Shares in London kick off in the red, reflecting market fears that an unexpected September rate hike by US central bank the Federal Reserve may now be back on the table. Hawkish comments by Boston Fed president Eric Rosengren on Friday caught markets off-guard, sending the FTSE 100 heavily into the red after early gains. Now investors are awaiting the outcome of a hastily-arranged speech later today by Federal Reserve committee member Lael Brainard.
Brainard previously called for rates to remain on hold for longer and a change in tone could stoke a further sell-off in markets if expectations of a rate hike in September, which rose as high as 30% on Friday, increase further.
Cyclical stocks, particularly miners, are among the bigger fallers in the interest rates-inspired sell-off. Iron ore producer BHP Billiton (BLT) sheds 4.3% to 974p and Australian peer Rio Tinto (RIO) is also in the red at £22.64, down 3.6%. Also among the commodity fallers are Glencore (GLEN), down 3.9% at 178p, Anglo American (AAL), 3.8% lower at 814p, and Antofagasta (ANTO), off 3.3% to 483p.
Elsewhere, budget fashion-to-groceries group Associated British Foods (ABF) falls 4.6% to £30.11, despite the Primark-to-Twinings Ovaltine owner's pre-close trading statement highlighting better-than-expected trading with translational benefits from weaker sterling. Full-year earnings per share is expected to be 'marginally ahead' of last year, though ABF warns of a higher interest charge next year, with a decline in UK long-term bond yields expected to push its UK pension scheme from a surplus into a £200 million deficit.
HG Capital Trust (HGT) hops 5.4% higher to £14 on positive interims showing a continued strong net asset value (NAV) performance driven by double-digit sales and profit growth across its portfolio.
Cake decoration-to-food ingredients play Real Good Food (RGD:AIM) rises 3% to 35p on a positive trading update flagging strong order intake, notably in its premium bakery business, in the opening four months of the financial year. Executive chairman Pieter Totte also cheers with news Real Good Food has decided to begin paying dividends and as yet, has 'not seen any material negative impact' on any of its operations following the Brexit vote.
Patent attorney Murgitroyd (MUR:AIM) says its US presence was the main reason it was able to eke out a 6% gain in revenue to £42.2 million and 3% improvement in operating profit to £4.3 million. Patent markets in Europe and the UK remain sluggish, says chairman Ian Murgitroyd. Shares in Murgitroyd are marginally lower at 555p.
Document storage outfit Restore (RST:AIM) enjoys more acquisition-led growth, its £37.9 million of net takeover spending helping revenue surge 26% to £55.4 million and underlying profit-before-tax 35% higher at £9.6 million. Shares gain 2.6% to 364p.
