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London open: Stocks edge lower ahead of Fed policy announcement
London stocks edged lower in early trade on Wednesday as investors eyed the latest policy announcement from the US Federal Reserve.
At 0850 GMT, the FTSE 100 was down 0.3% at 6,783.34.
Spreadex analyst Connor Campbell said: “After some vaccine heat at the start of the week, investors can get back to their other recent preoccupation – bond yields, interest rates and rising inflation.
“The spotlight is going to be put on the issue by this evening’s Federal Reserve meeting, and Thursday’s Bank of England chaser.
“Though the BoE’s Andrew Bailey and Andy Haldane have expressed concern over rising inflation – the latter talking of ‘taming’ the inflationary tiger – the Fed’s Jerome Powell has been slightly more sanguine. Much to the displeasure of investors. Continued reluctance to view the movement in yields with the same concern as equities investors could create a problem for the markets heading into the end of the week.
“Wednesday night will also see a round of new economic projections – the first since the success of Joe Biden’s American Rescue Plan. And if, as expected, the US economy is facing a stronger recovery than first thought, questions will turn to the timing of the Fed’s next interest rate rise, which is currently forecast in 2024 at the earliest.”
In equity markets, BT and Vodafone were among the top performers after the UK government auctioned a new tranche of 5G mobile network spectrum for £1.36bn. EE, owned by BT, paid a total of £452m after it won 2×10 MHz of paired frequency spectrum in 700 MHz band for £280m, 20 MHz of supplementary downlink spectrum in 700 MHz band for £4m and 40 MHz in 3.6-3.8 GHz band for £168m.
Meanwhile, Vodafone secured 40 MHz in 3.6-3.8 GHz for £176.4m in the auction run by regulator Ofcom.
Engine maker Rolls-Royce was a high riser after an upgrade to ‘neutral’ from ‘underweight’ by JPMorgan Cazenove.
Investment platform Hargreaves Lansdown rallied as it predicted pre-tax profit for the year to the end of June would be “modestly above” the top of analyst expectations after strong dealing volumes continued from the end of January.
Outsourcer Capita gained after announcing it was simplifying its business into three divisions from six, as it posted a decline in full-year pre-tax profit after taking a hit from the pandemic.
On the downside, shopping centre owner Hammerson slumped, having risen sharply a day earlier after saying it was looking to convert a former flagship Debenhams in Leicester into housing.
Upper Crust owner SSP fell after saying it was looking to raise £475m via a rights issue as it anticipated slower recovery from the impact of the pandemic on the travel industry.
TI Fluid Systems was knocked lower by a downgrade at Deutsche Bank, while Trainline was weaker after a downgrade at Panmure.
Top 10 FTSE 100 Risers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | +5.03% | +7.20 | 150.40 |
| 2 |  |
Rolls-royce Holdings Plc | +3.34% | +4.10 | 126.95 |
| 3 |  |
Relx Plc | +2.56% | +44.50 | 1,785.50 |
| 4 |  |
Standard Chartered Plc | +1.75% | +8.60 | 499.90 |
| 5 |  |
Easyjet Plc | +1.41% | +14.50 | 1,046.50 |
| 6 |  |
Hsbc Holdings Plc | +1.30% | +5.50 | 428.30 |
| 7 |  |
Informa Plc | +1.12% | +6.40 | 577.80 |
| 8 |  |
Vodafone Group Plc | +0.97% | +1.30 | 135.82 |
| 9 |  |
Intertek Group Plc | +0.84% | +46.00 | 5,516.00 |
| 10 |  |
Hargreaves Lansdown Plc | +0.77% | +12.00 | 1,561.50 |
Top 10 FTSE 100 Fallers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Micro Focus International Plc | -2.69% | -13.10 | 473.70 |
| 2 |  |
Evraz Plc | -2.67% | -15.00 | 546.80 |
| 3 |  |
Anglo American Plc | -2.49% | -75.00 | 2,933.00 |
| 4 |  |
Johnson Matthey Plc | -2.28% | -71.00 | 3,049.00 |
| 5 |  |
Fresnillo Plc | -1.90% | -18.40 | 948.40 |
| 6 |  |
Compass Group Plc | -1.75% | -28.00 | 1,567.50 |
| 7 |  |
Legal & General Group Plc | -1.75% | -5.10 | 286.20 |
| 8 |  |
St. James’s Place Plc | -1.61% | -20.50 | 1,255.50 |
| 9 |  |
Ocado Group Plc | -1.55% | -34.00 | 2,155.00 |
| 10 |  |
Land Securities Group Plc | -1.54% | -10.90 | 694.90 |
Wednesday newspaper round-up: Ocado, Uber, Hipgnosis
Britons are planning to use a hefty chunk of the savings built up over the past year to go on a £50bn spending spree once restrictions are lifted, a report has said. Research by the Isa provider Scottish Friendly and the consultancy, the Centre for Economics and Business Research (CEBR), found that households intend to take more holidays at home and abroad, travel, and go out to eat in cafes and restaurants. – Guardian
Ocado has given its eponymous food range a facelift, with 100 new products and less packaging, as part of a major rebrand that is ditching its trademark green for purple to stand out in an intensifying online grocery war. The retailer said a fifth of the 530 products in Ocado’s own-label range had changed ahead of Wednesday’s launch, highlighting new upmarket additions such as Chimichurri British flat-iron steak. – Guardian
Taxi app Uber has agreed to give its 70,000 British drivers holiday pay and pensions following a landmark ruling by the UK’s top court which threatened to prompt a deluge of cases against the US company. Uber said from tomorrow, all of its UK drivers would receive holiday pay on a fortnightly basis and would automatically be enrolled onto a pension plan, where the company would be contributing alongside drivers. – Telegraph
Music IP owner Hipgnosis has bowed to mounting pressure over transparency disclosures, and pledged to provide more information on how its song catalogue is performing following a flurry of swoops on hits by the FTSE 250 firm. Hipgnosis, which raises money from investors to buy the intellectual property rights to songs, currently owns rights to the back-catalogues of artists including Neil Young, Take That and Blondie. – Telegraph
The first big UK property fund to be gated more than a year ago because of wobbles in the commercial real estate market may stay shuttered for another three months. M&G Property Portfolio, a £2.06 billion fund with thousands of small investors, said it hoped to reopen before the end of June. It reported that it had sold another £97.7 million of assets since its last update, taking its current cash level to 25.3 per cent of the fund. A total of £329 million of asset sales were under offer or had exchanged. – The Times
