London open: Stocks fall after hawkish Fed, despite US-China trade breakthrough

(Sharecast News) - London stocks fell in early trade on Thursday despite a breakthrough in US-China trade talks, as investors mulled a more hawkish tone from US Federal Reserve chair Jerome Powell.

At 0835 GMT, the FTSE 100 was down 0.4% at 9,716.25.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "News of the emerging thaw in trade relations between the US and China wasn't enough to power the FTSE 100 to another record this morning. It has retreated a little at the open, after reaching its best ever close of 9,756.14 on Wednesday.

"Following the conclusion of talks in South Korea, President XI said that a consensus had been reached on major trade issues, while Donald Trump revealed he'd be reducing tariffs after resolving a roadblock on Chinese exports of rare earth minerals. Details, however, were thin on the ground."

On Wednesday, the Fed cut interest rates by 25 basis points as widely expected, and announced the end of quantitative tightening. However, Powell dented the mood after he said a further reduction of the policy rate at the December meeting was "not a foregone conclusion".

Danske Bank said: "This led to a repricing of front-end rate expectations, with the implied probability of a December cut declining from above 90% to around 60%."

It added: "Ahead of the meeting, we expected Powell to avoid pre-committing to a December rate cut, but his clear pushback against the market pricing was more hawkish than even we anticipated.

"Powell emphasised that 'another cut in December is far from assured' amid the committee's 'strongly differing views' about the future, and that 'there is a growing chorus of feeling we should maybe wait a cycle'. He highlighted that despite the shutdown, available data does not signal significant further cooling in labour markets."

In equity markets, WPP tumbled after the advertising agency said it has launched a strategic review as it warned on profits again due to a slump in revenue.

Rathbones was also under the cosh after Jefferies initiated coverage of the stock at 'underperform'.

JD Sports and Whitbread both fell as they traded without entitlement to the dividend.

On the upside, Standard Chartered rose to the top of the FTSE 100 after saying it expects income for the year to be towards the upper end of its 5% to 7% growth range after reporting a rise in third-quarter earnings driven by its wealth division.

Pre-tax profit grew 3% to $1.77bn. Chief executive Bill Withers said the Asia-focused lender now expected to hit its 13% target for underlying return on tangible equity in 2025 - a year earlier than planned.

Haleon shot up after third-quarter revenue growth came in ahead of expectations.

Computacenter also gained as it said it was "comfortably ahead" ahead of the prior year's trading following a strong performance in the third quarter.

Market Movers

FTSE 100 (UKX) 9,716.25 -0.41%

FTSE 250 (MCX) 22,329.74 -0.53%

techMARK (TASX) 5,580.79 -0.48%

FTSE 100 - Risers

Standard Chartered (STAN) 1,574.00p 3.83%

Airtel Africa (AAF) 273.80p 2.01%

Haleon (HLN) 351.60p 1.94%

easyJet (EZJ) 482.70p 1.30%

Beazley (BEZ) 943.00p 1.02%

Prudential (PRU) 1,066.50p 0.71%

Vodafone Group (VOD) 91.56p 0.68%

BT Group (BT.A) 184.30p 0.55%

Games Workshop Group (GAW) 15,670.00p 0.45%

Centrica (CNA) 177.10p 0.34%

FTSE 100 - Fallers

WPP (WPP) 312.80p -13.26%

Flutter Entertainment (DI) (FLTR) 17,720.00p -2.07%

Diageo (DGE) 1,721.00p -1.97%

JD Sports Fashion (JD.) 96.58p -1.77%

Rightmove (RMV) 656.60p -1.44%

Glencore (GLEN) 366.00p -1.41%

Rio Tinto (RIO) 5,471.00p -1.35%

Coca-Cola Europacific Partners (DI) (CCEP) 6,730.00p -1.32%

Babcock International Group (BAB) 1,202.00p -1.31%

Whitbread (WTB) 3,006.00p -1.31%

FTSE 250 - Risers

Computacenter (CCC) 2,810.00p 2.70%

Quilter (QLT) 189.40p 1.39%

Me Group International (MEGP) 185.80p 0.98%

Partners Group Private Equity Limited. (EUR) (PEY) 10.75p 0.94%

Elementis (ELM) 166.20p 0.73%

JPMorgan India Growth & Income (JIGI) 1,084.00p 0.56%

Drax Group (DRX) 736.00p 0.55%

Wizz Air Holdings (WIZZ) 1,061.00p 0.47%

Bakkavor Group (BAKK) 223.50p 0.45%

BlackRock World Mining Trust (BRWM) 678.00p 0.44%

FTSE 250 - Fallers

Rathbones Group (RAT) 1,822.00p -4.51%

Dunelm Group (DNLM) 1,128.00p -3.26%

Kier Group (KIE) 221.00p -2.64%

Foresight Solar Fund Limited (FSFL) 78.20p -2.62%

Bluefield Solar Income Fund Limited (BSIF) 79.20p -2.58%

Mitchells & Butlers (MAB) 244.50p -2.20%

C&C Group (CDI) (CCR) 136.00p -2.16%

Renishaw (RSW) 3,550.00p -2.07%

Hilton Food Group (HFG) 646.00p -1.97%

Ibstock (IBST) 133.40p -1.77%