The FTSE 100 kicked off on a perky note, but soon gave up early gains with investors wary ahead of spate of important economic data and the Autumn Statement by Chancellor George Osborne.
In early trading, the FTSE 100 reversed on opening gains to stand 11 points lower at 6,731. Oil price volatility remains a big concern, but the flurry of global economic data on the runway and Osborne’s statement added to investor caution early on in the session.
Service sector data is due for the UK, eurozone and the US. Overnight, it emerged that China’s services sector grew slightly faster in November. That is a welcome respite to a run of underwhelming data, but still unlikely to allay concerns about the softening Chinese economy.
Data on eurozone retail sales for October and a report on the US jobs market for November is also on the way. The Fed, meanwhile, is due to release its ‘Beige Book’, a snapshot of regional economic conditions across the US. Investors will be hoping it provides some hints on the timing of a rate hike by the Fed.
Earlier this morning, the British Retail Consortium reported that food prices dropped last month for the first time since it started collecting data in December 2006, as a supermarket price war intensified.
On the Autumn Statement front, Reuters says Chancellor George Osborne is set to concede that his push to fix the public finances has suffered another setback thanks to slow pay growth, six months before voters head to the polls.
Market action this morning included accountancy software group Sage surging after it revealed a sharp increase in 2014 profits. The group assured investors it is on track to meet expectations for this year.
Wealth manager Brewin Dolphin was unchanged after it posted a fall in full-year pre-tax profit. It blamed one-off costs including a failed roll-out of new software.
In commodities, oil rose more than 1%, with Brent climbing above $71 a barrel, recovering slightly from losses in the prior session as a turbulent market struggled to find a price floor.