London open: Weaker pound underpins stocks as investors eye services data
London stocks rose in early trade on Wednesday, underpinned by a weaker pound, as investors eyed the latest reading on the UK services sector, particularly after this week's dismal manufacturing and construction figures.
At 0820 BST, the FTSE 100 was up 0.3% at 7,582.51, while the pound was down 0.3% against the dollar at 1.2560 and 0.1% lower versus the euro at 1.1145.
Markit's services PMI for June - due at 0930 BST - is expected to be unchanged at 51.0.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "Services stand for nearly 80% of the UK’s economic activity. A soft figure will likely reinforce the Bank of England doves’ call for a softer monetary policy to boost the waning activity, as the country feels the pinch of the global trade tensions and prepares for a tough divorce from the European Union.
She added that UK stocks remain supported by dovish BoE expectations and a softer pound.
Market participants were also mulling over the latest data out China. The Caixin services PMI slipped to a four-month low in June of 52.0 from 52.7 in May, missing expectations for a reading of 53.0, amid subdued foreign demand. Meanwhile, the composite output index dipped to 50.6 from 51.5 in May.
In equity markets, JD Sports Fashion rallied as it expressed confidence that it will at least meet current consensus market expectations for full-year headline pre-tax profit. In a statement ahead of its annual general meeting, the retailer said it had continued to achieve "encouraging" like-for-like sales growth in its core sports fashion in the UK and internationally.
Student accommodation provider Unite advanced after agreeing to buy Liberty Living from the Canada Pension Plan Investment Board (CPPIB) in a £1.4bn cash and share deal.
Elsewhere, Avast and Sophos got a boost from news that Broadcom Inc. is in advanced talks to buy cybersecurity firm Symantec Corp.
On the downside, Sainsbury's lost ground as the supermarket chain posted a drop in first-quarter sales and warned that retail markets remain "highly competitive".
Serco was in the red after saying it had agreed to pay a £19.2m fine and £3.7m in costs for overcharging on a UK government contract, while Electrocomponents shares dropped even as it reported a 4% increase in first-quarter like-for-like revenue.
Market Movers
FTSE 100 (UKX) 7,582.51 0.31%
FTSE 250 (MCX) 19,690.10 0.16%
techMARK (TASX) 3,720.42 0.34%
FTSE 100 - Risers
JD Sports Fashion (JD.) 617.21p 2.46%
Fresnillo (FRES) 877.33p 1.54%
British American Tobacco (BATS) 2,943.50p 1.48%
Imperial Brands (IMB) 1,962.40p 1.31%
United Utilities Group (UU.) 803.00p 1.24%
SSE (SSE) 1,170.00p 1.12%
Compass Group (CPG) 1,942.25p 1.11%
National Grid (NG.) 871.90p 1.07%
Just Eat (JE.) 620.60p 1.01%
Auto Trader Group (AUTO) 544.40p 1.00%
FTSE 100 - Fallers
Sainsbury (J) (SBRY) 196.06p -1.72%
Micro Focus International (MCRO) 2,124.00p -1.09%
Reckitt Benckiser Group (RB.) 6,307.00p -0.91%
Anglo American (AAL) 2,244.50p -0.91%
TUI AG Reg Shs (DI) (TUI) 767.80p -0.67%
DCC (DCC) 7,102.00p -0.67%
Next (NXT) 5,402.00p -0.52%
Morrison (Wm) Supermarkets (MRW) 204.50p -0.49%
Melrose Industries (MRO) 183.91p -0.48%
Antofagasta (ANTO) 919.27p -0.38%
FTSE 250 - Risers
Funding Circle Holdings (FCH) 121.56p 5.16%
Sophos Group (SOPH) 410.05p 4.82%
Avast (AVST) 315.00p 2.61%
Tate & Lyle (TATE) 771.00p 2.20%
Centamin (DI) (CEY) 114.55p 2.09%
Pennon Group (PNN) 776.60p 2.05%
Unite Group (UTG) 1,017.00p 1.95%
Card Factory (CARD) 178.72p 1.95%
Wood Group (John) (WG.) 470.00p 1.93%
Kainos Group (KNOS) 652.00p 1.87%
FTSE 250 - Fallers
Electrocomponents (ECM) 612.68p -3.58%
Hays (HAS) 157.30p -2.60%
Cairn Energy (CNE) 172.10p -1.66%
Capita (CPI) 107.05p -1.38%
Premier Oil (PMO) 75.00p -1.32%
Petrofac Ltd. (PFC) 423.58p -1.10%
Royal Mail (RMG) 207.60p -1.10%
Spectris (SXS) 2,849.00p -1.08%
Syncona Limited NPV (SYNC) 224.24p -1.00%
Convatec Group (CTEC) 143.75p -1.00%