July 9, 2019, 7:52 a.m. EDT

London markets muted as investors sit tight ahead of Fed rate cut clues

Markets look towards Federal Reserve chair Jerome Powell’s testimony on Wednesday for clues on further rate cuts

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By Callum Keown


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Federal Reserve Board Chairman Jerome Powell will give a speech later Tuesday.

London markets remained muted as investors sat tight ahead of further clues on the Federal Reserve’s plan for interest rates.

The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.27%   was flat despite European stocks falling after German chemicals giant BASF /zigman2/quotes/204280060/delayed DE:BAS +0.13%   issued a trade-war induced profit warning fueling fears of a global automotive slowdown.

U.K. chemical makers suffered, along with struggling miners as copper prices fell, but consumer goods and utilities firms made gains to leave the index flat.

What’s moving the markets?

Markets looked towards Federal Reserve chair Jerome Powell’s testimony on Wednesday for clues on further rate cuts.

A rate cut is anticipated later this month but Powell’s comments could shed light on the scale of the cut and whether another could follow in September.

AJ Bell investment director Russ Mould said: “The FTSE 100 is refusing to budge again as investors sit patiently and wait for a speech from U.S. Federal Reserve chairman Jerome Powell today and minutes tomorrow from the Fed’s last meeting.

“Investors want clues on the direction of interest rates as that matters for equities demand.”

The world’s largest chemicals company BASF cut its full-year profit forecast by up to 30%, blaming the trade war between the U.S. and China and a slowdown in the automotive industry.

European chemical producers, as well as auto makers, slumped following the warning, weighing down on markets across the continent.

Which stocks are active?

Basf’s profit warning hit U.K. chemical makers Croda /zigman2/quotes/206442951/delayed UK:CRDA -0.25%   and Johnson Matthey, /zigman2/quotes/207054035/delayed UK:JMAT +0.96%   which both slid 2.5%.

The German chemical giant’s warning over a global automotive slowdown also hit Melrose Industries /zigman2/quotes/210306391/delayed UK:MRO +1.51%  , whose GKN unit provides automotive technology, which led the FTSE fallers plummeting 7.2%.

Ocado /zigman2/quotes/207225647/delayed UK:OCDO +0.63%   shares rose 9.5% despite losses widening in the first half of the year due to the devastating fire at its Andover warehouse. Investors were buoyed by the underlying figures as revenue rose 11% to £882.3 million.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,235.66
+19.41 +0.27%
Volume: 244,102
Dec. 12, 2019 2:26p
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/zigman2/quotes/204280060/delayed
DE : Germany: Frankfurt
67.29
+0.09 +0.13%
Volume: 3,229
Dec. 12, 2019 3:08p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€512,034
loading...
/zigman2/quotes/206442951/delayed
UK : U.K.: London
4,838.00 p
-12.00 -0.25%
Volume: 101,591
Dec. 12, 2019 2:25p
P/E Ratio
26.77
Dividend Yield
1.83%
Market Cap
£6.25 billion
Rev. per Employee
£302,817
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/zigman2/quotes/207054035/delayed
UK : U.K.: London
2,837.00 p
+27.00 +0.96%
Volume: 262,184
Dec. 12, 2019 2:26p
P/E Ratio
14.19
Dividend Yield
3.06%
Market Cap
£5.44 billion
Rev. per Employee
N/A
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/zigman2/quotes/210306391/delayed
UK : U.K.: London
228.90 p
+3.40 +1.51%
Volume: 1.91M
Dec. 12, 2019 2:24p
P/E Ratio
N/A
Dividend Yield
2.08%
Market Cap
£10.96 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/207225647/delayed
UK : U.K.: London
1,205.00 p
+7.50 +0.63%
Volume: 489,602
Dec. 12, 2019 2:26p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
£8.36 billion
Rev. per Employee
£112,886
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