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London open: Stocks edge higher ahead of data releases
London stocks edged cautiously higher in early trade as investors awaited a slew of key data releases.
At 0830 BST, the FTSE 100 was up 0.2% to 6,822.42. Meanwhile, oil prices were in the red, with West Texas Intermediate down 1% at $42.58 a barrel and Brent crude 1.1% lower at $44.88.
Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said: “With US markets pushing up to all-time highs and other markets reaching levels not seen since last August, investors are starting to wonder how long equity markets can continue to defy gravity? For so long buoyed by weak economic data, which supported the need for continued central bank stimulus, global markets have pushed higher over the past week on the idea that the US economy may soon be strong enough for the Fed to begin hiking rates once more. The positive reaction to both perceived good news and bad news is a real conundrum for markets, making it very difficult to rationalise current market levels with any degree of certainty.
“For UK investors, the rally in global markets is being magnified by the effects of an ever weaker currency, with sterling dropping below $1.30 this morning, its weakest since early-July, as the market awaits important data today on UK manufacturing and trade. The disparity between a strengthening US economy and expectations of weaker post-Brexit UK activity looks set to continue to put pressure on the pound over the coming weeks.”
UK industrial production, manufacturing production and trade balance figures are all due at 0930 BST.
In corporate news, Standard Life gained ground after saying operating profit before tax rose 18% in the first half thanks to diversification, as its assets under management grew.
Payments processor Worldpay rallied after it reported a rise in first-half underlying earnings and pre-tax profit amid strength in all its businesses and declared a maiden interim dividend of 0.65p per share, while Spirax-Sarco advanced after posting a jump in interim pre-tax profit.
Morrisons pushed higher after the supermarket agreed a new deal with Ocado, ending their profit-sharing agreement but with the grocer taking roughly 30% capacity of the online specialist’s new Customer Fulfilment Centre (“CFC”) in Erith and increasing its Morrisons.com non-food range.
On the downside, Legal & General was under pressure despite posting an increase in first-half headline adjusted operating profit.
Pharmaceutical giant AstraZeneca nudged lower after it announced results from the Phase III SELECT-1 trial of the MEK 1/2 inhibitor, selumetinib on Tuesday, in combination with docetaxel chemotherapy, as second-line treatment in patients with KRAS mutation-positive locally-advanced or metastatic non-small cell lung cancer. The FTSE 100 firm said the results showed that the trial did not meet its primary endpoint of progression-free survival, and selumetinib did not have a significant effect on overall survival.
