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London open: Stocks slip as investors book some profits
Stocks in London were a little weaker in early trade as investors booked some profits following the previous session’s Fed-inspired rally.
At 0820 BST, the FTSE 100 was down 0.3% to 6,890.28.
Meanwhile, oil prices retreated. West Texas Intermediate was down 1% to $45.88 a barrel and Brent crude was 0.7% lower at $47.33.
Dave Jeal, head of investment products at stockbroker Interactive Investor, said: “As the timing for a US interest rate rise starts to become clearer, speculation switches back to the UK’s own direction of travel. Recent economic indicators found favour with the MPC’s Kristin Forbes who believes no new move on the Bank of England’s headline rate is needed. But just how strong are those indicators anyway?
“Currently, inflation is driven more by the sterling exchange rate versus the dollar, than by rising prices. The pound had gained ground over the last couple of days on the back of no immediate rise in the US interest rate, but still trades well below the pre-Brexit result. In the short – term, this vote of confidence in the UK is good for investors: commodities and construction stocks led the FTSE to close above 6,900 yesterday, albeit losing some ground in late trading having peaked at 6,937.”
Jeal added that barring some profit taking, that “rosy outlook” appears set to continue over the coming weeks. “As for the longer term – the jury’s well and truly out.”
In corporate news, Indivior tumbled as 35 US states filed a lawsuit against the drug maker alleging that it tried to keep generic versions of a drug off the market.
Anglo American was a little lower after appointing Fortescue Metals’ Stephen Pearce as finance director following Rene Medori’s decision to retire, as announced back in April.
Vodafone slipped after saying it has signed a new non-equity partner agreement for Cameroon with 4G-LTE telecommunications operator Afrimax Group.
Engineering company Smiths Group was flat after announcing it will sell its artificial life business to Endurance Lift Solutions.
On the upside, Sports Direct rose after the retailer said Dave Forsey has resigned and will be replaced as chief executive by Mike Ashley.
Housebuilder Persimmon was on the front foot after Liberum upgraded the stock to ‘buy’ from ‘hold’.
There are no major UK data due but in the US, Markit’s manufacturing PMI is at 1445 BST.
