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London open: Stocks edge higher ahead of Fed minutes

By Michele Maatouk

Date: Wednesday 21 Aug 2019

London open: Stocks edge higher ahead of Fed minutes

(Sharecast News) - London stocks edged higher in early trade on Wednesday as investors eyed the release of the latest minutes from the US Federal Reserve.
At 0830 BST, the FTSE 100 was up 0.4% at 7,151.83, while the pound was down 0.3% against the dollar at 1.2137 and 0.2% weaker versus the euro at 1.0944 as Prime Minister Boris Johnson was set to meet German Chancellor Angela Merkel later in the day to discuss Brexit, among other things.

The minutes from the Fed's July meeting are due out at 1900 BST.

London Capital Group analyst Jasper Lawler said: "A lull in news about the ongoing trade dispute, economic stimulus and recession has investors pausing for breath ahead of today's release of minutes from the July FOMC meeting, Thursday's PMI data and most importantly Federal Reserve Jerome Powell's speech at Jackson Hole, Wyoming on Friday. Investors will be keen to see whether he will stick to his guns on the 'mid cycle adjustment' or whether he will promise the market something more.

"The next move by the market depends greatly on what the Fed will do with interest rates. Given the current climate, the markets are ultra-sensitive to the Fed's outlook meaning that the FOMC minutes could be scrutinised more closely than usual. The market is fully pricing in a 25-basis point rate cut for the September meeting and a 50 point basis rate cut by the end of the year."

Lawler said investors will be looking for acknowledgement that downside risks have increased.

"However, importantly, the FOMC meeting was prior to the most recent escalation in US-Sino trade dispute and prior to the bond market flashing strong recession warning signals. With this is mind, the minutes could be slightly more hawkish relative to current market pricing."

In equity markets, Inchcape rallied after the car dealership said it had appointed Gijsbert de Zoeten, the former chief financial officer of fleet management and mobility services company LeasePlan, as its new CFO.

Credit-checking firm Experian gained as it announced the acquisition of Look Who's Charging (LWC), an Australian provider of transaction enrichment and categorisation technology to banks, for an undisclosed sum.

Capita was boosted by an upgrade to 'buy' from 'neutral' at Goldman Sachs, while Tullow Oil was lifted by an upgrade to 'buy' from 'speculative buy' at Canaccord Genuity.

On the downside, miners retreated amid falling base metals prices, with BHP, Anglo American and Rio Tinto all lower.

AstraZeneca was a little weaker after it said a trial involving its immunotherapy drug Imfinzi showed it was no more effective at treating advanced lung cancer than regular chemotherapy.

Property development and investment company Hammerson was in the red as it appointed former AIG executive James Lenton as its new chief financial officer.

OneSavings Bank was trading lower after it reported a rise in interim profit ahead of its merger with rival Charter Court Financial, as the loan book grew amid high demand from its core market segment, but a drop in the net interest margin.

Charter Court Financial was also on the back foot after its first-half results, which showed a drop in pre-tax profit.

Market Movers

FTSE 100 (UKX) 7,151.83 0.38%
FTSE 250 (MCX) 19,054.12 0.24%
techMARK (TASX) 3,805.12 0.16%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 778.56p 2.36%
Johnson Matthey (JMAT) 2,837.00p 1.58%
CRH (CRH) 2,641.00p 1.38%
Smurfit Kappa Group (SKG) 2,436.00p 1.33%
Marks & Spencer Group (MKS) 187.80p 1.29%
Intertek Group (ITRK) 5,482.00p 1.22%
Rolls-Royce Holdings (RR.) 777.80p 1.14%
Ferguson (FERG) 5,982.00p 1.12%
British American Tobacco (BATS) 3,013.00p 1.11%
Ocado Group (OCDO) 1,227.50p 1.07%

FTSE 100 - Fallers

BHP Group (BHP) 1,710.80p -1.38%
Anglo American (AAL) 1,701.00p -0.90%
Rio Tinto (RIO) 3,982.23p -0.68%
Legal & General Group (LGEN) 222.60p -0.63%
AstraZeneca (AZN) 7,240.00p -0.40%
Royal Bank of Scotland Group (RBS) 183.90p -0.33%
Land Securities Group (LAND) 738.00p -0.27%
Persimmon (PSN) 1,842.00p -0.24%
Direct Line Insurance Group (DLG) 292.30p -0.24%
Admiral Group (ADM) 2,171.00p -0.18%

FTSE 250 - Risers

Capita (CPI) 125.45p 4.24%
Victrex plc (VCT) 1,943.00p 2.48%
Euromoney Institutional Investor (ERM) 1,335.12p 2.23%
Card Factory (CARD) 156.00p 2.16%
Brewin Dolphin Holdings (BRW) 305.60p 2.00%
Games Workshop Group (GAW) 4,382.00p 1.76%
Tullow Oil (TLW) 210.24p 1.71%
Pets at Home Group (PETS) 227.40p 1.70%
Hastings Group Holdings (HSTG) 181.80p 1.62%
Man Group (EMG) 167.25p 1.58%

FTSE 250 - Fallers

Woodford Patient Capital Trust (WPCT) 42.80p -2.17%
OneSavings Bank (OSB) 348.20p -2.03%
TI Fluid Systems (TIFS) 158.80p -1.98%
Playtech (PTEC) 378.10p -1.84%
Savills (SVS) 828.50p -1.84%
Genus (GNS) 2,526.00p -1.79%
Wetherspoon (J.D.) (JDW) 1,520.00p -1.62%
Bakkavor Group (BAKK) 99.60p -1.58%
Charter Court Financial Services Group (CCFS) 287.00p -1.54%
CYBG (CYBG) 139.75p -1.31%

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