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London pre-open: Stocks to edge down ahead of retail sales
London stocks were set to edge lower at the open on Thursday as investors eyed the release of retail sales data for April.
The FTSE 100 was called to open down seven points at 7,788.
Stocks on Wall Street ended in the black after the latest Federal Reserve meeting minutes suggested that Fed officials, while hinting that a rise was coming next month, might be prepared to allow inflation a modest overshoot of target before becoming too concerned.
"This interpretation appeared to lessen expectations that the Fed would be overly aggressive when it came to pushing rates higher this year, as markets dialled back expectations of four rate rises this year, to a maximum of three," said CMC Markets analyst Michael Hewson.
Hewson said that the retail sales numbers due at 0930 BST should seea strong rebound from the March underperformance with a gain of 0.9% expected including fuel, and a gain of 0.5% without fuel sales.
"Early indications also point to a fairly decent performance in May if yesterday's CBI reported sales numbers are any indication.
"While wages are now rising faster than inflation there is a concern that the recent rise in fuel prices, along with increases in some tax rates may impact on consumer spending in the coming months. This pinch may well start to show up in these retail spending numbers as the summer progresses. As such the prospect of a UK rate rise this year is slowly diminishing with the June or August window slowly closing. If we don't get a move by August it's unlikely we'll get one at all given that Ian McCafferty will be leaving the MPC at the end of that month."
In corporate news, B&Q and Screwfix owner Kingfisher sales were hammered by bad weather in February and March, with like-for-like sales down 4% but management still confident about the underlying turnaround of the business.
Chief executive Véronique Laury said the group continued to see tangible effects of her One Kingfisher plan, with around 40% of product ranges unified across the UK, France and Europe and gross margins consequently on the up.
TalkTalk announced the sale of its direct business-to-business operation for £175m as reorganisation costs drove the broadband operator to a loss last year.
The company reported a pre-tax loss of £73m for the year to the end of March compared with a £70m profit a year earlier. Headline earnings dropped to £233m from £361m in line with consensus.
Intertek Group updated the market on its trading on Thursday, reporting that group revenue was up 4.4% at constant currency for the four months to 30 April at £861.2m, though that was down 2.5% at actual rates.
The company we said it saw "good" organic revenue growth of 4.0% at constant rates during the period, with the products division ahead 6.6%, trade up 0.6%, and resources rising 0.3%.