London midday: Stocks decline amid 'lack of trading direction'

LONDON (ShareCast) - (ShareCast News) - UK stocks declined as investors tried to get their head around uncertainty on US interest rates, China concerns and a slump in the auto-sector. "The lack of a consistent trading direction is likely a product of a market cocktail containing a dash of post-Fed statement confusion, a shot of lingering China-fear, and a sprinkling auto-sector sickness, a brew that leaves few economic anchors for investors to cling to," said Connor Campbell, financial analyst at Spreadex.

The market will be looking for some clarity on interest rates when Federal Reserve Chair Janet Yellen speaks in Massachusetts at a lecture after the markets close.

However, she has remained vague on the timing of the first rate hike in almost a decade, saying the Fed would be taking into account a wide economic data in its decision.

A batch of US data due in afternoon trade will therefore be in focus. A Commerce Department report at 1330 BST on US durable goods orders is forecast to show a 2.3% drop in August, compared to a 2.2% increase a month earlier.

Separately, the Commerce Department's new home sales data at 1500 BST is expected reveal a 1.6% rise in August after a 5.4% gain a month earlier.

Initial jobless claims are projected to increase 275,000 in the week to 19 September, according to analysts' estimates ahead of the Labor Department's figures at 1330 BST.

Craig Erlam, senior market analyst at Oanda, said the Fed has left the market "more confused than ever" on when it will raise rates.

"It (Other OTC: ITGL - news) 's as though a straitjacket has been applied to the markets," he said "We're seeing the occasional struggle but ultimately the energy that was helping sustain markets at the elevated levels earlier this year is being drained. With so many markets in correction territory now I'm sure we'll soon break free from this and I think that would have happened last week had the Fed hiked rates." Meanwhile in the Eurozone, GfK (Swiss: GFK.SW - news) 's forward-looking index on German consumer confidence fell to 9.6 in October from 9.9 a month earlier, missing forecasts of 9.8.

The IFO's business confidence index, however, rose to 108.5 from 108.3, beating estimates of 107.9.

Closer to home, a British Bankers' Association revealed UK net mortgage lending hit a five-year high in August. Loans for house purchases came in at 46,473 in August, up from 46,315 in July and 40,454 a year ago.

In company news, Poundland plunged after making an application to place new shares on the market and raise approximate £50m ahead of its acquisition of 99p Stores.

Smiths Group (Other OTC: SMGKF - news) was on the back foot as CEO Philip Bowman prepared to step down after announcing the full-year results.

Thomas Cook (Xetra: A0MR3W - news) gained the travel company said it was on track to meet full-year profit targets. The group said it had seen a "significant increase" in the number of people travelling to Greece and Egypt, which boosted shares in other travel firms higher including TUI (LSE: TUI.L - news) and Easyjet (Other OTC: EJTTF - news) .

Lloyds Banking Group (Other OTC: LLOBF - news) jumped after a report from The Telegraph aid Alex Wright, a fund manager at Fidelity, expected the lender become a dividend giant within two years.

Next (Other OTC: NXGPF - news) advanced after Nomura upgraded the retailer to 'buy' from 'neutral' and lifted the price target to 8,000p from 7,600p.

Market Movers techMARK 3,009.59 -0.43% FTSE 100 5,996.19 -0.60% FTSE 250 16,600.92 -0.35% FTSE 100 - Risers Lloyds Banking Group (LLOY) 74.13p +1.62% Relx plc (LSE: REL.L - news) (REL) 1,086.00p +1.50% Whitbread (WTB) 4,640.00p +0.91% Imperial Tobacco Group (IMT) 3,430.00p +0.91% Intu Properties (Other OTC: CCRGF - news) (INTU (Swiss: OXIGTU.SW - news) ) 319.00p +0.89% Severn Trent (Other OTC: STRNY - news) (SVT) 2,109.00p +0.86% Next (EUREX: NXTI.EX - news) (NXT) 7,555.00p +0.80% National Grid (LSE: NG.L - news) (NG.) 868.00p +0.70% United Utilities Group (UU.) 895.50p +0.67% Associated British Foods (LSE: ABF.L - news) (ABF) 3,161.00p +0.67% FTSE 100 - Fallers Glencore (Amsterdam: GX8.AS - news) (GLEN) 102.15p -6.37% Smiths Group (SMIN) 999.50p -3.80% Old Mutual (Other OTC: ODMTY - news) (OML) 185.10p -3.69% Rolls-Royce Holdings (RR.) 657.00p -3.31% Anglo American (LSE: AAL.L - news) (AAL) 639.80p -2.78% Aberdeen Asset Management (Other OTC: ABDNF - news) (ADN) 306.10p -2.08% International Consolidated Airlines Group SA (CDI) (IAG) 582.50p -1.94% CRH (CRH (EUREX: 558474.EX - news) ) 1,798.00p -1.91% Antofagasta (LSE: ANTO.L - news) (ANTO) 515.00p -1.81% Carnival (CCL) 3,409.00p -1.67% FTSE 250 - Risers Synergy Health (Other OTC: SYHEF - news) (SYR) 1,615.00p +3.19% Mitchells & Butlers (LSE: MAB.L - news) (MAB) 342.90p +2.97% Tate & Lyle (LSE: TATE.L - news) (TATE) 567.50p +2.90% AO World (Other OTC: AOWDF - news) (AO.) 160.80p +2.62% Enterprise Inns (LSE: ETI.L - news) (ETI) 113.30p +2.53% Cranswick (CWK) 1,645.00p +2.36% Shawbrook Group (LSE: SHAW.L - news) (SHAW) 329.70p +2.14% Zoopla Property Group (WI) (ZPLA) 208.90p +2.00% Mitie Group (Other OTC: MITFF - news) (MTO) 283.60p +1.98% Jimmy Choo (LSE: CHOO.L - news) (CHOO) 138.90p +1.68% FTSE 250 - Fallers Petra Diamonds Ltd (LSE: PDL.L - news) .(DI (KSE: 003160.KS - news) ) (PDL) 91.00p -8.08% Poundland Group (Other OTC: PDLDF - news) (PLND) 286.10p -7.59% Allied Minds (Other OTC: ALLWF - news) (ALM) 410.00p -7.03% Euromoney Institutional Investor (ERM) 1,001.00p -5.92% Drax Group (LSE: DRX.L - news) (DRX) 244.70p -5.63% Tullow Oil (LSE: TLW.L - news) (TLW) 171.10p -4.79% Premier Oil (LSE: PMO.L - news) (PMO) 64.60p -4.30% Morgan Advanced Materials (Other OTC: MCRUF - news) (MGAM) 284.20p -3.76% UBM (UBM (LSE: UBM.L - news) ) 482.60p -3.31% Clarkson (CKN) 1,965.00p -3.20% FTSE TechMARK - Risers RM (RM (LSE: RM.L - news) .) 175.00p +2.94% Ricardo (RCDO) 914.00p +1.33% NCC Group (LSE: NCC.L - news) (NCC (BSE: NCC6.BO - news) ) 268.00p +0.37% SDL (SDL (LSE: SDL.L - news) ) 335.50p +0.30% Skyepharma (SKP) 348.00p +0.14% Sepura (SEPU) 174.75p +0.14% IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 202.45 +0.05% FTSE TechMARK - Fallers Sarossa (SARS) 1.77p -6.10% Oxford Instruments (Other OTC: OXGGY - news) (OXIG) 550.00p -2.65% Triad Group (Stuttgart: TD8.SG - news) (TRD) 34.75p -2.11% Spirent Communications (Other OTC: SPMYY - news) (SPT (Taiwan OTC: 8431.TWO - news) ) 76.00p -1.94% Dialight (DIA (Amsterdam: DI6.AS - news) ) 615.00p -0.89% Innovation Group (Other OTC: INVGF - news) (TIG) 39.50p -0.63% Gresham Computing (LSE: GHT.L - news) (GHT) 110.50p -0.45% Oxford Biomedica (LSE: OXB.L - news) (OXB) 8.89p -0.11% E2V Technologies (LSE: E2V.L - news) (E2V) 230.00p -0.11%