London open: Stocks edge lower ahead of Yellen speech

21st Jun 2016 08:14

(ShareCast News) - London stocks began the session trading slightly lower following a surge on the previous day, ahead of a key speech from US central bank chair Janet Yellen scheduled for later in the session, with the pound trading at its early May highs.As of 08:10 BST the FTSE 100 was trading lower by 0.64% or 39.64 points to 6,164.38.Market analyst Michael Hewson at CMC Markets said: "While yesterday's rebound in risk was helped by a shift in the polls towards 'Remain' the reduced prospect of an imminent Fed rate rise could well have helped as well given last week's comments by St Louis Fed President James Bullard when he suggested that in his view the prospect of multiple Fed rate rises was becoming ever more distant. This was, and is a remarkable shift in narrative from someone who last year was one of the more notable Fed hawks."Sterling was rising by 0.24% against the dollar to 1.4730, having the previous session posted its biggest one-day climb since 2008.Yellen is due to deliver her semi-annual Monetary Policy Report to Congress at 15:00 BST.In the Federal Reserve's policy meeting last week US rates were left on hold but Yellen hinted at a concern about the recent slowdown in the pace of jobs growth.Her reticence about the prospects of a rate rise in the next meeting or two was noted by economists as a stark contrast to recent comments that suggested a rate rise was looking ever more appropriate in the coming months.On the data front, UK public finance data emerges at 0930 BST while CBI industrial trends are at 1100 BST.In corporate news, Whitbread served up a slight improvement in sales in the first quarter of the year as its Costa coffee shops bounced back from a slowdown in the preceding few months.Group like-for-like (LFL) sales grew 1.8% as although Costa's sales were up 2.6%, the group's Premier Inn hotel chain saw LFL sales slow further to 2.1% from the rate seen in the fourth quarter.BHP Billiton said it was targeting another $600m in coal production costs by the end of the 2017 financial year.The mining group also increased its forecast for coal output for the current year to 43m tonnes, with plans to lift production to 46m tonnes in 2018."While cost compression has been evident across the industry, we continue to work hard under our new operating model to improve our performance," said BHP Billiton Minerals Australia president Mike Henry."Even in today's difficult environment, all of our operations remain cash positive."Takeaway food digital marketplace Just Eat announced on Tuesday that it has appointed Paul Harrison as chief financial officer and as an executive director, replacing Mike Wroe on 28 September.The FTSE 250 firm said Harrison is joining from WANdisco - a Silicon Valley-based, London-listed software company - where he has been chief financial officer since 2013.Saga said it was on track to achieve its targets for the year ending 31 January 2017 and continues to make good progress against its strategic priorities.Ahead of its annual general meeting at its headquarters in Folkestone later, the group, which provides products and services for the over 50, said it had seen solid trading across the core insurance and travel businesses.Chief executive officer Lance Batchelor said: "We have made a good start to the year across our core trading divisions. We continue to focus on our strategic objectives and remain on track to deliver on the targets we set out at our preliminary results on 19 April 2016."Defence company Chemring reported a wider loss for the first half and said it expects its full-year 2016 results to "slightly below" market expectations amid higher costs and a delayed contract.Chemring's compiled consensus of analysts' forecasts was for FY16 underlying operating profit of £48.7m.