the year, Reckitt generated £5.02bn revenues, an increase of 14% or 2% at constant exchange rates, as the consumer goods company had flagged earlier this month when it warned of the effects of a cyber attack.
EasyJet and British Airways owner IAG led the fallers as budget airline rival Ryanair warned on summer fares dragging, even though the Irish carrier announced a huge jump in quarterly profits.
Provident Financial fell yet lower ahead of its publish interim results later this week that will be the sub-prime lender’s first since last month’s profit warning.
Randgold Resources was slightly in the red as it continued to ramp up production at its Tongon gold mine in Côte d'Ivoire, tracking towards its 2017 target of 285,000 ounces, the company reported on Monday morning.
Real estate investment trust Tritax Big Box was also just below par as the warehouse investor said it had bought the freehold of the former Littlebrook Power Station site at Dartford, London for £65m funded by equity.
B&M European Value Retail was up 5% on rumours in the papers that Walmart-owned Asda is eyeing up the discounter.
Meat products producer Cranswick was trotting higher as it churned out impressive revenue growth in the first quarter of the year and stated its confidence of hitting full year targets.
Market Movers
FTSE 100 (UKX) 7,424.92 -0.38%
FTSE 250 (MCX) 19,709.61 -0.21%
techMARK (TASX) 3,522.99 -0.19%
FTSE 100 - Risers
BAE Systems (BA.) 612.50p 0.99%
Shire Plc (SHP) 4,190.00p 0.81%
Mediclinic International (MDC) 736.50p 0.61%
Rolls-Royce Holdings (RR.) 927.00p 0.54%
British American Tobacco (BATS) 5,510.00p 0.46%
Experian (EXPN) 1,522.00p 0.33%
Scottish Mortgage Inv Trust (SMT) 409.20p 0.29%
Glencore (GLEN) 314.40p 0.27%
SEGRO (SGRO) 511.50p 0.20%
Wolseley (WOS) 4,507.00p 0.16%
FTSE 100 - Fallers
easyJet (EZJ) 1,269.00p -3.28%
International Consolidated Airlines Group SA (CDI) (IAG) 575.50p -2.46%
Provident Financial (PFG) 2,315.00p -2.16%
Reckitt Benckiser Group (RB.) 7,722.00p -2.02%
Next (NXT) 3,760.00p -1.75%
St James's Place (STJ) 1,199.00p -1.64%
GKN (GKN) 321.90p -1.29%
BP (BP.) 441.10p -1.17%
AstraZeneca (AZN) 5,101.00p -0.99%
Paddy Power Betfair (PPB) 7,475.00p -0.86%
FTSE 250 - Risers
B&M European Value Retail S.A. (DI) (BME) 356.70p 4.63%
Drax Group (DRX) 325.00p 2.95%
Cranswick (CWK) 2,904.00p 2.15%
Ascential (ASCL) 343.00p 1.96%
Cobham (COB) 135.60p 1.95%
UBM (UBM) 703.50p 1.74%
Sports Direct International (SPD) 358.90p 1.64%
CLS Holdings (CLI) 212.90p 1.38%
Ferrexpo (FXPO) 218.30p 1.06%
Big Yellow Group (BYG) 810.00p 1.00%
FTSE 250 - Fallers
Acacia Mining (ACA) 217.50p -6.41%
Petra Diamonds Ltd.(DI) (PDL) 104.30p -5.01%
Carillion (CLLN) 57.70p -3.75%
Clarkson (CKN) 2,615.00p -2.39%
PayPoint (PAY) 861.50p -2.32%
FDM Group (Holdings) (FDM) 772.00p -2.03%
Wizz Air Holdings (WIZZ) 2,515.00p -1.87%
Sirius Minerals (SXX) 30.56p -1.77%
Euromoney Institutional Investor (ERM) 1,070.00p -1.74%
Coats Group (COA) 76.00p -1.62%