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London open: Stocks nudge down as investors eye Fed; StanChart rallies on results
London stocks nudged lower in early trade on Wednesday as investors mulled the prospect of a general election before Christmas and looked ahead to a policy announcement by the Federal Reserve.
At 0840 GMT, the FTSE 100 was down 0.1% at 7,301.05, while the pound was up 0.1% against the dollar at 1.2874 and flat versus the euro at 1.1581.
Spreadex analyst Connor Campbell said: “Undaunted – apparently – by the prospect of a general election on December 12th, the pound popped higher after the bell.
“It took him four attempts, but Boris Johnson now has his pre-Christmas ballot – the first general election to take place in the final month of the year since 1923. The fact sterling hasn’t freaked out suggests the currency is hoping for increased political clarity heading into 2020, a result that would give one party a workable majority and allow the Commons to avoid the repeated Brexit deadlock that has become the norm post-referendum. Yet if the last few UK votes are anything to go by, that hope might be a bit naïve…”
Away from Brexit, the focus will shift across the pond, with Fed fund futures pricing in a 95% chance of a 25 basis points rate cut.
“Investors will want to hear what the central bank has planned for December, and, looking further ahead, 2020 as a whole,” said Campbell.
In equity markets, Next was the worst performer after the retailer posted a rise in third-quarter full price sales and backed its guidance for 2020 but sounded a cautious note over its immediate outlook.
On the upside, Standard Chartered was sitting pretty at the top of the FTSE 100 after the bank reported a 16% jump in third-quarter pre-tax profit despite a challenging environment. In the three months to 30 September, underlying pre-tax profit rose to $1.2bn from $1.1bn in the third quarter of last year, while statutory pre-tax profit was up 4% to $1.1bn. Analysts had been expecting underlying pre-tax profit of $1bn.
Smurfit Kappa following close behind after the corrugated packaging company said earnings in the nine months to the end of September rose 11%.
ConvaTec and Computacenter were also in the green after well-received trading updates.
