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Royal Mail crashes out of FTSE 100; markets brush off North Korea fears

Royal Mail has crashed out of the FTSE 100 with housebuilder Berkeley Group taking its place - REUTERS
Royal Mail has crashed out of the FTSE 100 with housebuilder Berkeley Group taking its place - REUTERS

Market report

Royal Mail crashed out of the FTSE 100 in the latest quarterly reshuffle this evening, receiving the axe after drifting 16pc this year as falling marketing mail and persistent pension problems began to bite.

As expected, troubled doorstep lender Provident Financial is the other blue-chip casualty after its shares nosedived 66pc last week following its second profit warning of the summer, leaving its market capitalisation well short of the requirements. 

As of Sept 18, UAE-based healthcare provider NMC Health and housebuilder Berkeley Group will take up their places on the blue-chip index.

Unlike Provident’s explosive exit out of the blue-chip index, Royal Mail’s valuation has steadily faded ever since the EU referendum, the parcel deliverer narrowly escaping demotion in the previous reshuffle. The unresolved pensions dispute still hanging over the company and falling marketing mail revenues since Brexit has driven Royal Mail’s steady slide downwards, according to Investec analyst Alex Paterson.

Of the FTSE 250 exits, construction giant Carillion’s fall from grace is the highest profile, its 70pc plunge in a matter of days in July following its own shock profit warning making it a certain for the chop. The company “fell foul of the outsourcers’ kryptonite, bidding too aggressively for contracts that ultimate proved loss making”, explained Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

Away from the reshuffle, the FTSE 100 rebounded into positive territory as investors quickly brushed off the new escalation on the Korean Peninsular.  European equity markets were the main winners from the prompt return to risk-on mode with the FTSE 100 climbing 27.83 points to 7,365.26. Stocks in Paris and Frankfurt enjoyed stronger gains after weakening most on Tuesday due to the euro’s strength with the DAX and CAC 40 both up 0.5pc. 

Crude prices continued to slip as the severe flooding caused by Hurricane Harvey took US refineries out of action, pulling down demand and Brent crude to below $51.50 per barrel. Riding the markets’ wave of optimism BP and Royal Dutch Shell B shook off the drop in prices to rise 1.5p to 441.9p and 5p to £21.59, respectively. 

Expectations that the aftermath of the storm could drive new business for equipment rental firm Ashtead lifted it 77p higher to £16.72, making it the top blue-chip riser in London. Broadcaster ITV reversed some of Tuesday’s losses based on mounting fears over the health of the advertising market to climb 3.9p to 156.9p while J Sainsbury jumped 5.1p to 235.8p after the Co-Op revealed that it is in talks over acquiring Nisa, the ‘big four’ supermarket’s former takeover target. 


Markets wrap: Risk aversion quickly dissipates; euro retreats from eight-year high against the pound

FTSE 100
Equipment rental firm Ashtead and broadcaster ITV have been two of the biggest risers on the FTSE 100 today

With the last rise and fall in tensions on the Korean Peninsular still fresh in the memory of investors, the markets swiftly resumed normal service today with European stock indices rebounding strongly from yesterday's retreat due to fears of conflict in Asia.

Given the green light by US equities' gains overnight, the FTSE 100 jumped 0.5pc as risk aversion quickly dissipated despite US president Donald Trump warning that "talking is not the answer" to problems in the region.

Equipment rental firm Ashtead was the standout blue-chip performer in the UK, rising just under 5pc, on expectations of increased sales in the aftermath of Hurricane Harvey while ITV rebounded from yesterday's losses after fears mounted that the advertising market is shrinking.

The euro's retreat due to the waning appeal of safe havens has helped the pound come off its eight-year low against the currency. This afternoon, sterling is trading 0.8pc higher against the euro at €1.0842 while against the dollar it has recovered to flat territory at $1.2933 despite stronger-than-expected GDP and jobs figures coming out of the US.

IG market analyst Joshua Mahony said this on today's rebound:

"Widespread relief seems to have spread across financial markets today, with the FTSE gaining ground as fears over North Korea dissipate. Despite today’s gains, it is clear that the North Korean problem will not go away anytime soon. While Trump today declared that the time for talking is over, Chinese backing of the Pyongyang regime means conflict remains an unlikely eventuality.

"After recent weeks, traders are cognizant of the fact that any news from North Korea is almost certain to drive a rush to the safety of gold and the yen. With Donald Trump returning to Washington ahead of his latest tax reform speech, FX traders will be hoping that we will see an extension to the greenback rebound  seen in the past 24-hours."


Aston Martin targets Japan as part of UK trade mission

Aston Martin is eyeing £500m of trade with Japan over the next five years

Aston Martin is broadening its horizons and targeting £500m of trade with Japan as part of chief executive Andy Palmer’s turnaround strategy.

The sports car company is investing up to £30m in a technology centre and “luxury accelerator office” in Japan to help develop new systems as well as understand the mindset of the country’s motorists.

Other plans from the Warwickshire-based business  - which has raced back into profit after years of losses - include establishing a global brand centre and base in Tokyo, as well as its boosting its dealer network in the country.

Mr Palmer is on the current UK trade mission to Japan led by Prime Minister Theresa May and said that the country was an important part of Aston’s future.

Read Alan Tovey's full report here


Petrofac slashes dividends to weather stormy outlook

Chief executive Ayman Asfari said that the company is "well placed on a number of bids and have a healthy order backlog"

Troubled oil services group Petrofac has almost halved its shareholder payouts as it prepares to weather a storm of legal woes as market pressures persist.

Petrofac is hoping to protect its balance sheet from an ongoing market slowdown by cutting its dividend by 42pc and reining in its spending after net debt climbed to just above $1bn (£774m) at the end of June.

The dividend will fall to 12.70 cents a share for the six months to June 30, compared with 22 cents this time last year.

The squeeze on spending during the downturn led to lower first half revenues of $3.1bn compared to $3.8bn in the same months last year, despite reporting higher manhours of work. This resulted in a pre-tax profit of $158m from $165m the year before.

Shares have dipped 1.3pc following the results.

Read Jillian Ambrose's full report here


US markets ignore Trump's assertion that "talking is not the answer" to North Korea issue

Investor anxiety over North Korea has largely dissipated

US stocks have largely had a sluggish start to trading this afternoon after avoiding yesterday's sell-off, the Dow Jones and S&P 500 nudging up slightly into positive territory.

Not even Donald Trump's assertion on Twitter that "talking is not the answer" to the latest escalation from North Korea could send investors scurrying back to safe havens, however.

 Spreadex analyst Connor Campbell said this on markets stateside this afternoon:

 "The greenback is now up 0.1% against the pound, 0.5% against the yen (where it’s back above ¥110 for the first time in nearly a fortnight) and 0.7% against the euro (pushing the Eurozone currency back towards $1.19). All this meant that the Dow Jones couldn’t join in with day’s rebound, instead flitting in and out of the red around the 21870 mark.

"To be fair to the Dow, however, it actually sparked Wednesday’s European gains last night after climbing more than 200 points from its intraday lows.   As for the European indices, the dollar’s latest attempt at a comeback allowed them to shake-off their midday grogginess.


Crude stocks fall but fails to lift oil price

US crude stocks retreated by a further 5.4m barrels last week, according to data just released by the US Energy Information Administration, another drawdown sharper than expected.

After retreating this morning as demand dropped due to Hurricane Harvey taking a fifth of the US' oil refining capacity out of action, Brent crude has stabilised at $51.55 per barrel.

That might be the last reliable stocks data from the US we get for a while given that the storm in the US will have distorted the figures from next week's release onwards. 


Marks & Spencer in talks to offload Hong Kong and Macau shops

Marks & Spencer has been in Hong Kong for almost three decades

Marks & Spencer is taking further steps to overhaul its overseas businesses by starting talks to sell its shops in Hong Kong and Macau to a Dubai-based conglomerate.

The British retailer has been in Hong Kong for almost three decades and now has 27 shops in the region and Macau.

Marks & Spencer said that the talks with Al-Futtaim follow its strategic review of its international businesses last year, which signalled a greater focus on franchise and joint ventures rather than wholly-owned stores.

Al-Futtaim, which already operates 43 M&S shops across seven markets in the Middle East, Singapore and Malaysia, is expected to purchase and enter into a franchise contract to continue running the Hong Kong and Macau stores.

Read Ashley Armstrong's full report here

Marks and Spencer


The Co-op strikes exclusive Nisa £140m takeover talks

The Co-op has entered into exclusive takeover talks with convenience chain rival Nisa

The Co-operative has entered exclusive talks to take over Nisa for £140m just two weeks after larger rival Sainsbury's dropped out of the running. 

Nisa had initially snubbed the Co-op's interest in favour of the supermarket's £130m offer, despite the former offering more money.

Sainsbury's had said that it would not make its bid conditional on Nisa clinging on to a supply contract with McColls convenience chain, which accounted for around 35pc of its sales.

But Sainsbury's shelved its Nisa interest after it emerged that the convenience wholesaler had lost the McColls contract to Morrisons. The supermarket was also concerned the competition watchdog would intervene.

It is understood that the Co-op is now proposing a Nisa takeover for the same price as it had offered before - widely thought to be £140m - despite Nisa no longer having the McColls contract. 

Read Ashley Armstrong's full report here


Could the dollar be due a rebound given strong recent data?

While the pound dived against the dollar around an hour ago in reaction to the stronger-than-expected economics data coming out of the US this afternoon, sterling has rebounded straight back up again to flat territory.

If Friday's official jobs report echoes today's data from the ADP  and "more importantly the wages numbers start to show evidence of inflationary pressures", the dollar could begin to reverse its recent decline, argues CMC Markets analyst Michael Hewson.

Despite consistently strong economics data of late, the dollar is still stuck close to a two-year low against a basket of leading currencies. It should be noted, however, that the greenback is still far higher than it has been for the majority of the period since the financial crisis. Is the dollar due a rebound or was its strength in the immediate aftermath of Donald Trump's election an overshoot by the markets? 

Mr Hewson added on other factors that could propel the dollar:

"Currently US rate hike expectations are priced at 33% for a move in December, which seems rather low at this point in time. There is also the prospect that for all President Trump’s flaws and the upcoming battle over the debt ceiling that Hurricane Harvey could offer the Republicans a quick win in terms of avoiding a confrontation there as well as agreeing a fiscal stimulus plan, which would also play well not only to the party’s key support base but across the country as a whole.  

"It is quite apparent that the heavy damage that has been wrought on Louisiana and Texas will require significant Federal funds to help clear up, as well as repair the damage, which if played correctly could give Trump a political victory of the type that his Presidency has been lacking thus far."


BMW unveils concepts for British-built electric Mini

How the all electric Mini is expected to look

BMW has revealed concept designs for the Mini Electric, the new car that will be built at the company’s huge plant in Oxford.

The first example of the battery-powered vehicle is set to roll off the line at the Cowley plant in 2019, after the German parent company last month confirmed production would stay at the historic home of the small car.

The decision was hailed by the Government as a vote of confidence in the UK that guaranteed 4,500 jobs despite Brexit and the potential economic impact it might have.

Read Alan Tovey's full report here


Job figures confirm strong US economy

Both the US job and GDP figures exceeded expectations

The ADP's US employment report also dropped this afternoon and, like the GDP figures, confirms that the US economy is in rude health.

Some 237,000 jobs were added to the economy in August, according to the ADP, far exceeding expectations of 185,000.

Chief economist at Moody’s Analytics Mark Zandi said on the figures:

“The job market continues to power forward. Job creation is strong across nearly all industries, company sizes. Mounting labor shortages are set to get much worse.

"The initial BLS employment estimate is often very weak in August due to measurement problems, and is subsequently revised higher. The ADP number is not impacted by those problems.” 

We'll have to wait until Friday to see if the ADP's figures have been matched by official estimates.


US economy grew by 3pc in the second quarter, hitting Trump's target growth rate

The US hit 3pc annualised growth in the second quarter, reaching Donald Trump's target growth rate

The US economy grew at an annualised rate of 3pc in the second quarter, according to the US Bureau of Economic Analysis, comfortably beating expectations of 2.7pc and hitting Donald Trump's target of 3pc.

The pound has sunk back below $1.29 against the dollar immediately after the second GDP estimate came in stronger than expected. No reaction from Mr Trump himself but I'm pretty sure a comment will be forthcoming.

There's also a little more economics data trickling out of Europe this afternoon. Advance figures show that inflation in Germany picked up slightly to 1.8pc in August from 1.7pc the previous month.

The headline figure was pushed up by higher energy and food inflation, according to Pantheon Macro chief eurozone economist Claus Vistesen.

He added on the country's inflation outlook:

"We think non-energy goods inflation rebounded, though, offsetting lower services inflation. Robust GDP growth and record low unemployment suggest that German inflation pressures will continue to build in coming quarters. "


Mortgage lending hits highest level since 2008 as slowdown fears ease and credit card splurge slows

Britain’s slowdown could have run its course as business lending is rising, mortgage lending growing at a steady pace and the boom in consumer credit - which the Bank of England fears could be a risk to financial stability - appears to be moderating.

Mortgage approval numbers for home purchases climbed sharply from 65,318 in June to 68,689 in July according to Bank of England numbers, surprising economists and raising hopes that the housing market is on the up.

By value, total mortgage lending hit £21.2bn in the month, the highest level since 2008 as borrowing to buy homes and to remortgage both increased.

Mortgages are cheaper than ever before, with the average rate on a new loan falling to just 1.95pc - the lowest level on record at the Bank of England.

Read Tim Wallace's full report


Lunchtime update: Markets resume risk-on mood; euro gives up gains on pound

FTSE 100
The FTSE 100 has reversed some of yesterday's 0.9pc fall as fears grew about escalating tensions in Asia

European stock markets have resumed normal service today following yesterday's North Korea-related wobble with the FTSE 100 advancing 0.4pc this morning.

After being given the green light to revert back to risk-on mode by US equities reversing early losses overnight, European stocks have clawed back some lost ground.

Broadcaster ITV is leading the pack in London after suffering yesterday on fears that the advertising market is shrinking while FTSE 100 equipment rental firm Ashtead has jumped 3pc on the potential for increased sales in the aftermath of Hurricane Harvey.

On the currency markets, the pound has taken advantage of the euro's retreat, rising 0.7pc to €1.0832 after sliding to an eight-year low yesterday. A mixed bag of data from the Bank of England showing consumer credit slowing but corporate lending soaring has largely resulted in a flat finish for the pound's morning against the dollar, however, trading at $1.2924.

Here's the current state of play in Europe: 

FTSE 100: +0.36pc

DAX: +0.44pc

CAC 40: +0.46pc

IBEX: +0.55pc


Brent crude slips from Hurricane Harvey highs

Brent crude has pared of some of its early losses this morning

Brent crude has slipped off its Hurricane Harvey-inspired highs this morning and retreated to around $51.80 per barrel.

The price peaked at $52.80 per barrel on Monday but the lack of momentum is "confirmation that the market is still broadly oversupplied", according to IG chief market analyst Chris Beauchamp.

Meanwhile, European stock markets are still riding high as investors brush off the rising tensions in North Korea.

The markets are turning a little more gloomy as the day progresses, however, says Spreadex analyst Connor Campbell. 

He commented:

"Europe’s Wednesday rebound lost some of its shine as the day went on, with investors perhaps struggling to justify their initial cheeriness. The FTSE saw its gains shrink from 0.6% to 0.2%, in large part due to a reversal from Brent Crude, which is once again threatening to fall below $51.50 per barrel.

"This in turn erased BP’s early growth and sent Shell lower by half a percent, explaining the UK index’s own slowing. The FTSE also wasn’t helped by the pound’s latest attempt at a comeback against the euro, sterling climbing above €1.08 with a 0.4% increase."


Shares in HSS Hire plunge after warning on sales and profits

HSS provides equipment to consumers and businesses

Shares in tool rental group HSS Hire plunged 19pc in early trade after it said sales had been “materially slower” than targeted and warned its profits would be lower than expected in the second half of the year.

HSS said revenues in the six months to July 1 had fallen by 3.4pc to £160.5m, while pre-tax losses widened to £30.1m compared to £7.8m in the first half of last year.

It said profits had been hit by “substantial operating model changes”.

Steve Ashmore, who took up the post of chief executive in June, said: “Whilst the rate of recovery in our rental revenues has been positive, it has been materially slower than originally targeted, leading to lower than expected profitability over this period.”

HSS said adjusted earnings before interest, taxes, and amortisation for the second half of the year would now be in the range of £8m to £11m.

Read Sam Dean's full report here

HSS shares


Moody's raises eurozone growth forecast; ECB meeting and Macron troubles key challenges for the currency

Moody's believes that the eurozone will continue its robust growth

The strong economic recovery in Europe underpinning the euro's march towards parity with the pound is set to continue, according to ratings agency Moody's.

It said that the currency bloc will repeat its "above-potential growth performance this year and next". Moody's added that it now expects the region to grow above 0.3 percentage points faster in 2017 and 2018 compared with previous forecasts.

The pound dropped to an eight-year low against the euro yesterday but has rebounded 0.6pc today, rising to €1.0862.

ETX Capital analyst Neil Wilson believes that next week's ECB policy meeting and French president Emmanuel Macron's mounting difficulties are some key challenges for the currency. 

Mr Wilson said this on the relationship between the euro and Mr Macron: 

"The big shift for the euro happened in May after Emmanuel Macron’s victory effectively killed off the existential threat to the single currency that a Le Pen victory might have heralded. With political risk off the table for now it’s been a green light to buy the euro.

"So Thursday’s labour reforms announcement from Mr Macron is a key test of strength. Unions are keeping their cards close to their chests but there is a chance that either the reforms don’t go nearly far enough for markets, or are too harsh and put the president on a collision course with workers."

He added on Moody's forecast today:

"Certainly the outlook for growth in the Eurozone is showing an improving trend while in the US is in reverse as the promise of Trump’s reforms fades.

"PMIs have also painted a picture of improving growth in the Eurozone that indicates it is more resilient than at any time since the financial crisis – conditions that would certainly justify a reduction in ECB stimulus."


Borrowing data reaction: Figures should allay fears of housing market slowdown

Today's jump in mortgage approvals to 68,700 will help allay fears that the slowdown in the housing market isn't accelerating, according to Capital Economics' UK economist Paul Hollingsworth.

He added that the figures show that consumers are confident enough to borrow in order to bridge the gap created by the squeeze on real incomes

Mr Hollingsworth added:

"Admittedly, July’s £1.2bn monthly rise in unsecured consumer credit was lower than the £1.5bn expansion that had been expected, leaving the annual growth rate in single-digit figures (9.8%) for the first time in over a year.

"But given that credit is still rising fairly strongly, it suggests that households are confident enough to borrow in order to maintain spending while real incomes are being squeezed."


Borrowing data reaction: Increased corporate lending could be a sign of firms investing more

Consumer lending fell below 10pc for the first time since April 2016

Pantheon Macro's chief UK economist Samuel Tombs has highlighted the £8.9bn increase in non-financial corporate borrowing as the most eye-catching figure in today's Bank of England release on credit. He said the data could be a sign that firms are looking to up their spending.

This doesn't quite fit with recent data, however, he added:

" This interpretation, however, jars with the recent decline in business confidence and the still subdued levels of surveys of investment intentions.

"It’s more plausible, then, that the surge in corporate borrowing reflects firms fearing higher interest rates and locking in low borrowing costs. Recall that June’s MPC meeting shocked markets by showing that three MPC members voted for higher rates. The risk of a near-term rate hike, however, has receded, suggesting that corporate borrowing will fall back soon."


FTSE 100 update: ITV reverses yesterday's losses; Sainsbury's advances as Co-Op enters talks with Nisa

ITV has pared some of yesterday's losses inspired by worries that the advertising market has run into difficulties

It's probably time to have a quick look at what's helping the FTSE 100 rebound into positive territory today.

Broadcaster ITV has reversed some of the losses made yesterday based on fears that the advertising market is shrinking. The company slumped 4.9pc after German broadcaster ProSiebenSat.1 sent alarm bells ringing in the industry by lowering its growth guidance but ITV has jumped back to the top of the blue-chip index this morning, rising 3.7pc.

Elsewhere, Sainsbury's is following close behind, advancing 2,1pc, after its takeover target Nisa Retail said that it has entered talks with rival the Co-Operative Group instead.

Chris Beauchamp, IG's chief market analyst, said this on today's rebound:

"Thoughts of nuclear apocalypse appear far from everyone’s minds this morning, as markets rebound from yesterday’s lows. Once again US markets put the bears back in their box, rallying in fine style off the lows. It was ‘Turnaround Tuesday’, after all. It is, however, probably too early to celebrate, since indices are already turning lower from the morning highs.

"The Korean situation is not going away, and once August is out of the way thoughts will turn to the upcoming debt ceiling situation in the US. Yesterday’s bounce could easily be a reflex action, without much to carry it forward over the longer-term. As we head into the autumn, equity markets face a series of challenges, not the  least of which are the Fed and ECB’s policy direction. It is unlikely to be a smooth ride to the end of the year."


Dunelm boss John Browett leaves company

John Browett has left Dunelm

The chief executive of homewares retailer Dunelm has left the top job with immediate effect.

In a short announcement to the stock market, Dunelm said veteran retailer John Browett was leaving the company for personal reasons.

The company said “the next phase of growth requires different leadership”, adding that Mr Browett’s “severance terms are still to be finalised”.

Last month Dunelm said its profits would be slightly lower than expected due to sluggish trading over the Easter weekend.

Shares have dropped 3.3pc this morning.

Read Sam Dean's full report here


Mixed bag of lending data drops from the Bank of England

A mixed bag of data has just dropped from the Bank of England. Mortgage approvals in July jumped to 68,700, far ahead of expectations of 65,500, but net consumer lending dipped to £1.2bn when forecast to remain steady at £1.5bn.

The annual growth rate of consumer credit fell to its lowest level since April 2016 at 9.8pc while a large increase in lending to the manufacturing sector pushed up loans to large non-financial businesses to £8.2bn.

There has been a fairly muted reaction on the currency markets to the latest data with the pound edging down against the dollar to $1.2913 and staying steady at €1.0806 against the euro, a 0.5pc rise today.


How will the pound reach parity with the euro?

ECB president Mario Draghi was tight-lipped over monetary policy in his speech at last week's Jackson Hole central banking conference

One would suspect that given that much of the pound's drift lower against the euro recently has been due to exceptionally strong economics data from the eurozone, that at some point the currency bloc's recovery will soften and sterling will claw back some lost ground.

However, Brexit negotiations turning sour and the possibility that monetary policy at the European Central Bank will soon tighten could help the euro's march on sterling.

Could the central bank's president Mario Draghi throw up the monetary policy wild card in next week's ECB meeting and announce plans to taper the central bank's quantitative easing programme?

If he will, he gave no clues in his speech at Jackson Hole last Friday but a strong euro is seen as a hindrance to tapering policy at the central bank.

Here's London Capital Group analyst Ipek Ozkardeskaya's take on the euro's retreat this morning:

"This time, concerns that the euro may be front-running the European Central Bank,  and/or the strong euro could keep the ECB back from announcing a satisfactory quantitative easing  tapering plan could encourage some more profit taking.

"Still, the euro bias is positive and traders will certainly be seeking dip-buying opportunities as the prices pull back." 


Pound rallies from eight-year low against the euro; lending data due at the bottom of the hour

There are fears that the pound will soon reach parity with the euro

With the pound slumping to an eight-year low against the euro yesterday, many are predicting that the two currencies will soon reach parity.

Overnight, sterling has come off yesterday's low of €1.0745 against the euro with slightly softer data coming out of Spain and Germany this morning helping it up to €1.0814, small consolation for those of you jetting off to catch the last of the summer on the continent. 

At the bottom of the hour we have the latest lending data from the Bank of England with mortgage approvals expected to rise slightly to 65,500 and net consumer credit to remain steady at £1.5bn.

Here's a quick preview on today's data from CMC Markets analyst Michael Hewson:

"UK economy for July, against a backdrop of an overextended consumer.  We have seen some anecdotal evidence of a bit of a slowdown in spending patterns, however it’s not been particularly evident in recent data with net lending still expected to be near its highest levels this year, above £5bn.

"Mortgage approvals are also expected to come in at 66k, despite July being a historically slow month in the UK housing market."


Agenda: Risk aversion proves short-lived; FTSE 100 rebounds

North Korea
Investors have quickly resumed normal service after retreating yesterday on North Korea fears

Stock markets in Europe this morning have brushed aside the escalating tension on the Korean Peninsula and pushed back into positive territory. The short-lived bout of risk aversion was ended by equity markets in the US yesterday evening reversing heavy early losses to finish higher.

Reassured by how soon tensions cooled and jittery investors returned to riskier assets the last time North Korea provoked their neighbours and the US, markets have calmed more quickly this time. 

Later today we'll be finding out who has dropped out of the FTSE 100 and been promoted from the mid-cap FTSE 250 with doorstep lender Provident Financial set to slip out of the blue-chip index following its huge 66pc share price slide last week.

The troubled company is back down towards the bottom of the FTSE 100 leaderboard yet again this morning along with precious metal miners Randgold Resources and Fresnillo, which are giving up gains made yesterday as gold advanced on its safe haven appeal.

On the currency markets, the pound has come off the lows it hit against the euro yesterday and is flirting with the €1.08 mark ahead of consumer credit and mortgage approval data due at 9.30am.

Interim results: BATM Advanced Communications, James Fisher & Sons, PureTech Health, The Gym Group, Megafon, Cathay International Holdings, HSS Hire, Vimetco 

AGM: New Trend Lifestyle Group

Trading statement: Diploma

Economics: Nationwide house price index m/m (UK) Mortgage Approvals (UK), Net Lending to Individuals m/m, (UK), M4 Money Supply m/m (UK), BRC shop price index (UK), ADP Non-Farm Employment Change (US), Preliminary GDP Price Index q/q (US), Prelim GDP q/q (US), Import Prices m/m (GER)