London open: Stocks nudge up ahead of UK and US GDP; RBS in the red
London stocks nudged higher in early trade on Friday as investors eyed the release of first-quarter economic growth figures from the UK and the US, with RBS in the red after its latest earnings.
At 0830 BST, the FTSE 100 was up 0.1% to 7,428.91, while the pound was down 0.2% against the dollar at 1.3887 and flat versus the euro at 1.1504.
Spreadex analyst Connor Campbell said: "It was all a bit tentative out there this Friday, as investors wait to get a look at the first glimpse of the UK’s (and, later, US’s) Q1 GDP readings.
"Given that there’s a Bank of England meeting in a couple of weeks - once a rate hike-certainty, now anything but - the focus of the first quarter growth figure from the UK will be on its potentially hawkish or dovish qualities. Not necessarily great news for the likes of Ian McCafferty and Michael Saunders, then, that analysts are expecting the GDP reading to come in somewhere between 0.2% and 0.3%, a ‘Beast from the East’-inspired drop from Q4’s still disappointing 0.4%."
The UK GDP data is due out at 0930 BST, while the US figures are at 1330 BST.
Before that, investors were digesting the latest survey from mortgage lender Nationwide, which showed that house price growth picked up this month.
Annual house price growth rose to 2.6% from 2.1% in March, in line with expectations. On the month, house prices were up 0.2% in April versus a 0.2% drop the month before, as expected.
Nationwide’s chief economist Robert Gardner said: "February saw a softening in house purchase approvals to 64,000 cases, following a surprise rise in January. These figures are broadly in line with our expectations and close to the average for the last three months of 2017. Surveyors continue to report subdued levels of new buyer enquiries and recent months have also seen a softening in new instructions.
"Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and the ongoing squeeze on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year. We continue to expect house prices to rise by around 1% over the course of 2018."
Meanwhile, UK consumer confidence as measured by GfK declined by two points in April to -9, with four of the five measures lower, despite wage growth having recently overtaken inflation.
Joe Staton, director of client strategy at GfK, said: "We now have 28 consecutive months without a positive overall index score. The last positive was in January 2016. Hope springs eternal for better numbers but the continued uncertain economic forecast means that the sun is not yet shining brightly for UK consumers.
"Despite the headline news proclaiming that UK wages rose faster than inflation, that there’s no imminent interest rate rise on the horizon, and that we enjoy record high levels of employment, the Index continues to bump along stubbornly in negative territory with a two-point slide to -9 this April."
In corporate news, Royal Bank of Scotland Group fell as it reported a threefold increase in first quarter net profits as the cost of restructuring and litigation fell, but there remains a looming threat of a sizeable penalty from US authorities.
Merlin Entertainments edged up as it said group trading at the current "seasonally quiet" point of the year was in line with expectations, and consistent with the guidance provided on 1 March.
Computacenter rose after hailing a better-than-expected first quarter, with revenue up 23%.
Defence company Ultra Electronics ticked higher after reiterating that it expects to make "modest" progress in constant currency underlying revenue and operating profit this year, and that the cash performance will be more heavily weighted to the second half.
Wealth manager Brewin Dolphin slipped after announcing that finance director Andrew Westenberger will step down next month "by mutual agreement to pursue other interests".
Builders’ merchant Travis Perkins nudged down despite maintaining its full-year outlook and posting a jump in first-quarter sales.
On the broker note front, Barclays upgraded Ashmore to ‘overweight’ from ‘equalweight’ but cut Jupiter Fund Management to ‘underweight’ from ‘equalweight’.
EasyJet was up as RBC Capital hiked its earnings estimates and target price, while Vesuvius was lifted to ‘buy’ from ‘hold’ at Investec.
Market Movers
FTSE 100 (UKX) 7,428.91 0.10%
FTSE 250 (MCX) 20,175.44 0.19%
techMARK (TASX) 3,419.19 0.34%
FTSE 100 - Risers
Scottish Mortgage Inv Trust (SMT) 468.92p 1.72%
easyJet (EZJ) 1,607.00p 1.45%
Royal Mail (RMG) 585.60p 1.00%
Shire Plc (SHP) 3,865.00p 0.99%
Micro Focus International (MCRO) 1,284.50p 0.98%
Smith (DS) (SMDS) 518.20p 0.90%
Sage Group (SGE) 640.00p 0.79%
GKN (GKN) 459.90p 0.74%
Imperial Brands (IMB) 2,559.14p 0.71%
Taylor Wimpey (TW.) 191.35p 0.68%
FTSE 100 - Fallers
Carnival (CCL) 4,611.00p -1.41%
Royal Bank of Scotland Group (RBS) 268.90p -1.28%
BHP Billiton (BLT) 1,522.00p -0.92%
Kingfisher (KGF) 301.50p -0.72%
Rio Tinto (RIO) 3,921.00p -0.67%
Smurfit Kappa Group (SKG) 3,034.00p -0.65%
BT Group (BT.A) 244.50p -0.39%
Coca-Cola HBC AG (CDI) (CCH) 2,449.00p -0.37%
Rolls-Royce Holdings (RR.) 839.60p -0.33%
CRH (CRH) 2,548.00p -0.31%
FTSE 250 - Risers
Spire Healthcare Group (SPI) 234.20p 2.27%
Vesuvius (VSVS) 595.00p 2.23%
Petrofac Ltd. (PFC) 610.29p 2.06%
Computacenter (CCC) 1,250.00p 1.96%
Inmarsat (ISAT) 376.80p 1.84%
Hunting (HTG) 807.50p 1.83%
Metro Bank (MTRO) 3,296.00p 1.35%
Derwent London (DLN) 3,129.00p 1.26%
JD Sports Fashion (JD.) 393.67p 1.25%
Aveva Group (AVV) 2,126.00p 1.24%
FTSE 250 - Fallers
TalkTalk Telecom Group (TALK) 125.80p -2.48%
Jupiter Fund Management (JUP) 444.40p -2.42%
Alfa Financial Software Holdings (ALFA) 338.00p -2.31%
FDM Group (Holdings) (FDM) 990.00p -2.17%
Drax Group (DRX) 312.00p -2.07%
Kaz Minerals (KAZ) 903.60p -1.38%
Howden Joinery Group (HWDN) 475.00p -1.25%
Brewin Dolphin Holdings (BRW) 359.00p -1.21%
Bakkavor Group (BAKK) 186.00p -1.06%
RHI Magnesita N.V. (DI) (RHIM) 4,246.00p -1.03%