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London open: Stocks touch lower as BoJ disappoints; Barclays gains after results
London stocks opened a touch lower on Friday, with investors disappointed by the Bank of Japan’s latest policy measures.
At 0815 BST, the FTSE 100 was down 0.3% to 6,700.88. Meanwhile, oil prices retreated, with West Texas Intermediate down 0.7% at $40.84 a barrel and Brent crude down 0.7% at $42.42.
The BoJ kept interest rates steady on Friday but said it would increase its purchases of exchange-traded funds to an annual pace of Y6trn from Y3.3trn. It also doubled the size of a lending programme for local companies to $24bn.
Mike van Dulken, head of research at Accendo Markets, said: “A neutral open comes after a mixed Asian session with the Bank of Japan failing to deliver what greedy markets wanted – more stimulus.
“We did ask whether it would do little or even hold off until September, like the ECB, in order to see what the BoE does next week and allow the Japanese government to introduce the fiscal stimulus it has announced. Some say a limited offering suggests the BoJ has run out of options. But just because it didn’t move overnight, doesn’t mean it won’t move later. Patience please.”
On the corporate front, Barclays gained ground. Although it posted a drop in first-half profit, the results were better than expected.
Consumer goods group Reckitt Benckiser was in the red after it posted a drop in first-half pre-tax profit but a rise in revenue, as it reaffirmed its full-year net revenue target at the lower end of its guidance range.
Pearson was also on the back foot after the education company’s first-half sales and revenue missed consensus estimates.
British Airways and Iberia parent International Consolidated Airlines flew lower after cutting its 2016 profit outlook.
Elsewhere, estate agent Foxtons was under pressure as its first-half profit declined 42% and the company said it had been hit by the UK’s decision to leave the European Union.
Still to come on the macroeconomic calendar, UK money supply and mortgage approvals are due at 0930 BST. In the US, the first release of second-quarter GDP is at 1330 BST, Chicago PMI is at 1445 BST and University of Michigan consumer sentiment is at 1500 BST.
