London pre-open: Slightly lower start expected

Alexander Bueso Sharecast | 17 Aug, 2017 07:55 - Updated: 07:55 | | |

Kingfisher B&Q store, retail

Stocks are expected to come under slight pressure at the start of the day despite the release of a relatively dovish set of Fed meeting minutes overnight and a positive close to the trading session on Wall Street.

The Footsie was being called to begin the day 17 points below Wednesday's closing mark of 7,433.03.

According to the minutes of the US central bank's July policy meeting, "Many participants [...] saw some likelihood that inflation might remain below 2 percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside."

Commenting on the content of the minutes, Michael Hewson, chef market analyst at CMC Markets UK, said: "It seems clear from last nights Fed minutes that while there are divisions on the timing of when to pull the trigger on the next rate rise, there does appear to be some sort of consensus forming on starting to reduce the size of the US central banks $4.5trn balance sheet, which could come about with an announcement at the September meeting."

The main release on the economic calendar for Thursday was the July retail sales report at 0930 BST.

There was also keen interest in the minutes of the European Central Bank's last policy meeting, with their contents due to be published at 1330 BST.

Stateside, investors were waiting on a flurry of economic data, including the Philly Fed regional manufacturing index for August at 1330 BST and industrial production figures for July at 1415 BST.

DIY specialist cautious on outlook in UK (and France)

Sales at retailer Kingfisher were hammer onto a big toe in the second quarter and the B&Q and Screwfix owner remained cautious on the outlook for the UK and France in the second half. In the three months to 31 July, group like-for-like sales shrank 1.9%, deteriorating from the 0.6% decline in the first quarter, though management said they "remain comfortable" with the market forecast of underlying earnings per share of 26p for the full year.

Hikma Pharmaceuticals reported a 1% rise in first-half sales but a 6% fall in earnings per share, and trimmed its guidance for the full year as the generic drugs arm faces tougher market conditions. Group revenue of $895m in the first six months of the year, up 1% year on year and up 5% in constant currencies, and for the full year management now see it rising to "around $2bn", down from previous guidance of $2-2.1bn issued in May.

Kaz Minerals saw revenues more than double over the six months ending on 30 June to reach $837m, versus $363m in the year-ago period, thanks to higher volumes and commodity prices. Together with net cash costs of $0.64 per pound of copper, that drove a greater than four-fold jump in operating profits to $291m.
Net debt was also lower, falling to $2.44bn, with the company having benefited from lower levels of capital outlays and the refund of $176m in project VAT. Management narrowed its full-year copper production target to between 235 and 260kt.

More news

20 Sep US close: Dow, S & P 500 close at session highs as Fed starts QE taper

The Dow Industrials and S & P 500 ended slightly higher even as the US Federal Reserve announced the historic end to its balance sheet expansion, although the Nasdaq was held back by losses in shares of Apple.

20 Sep Results round-up

Kingfisher posted better profits than were expected for the first half of the year but the do-it-yourself retailer remained cautious on the second half backdrop in the UK and France.

20 Sep Broker tips: Nostrum Oil & Gas, Stagecoach, BAE Systems

RBC Capital Markets upgraded Nostrum Oil & Gas to 'outperform' from 'sector perform' saying recent weakness is an opportunity and its discount to peers it set to unwind as it delivers operational milestones.

20 Sep Fortum and E.ON in 'advanced talks' for sale of Uniper stake

Finnish firm Fortum announced on Wednesday that it was in advanced talks with E.ON over the potential €3.76bn purchase of German energy company Uniper.

20 Sep Federal Reserve to start taper in October, nudges rate forecast lower

America's central bank has stuck to script - or almost - announcing it will begin to taper the size of its balance sheet next month while keeping the target for its main policy interest rate unchanged at between 1.0% and 1.25%.

20 Sep Europe close: Spanish stocks underperform

European stocks ended the session little changed amid moderate selling pressure on Spanish stocks on the back of the latest news around the attempted independence referendum in Catalonia and ahead of the US Federal Reserve's policy decision later in the session.

20 Sep Apple discovers issues in new smartwatch 48 hours before shipping

Tech juggernaut Apple announced on Wednesday that its new Series 3 smartwatches had been experiencing significant connectivity issues just days before they were due to be shipped.

20 Sep London close: Strength in Sterling puts a lid on stocks

London stocks traded fairly flat on Wednesday as the pound popped higher on the back of stronger than expected retail sales data, even as traders waited on the US Federal Reserve's policy announcement later in the day.

20 Sep Thursday preview: Capita guidance and UK public sector debt under spotlight

Thursday in Europe will initially see any fallout from the US policy adjustments overnight, while in the UK Capita and Mitchells & Butlers investors have results to pore over, with an update on the public deficit later in the morning.

20 Sep Bed Bath and Beyond fails to meet expectations again

Bed Bath and Beyond (BBBY) shares suffered after the New Jersey-based home goods retailer fell short of market expectations yet again.