ADVFN Morning London Market Report: Thursday 14 October 2021

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London open: Stocks rise as inflation concerns ease


London stocks rose in early trade on Thursday as concerns about inflation eased.

At 0910 BST, the FTSE 100 was up 0.6% at 7,182.12.

Oanda analyst Jeffrey Halley said: “On the inflationary front, markets have breathed a sigh of relief after China bucked the trend and posted slightly lower inflation data today.

“September month-on-month inflation fell to 0.0%, below forecast of 0.30%, while the year-over-year fell to 0.70% from 0.80%. There is a sting in the tail though as September PPI YoY rose to 10.70%, the highest since records began. That suggests that inflationary pressures will persist in the China value chain.”

In equity markets, miners were the standout gainers as metals prices rallied, with AntofagastaAnglo AmericanRio and Glencore all higher.

Discoverie Group gained after saying its first-half performance was ahead of the group’s expectations.

Dunelm was in the black after the homeware retailer reported a rise in first-quarter sales, but cautioned that supply-chain and inflationary pressures made the future outlook uncertain as it maintained full-year guidance.

Hays advanced as the recruiter posted a rise in first-quarter net fees, highlighting good growth in all regions.

On the downside, Qinetiq shares tumbled after the defence technology company warned that technical and supply chain issues on a large complex programme could lead to a one-off write down to its short-term guidance.

Ashmore was also in the red as it posted a 3% drop in first-quarter assets under management.

Elsewhere, Tesco and Close Brothers were both weaker as they traded without entitlement to the dividend.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Anglo American Plc +3.41% +95.00 2,879.00
2 Glencore Plc +2.86% +10.65 382.90
3 Antofagasta Plc +2.03% +29.00 1,461.00
4 Centrica Plc +1.92% +1.12 59.42
5 Whitbread Plc +1.92% +62.00 3,296.00
6 Experian Plc +1.80% +57.00 3,225.00
7 Rio Tinto Plc +1.78% +88.00 5,018.00
8 Ocado Group Plc +1.75% +30.00 1,747.00
9 3i Group Plc +1.71% +22.00 1,309.50
10 Informa Plc +1.68% +9.40 568.80


Top 10 FTSE 100 Fallers

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Top 10 FTSE 100 Fallers

# Name Change Pct Change Cur Price
1 Barratt Developments Plc -0.91% -6.20 676.00
2 Kingfisher Plc -0.88% -2.90 327.50
3 Marks And Spencer Group Plc -0.88% -1.60 181.00
4 Tesco Plc -0.82% -2.20 267.15
5 Direct Line Insurance Group Plc -0.82% -2.30 279.80
6 Admiral Group Plc -0.76% -23.00 2,984.00
7 Berkeley Group Holdings (the) Plc -0.54% -23.00 4,255.00
8 Associated British Foods Plc -0.52% -9.50 1,800.50
9 Rolls-royce Holdings Plc -0.52% -0.74 142.58
10 Dcc Plc -0.36% -22.00 6,072.00


Europe open: Shares gain as investors put aside inflation worries

European stocks opened higher on Thursday as miners led the way and investors put aside worries over inflationary pressures and supply-chain issues.

The pan-European Stoxx 600 index rose 0.66% in early deals.

A debate over the transitory nature of inflation continued as China’s factory gate inflation rose in September to a record high on soaring commodity prices.

China’s September PPI moved to its highest level in more than two decades at 10.7% as CPI came in at 0.7% year on year from 0.80%, while month-on-month inflation fell to 0.0%, below forecasts of 0.30%.

Investors are awaiting US producer prices data later in the day with the reading also expected to show a surge in prices.

In equity news, THG shares rebounded from heavy falls over the last two days, rising to top the Stoxx with a gain of 8.53%. The company, formerly known as The Hut Group this week said it did not know why investors had been dumping the stock.

Miners Glencore and Anglo American were higher on a rise in precious metals prices.

European semiconductor companies ASML and Nordic Semiconductor both rose after Taiwan chip giant TSMC posted a 13.8% jump in third-quarter profit on the back of booming demand for its products amid a global shortage.

UK recruiter Hays shares rose as the company posted a rise in first-quarter net fees on Thursday, highlighting good growth in all regions.

French advertising group Publicis was up after it raised its 2021 outlook as a global shift towards digital media and e-commence helped its third-quarter organic growth exceed market expectations.

Dutch navigation and digital mapping company TomTom fell 4.52% after it warned that supply chain problems could last until the first half of next year.


US close: Dow Jones ends session flat as Q3 earnings season begins

Wall Street stocks turned in a mixed performance on Wednesday as market participants digested major bank earnings and a hotter-than-expected monthly inflation report.

At the close, the Dow Jones Industrial Average was flat at 34,377.81, while the S&P 500 was 0.30% firmer at 4,363.80 and the Nasdaq Composite saw out the session 0.73% higher at 14,571.64.

The Dow closed just 0.53 points lower on Wednesday, narrowly extending losses recorded in the previous session after the International Monetary Fund cut its global growth forecasts.

Wednesday’s primary focus was a report that revealed headline inflation rose at a faster-than-expected pace in the US last month, pushed higher by climbing food and energy prices.

According to the Bureau of Labor Statistics, the consumer price index increased 0.4% in September on a seasonally adjusted basis, after rising 0.3% in August. The annual rate was 5.4% before seasonal adjustments. Both figures were higher than forecast, with economists looking for CPI of 0.3% month-on-month and 5.3% annually.

Bank earnings were also in focus, with JPMorgan kicking things off before the opening bell as it beat on both the top and bottom lines thanks to better-than-expected loan losses, while Blackrock beat quarterly profits as rising asset levels boosted fee income.

Delta Air Lines also reported its latest quarterly figures before the open, with its $1.2bn in profits being overshadowed by a warning on jet fuel prices.

Also in the corporate space, Apple stock closed lower after Bloomberg reported the tech giant was likely to cut iPhone production on the back of global chip shortages.

Elsewhere on the macro front, mortgage applications increased a modest 0.2% in the week ended 8 October, according to the Mortgage Bankers Association, with a 1.5% rise in the purchase index from 275.7 to 279.8 offsetting a 0.5% decline in the refinancing index to 3,023.0 from 3,037.6.

Lastly, minutes from the Federal Open Markets Committee‘s latest meeting revealed the Federal Reserve could begin slowing the pace of its $120.0bn monthly asset purchases as soon as mid-November, with its target date to end all purchases, assuming there are no disruptions, being mid-2022.


Thursday newspaper round-up: Business rates, air fares, house prices

The owner of the UK’s biggest poultry supplier has warned that the cost of chicken is expected to rise by more than 10%, adding that food in Britain is “too cheap.” In a strongly worded intervention, Ranjit Singh Boparan, the owner of Bernard Matthews and 2 Sisters Food Group, called for a “reset” on pricing to reflect the true cost of producing food. “How can it be right that a whole chicken costs less than a pint of beer? You’re looking at a different world where the shopper pays more,” he said on Wednesday. – Guardian

Employers’ groups representing more than a quarter of jobs in Britain have called on Rishi Sunak to cut business rates in the budget later this month to unlock billions of pounds of investment in the economy. In a joint statement ahead of the chancellor’s post-lockdown budget, the Confederation of British Industry (CBI) and 41 other leading trade groups are demanding fundamental changes to the system, which taxes companies based on the premises they occupy. – Guardian

Holidaymakers will face higher ticket prices as a result of EU plans to force airlines to use more biofuel, the industry’s top lobbyist has warned. Willie Walsh, director general of the International Air Transport Association, said new quotas for sustainable aviation fuel will allow suppliers to hike prices – a cost that would be passed on to passengers through increased fares. – Telegraph

Interest rate rises risk bringing house price growth to a shuddering halt and causing turmoil in government finances around the world, reports by the International Monetary Fund and UBS have warned. In its study which covered 25 major cities across the world, UBS found that the risks of a bubble had increased over the past year and that increases to interest rates would rapidly dampen frothy global property markets. – Telegraph

The Bank of England has warned that cryptocurrencies need to be regulated as a “matter of urgency” because of the “plausible” risk of a collapse in the market. Sir Jon Cunliffe, a deputy governor of the Bank, said that the risk of contagion from a potential crash in digital currencies was limited at present, but he added that there were “very good reasons” to fear that this could change soon. – The Times


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