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London open: Stocks slip at start of trading
Stocks started the session lower on Wednesday following a mixed session in Asia and amid weak oil prices.
Also weighing on shares was renewed Fedspeak overnight, as Dallas Fed governor Robert Kaplan reiterated his stance that another rate hike could be justified if the US labour market were to continue improving.
As of 0820 BST, the FTSE 100 was trading 17 points lower at 6,852 as front month Brent crude futures slid 1.7% to $49.13 per barrel on the ICE.
Weighing on sentiment too, a 6.2-magnitude earthquake hit central Italy early on Wednesday morning.
On the macroeconomic front, data on BBA loans for house purchase is due at 0930 BST. In the US, existing home sales are at 1500 BST.
The Shanghai Stock Exchange´s Composite Index closed 0.12% lower to 3,085.88.
Naeem Aslam at Think Markets said: “Many home buyers are refraining from putting their hard-earned money into the UK’s property sector, and several hedge funds which are purely focused on the UK property market have fuelled those concerns when they made their own headlines by restricting access and outlining new policies.
“The data could show further deterioration and on the back of this, we can see some more pressure building up for builders and estate agents.”
In corporate news, AstraZeneca has agreed to sell its antibiotics business to US giant Pfizer for staged payments amounting to $1.6bn plus recurring, double-digit royalties on future sales.
The FTSE 100 group said the sale would reinforces its focus on developing medicines in its three main therapy areas, while realising value from what it said was a strong portfolio of established and late-stage antibiotics through Pfizer’s commercialisation and development abilities.
Glencore reported a 13% drop in operating profits at the half-year stage in terms of adjusted earnings before interest, taxes and depreciation, while net income was off 66% to $300m. Capital expenditures were more than halved to $1.57bn. Chief Ivan Glassenberg said the company “remained mindful” that underlying markets continue to be volatile.
Nonetheless, Glassenberg was confident the firm could achieve even lower than previously indicated net funding and net debt levels by the end of this year. In parallel, the commodity trader´s finance chief held out the prospect of a return to dividend payments in 2016.
Advertising giant WPP posted a rise in interim revenue but a drop in pre-tax profit as writedowns took their toll.
Profit before tax was down 40.1% to £425m, or 45.5% lower at constant currency, mostly reflecting net exceptional writedowns of £122m. This was principally on the investment in comScore, in comparison to net exceptional gains of £203m the year before.
