There’s been some selling seen in London this morning with the leading stock benchmark lower by just shy of 25 points. Overall the FTSE 100 remains largely directionless and has continued to oscillate within a relatively tight 200-point range for the past 6 weeks. Despite some disappointing data the pound remains well supported and is higher against most of its peers on the day.
UK Construction growth slows
The pace of expansion in the construction sector has eased to an 11-month low according to the latest PMI data released this morning with drops in commercial work and a decline in new orders the two most worrisome aspects of the report. If we ignore the wild gyrations seen in the aftermath of last summer’s Brexit vote, the bigger picture appears to be one of a gradual decline in this economic indicator for the past couple of years and after this morning’s print of 51.9, the index is not far from slipping to under 50 and ending the current period of expansion.
Services data to settle the score?
It’s a case of one beat and one miss as far as the PMIs this week are concerned, leaving the score tied heading into tomorrow’s services release. Thursday’s number often garners the most attention of the trio - due to the sector being the largest in the UK by some distance - and the consensus expectations are for a small rise on the prior reading. The reaction in the pound to the UK releases in the past couple of days have been subdued and whilst the services number typically sees a greater reaction, several traders may well opt to stay on the sidelines tomorrow given the close proximity of the BoE rate decision.
Standard Chartered (LON:STAN) slumps on dividend disappointment
The worst performing stock on the FTSE 100 this morning is Standard Chartered with the share price declining in excess of 5% despite a 93% increase in profits. An underlying pre-tax profit of $1.8bn for the first six months of this year was broadly in-line with analysts’ expectations, but investors were clearly hoping for more with no news of a resumption of dividend payouts being met with disdain amongst shareholders. Overall it’s been a mildly disappointing earnings season for banks in the UK so far with Lloyds (LON:LLOY) and Barclays (LON:BARC) seeing their share prices fall on yet another increase to their PPI provisions. HSBC was the star performer, rising on an beat of expectations and the promise of more share repurchases, but today’s results from Standard Chartered mean that whilst the worst of the troublesome past two years may well be behind the firm, the recovery has not reached takeoff velocity just yet. RBS (LON:RBS) will round of the season on Friday with what will likely be a highly anticipated release due to the lender remaining state-owned.