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As equity markets in London edged lower at Wednesday’s open, it was all about the high street following full-year numbers from B&Q owner Kingfisher, a profit warning from menswear specialist Moss Bros and updates from Carpetright, SCS and Mothercare.
At 0840 GMT, the FTSE 100 was down 0.2% to 7,047.91, with investors erring on the side of caution ahead of key UK jobs data, with average earnings, the ILO unemployment rate and the claimant count rate all due at 0930 GMT.
Meanwhile, the pound was flat against the euro at 1.1429 and 0.3% firmer versus the greenback at 1.4040.
Market participants were also eyeing the latest policy announcement from the Fed after the close, along with a speech by chair Jerome Powell and the central bank’s economic projections. With a 25 basis points rate hike priced in, the main focus will be on the dot plot projections to see how many more rate increases are on the cards this year.
Spreadex analyst Connor Campbell said it was likely to be “a jittery afternoon” for investors ahead of the Fed decision.
UK wage growth figure including bonuses are expected to climb from 2.5% to 2.6% in January, a move that would take it to its best level in over a year. Campbell said any disappointment could sap the energy from the pound.
Economist Paul Hollingsworth at Capital Economics said with the BoE focussing more on wage growth recently, if Wednesday’s figures reveal the expected pick-up it would all but seal the deal for an interest rate rise in May.
In corporate news, Kingfisher slumped as it reported an 8% fall in annual profits on flat sales and issued a cautious outlook.
Moss Bross tumbled, meanwhile, after warning that it now expects profits this year to be “materially lower” than current market expectations.
Carpetright gained ground after saying it has secured a £12.5m emergency loan from one of its biggest shareholders, announcing a £40m to £60m cash call and saying it is looking at a company voluntary arrangement to cut rents and close stores.
Mothercare was also on the front foot as it got some much needed breathing space after its lenders agreed to defer the testing of its financial covenants due on 24 March.
Elsewhere, GKN slipped as it branded suitor Melrose Industries a “novice” operator with no plan in the latest round of accusations between the companies locked in a hostile bid battle. The FTSE 100 engineering company published a series of rebuttals to what it described as misleading statements made by Melrose, which is trying to buy GKN against the will of GKN’s board.
Inhaled products design and development business Vectura Group was also trading lower despite in-line full-year results, while Ferrexpo ticked down even as it declared a higher special dividend than most investors may have expected thanks to higher iron ore prices offsetting slightly lower production.
Softcat fell sharply even as the provider of IT infrastructure products and services reported a rise in interim operating profit and revenue and lifted its dividend by 14% amid strong customer demand. Traders pointed out that the stock had rallied strongly into the results.
Oilfield services provider Petrofac advanced as it was awarded a new contract in India valued at around $200m.
In broker note action, 888 Holdings was cut to ‘hold’ from ‘add’ by Numis, while Ocado was downgraded to ‘neutral’ from ‘buy’ at Goldman Sachs.
