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London open: Stocks fall after US tech selloff
London stocks fell in early trade on Friday following a selloff in US tech stocks.
At 0855 GMT, the FTSE 100 was up 0.7% at 7,505.06.
Richard Hunter, Head of Markets at Interactive Investor, said: “Investors remain on high alert after another blustery session which saw stocks oscillate between positive and negative.
“Mixed corporate earnings are not helping to lift sentiment. Although the majority of companies who have reported so far have beaten expectations and may in aggregate post growth of over 20%, the outlook and guidance statements have been less inspiring. The impact of the Omicron variant, such as it is, will not wash through fully until the first quarter earnings of 2022 become available.”
In equity markets, online supermarket Ocado slid after a German court considered that its IP rights may be invalid and halted its case against AutoStore.
Phoenix Group was under the cosh after abrdn sold just under 40m shares in the company at 660p each in placing to institutional investors, raising proceeds of around £264m. Abrdn was in the black.
IG Group slumped after shareholder TCMI sold 15.5m shares in the online trading platform. The shares were placed 780p each, which is a 7.5% discount to the closing share price on Thursday.
Carnival was weaker after the cruise operator said it had seen a “dampening” in cruise bookings for the second half of the year compared to 2019.
Primark owner AB Foods was knocked lower by a downgrade to ‘sell’ at Goldman Sachs.
Cineworld lost ground after its legal battle with Canada’s Cineplex intensified as the latter submitted a new claim over compensation. Cineplex has filed a cross-appeal to Cineworld’s appeal against a court ruling in December ordering the UK-listed chain to pay CAN $1.23bn (£720m).
On the upside, broadcaster ITV was the standout gainer on the FTSE 100 after an upgrade to ‘overweight’ from ‘equalweight’ at Barclays.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Itv Plc | +1.85% | +2.05 | 113.15 |
| 2 |  |
Next Plc | +1.59% | +118.00 | 7,546.00 |
| 3 |  |
Ashtead Group Plc | +1.45% | +76.00 | 5,300.00 |
| 4 |  |
Bt Group Plc | +1.03% | +2.00 | 195.55 |
| 5 |  |
Tesco Plc | +0.87% | +2.60 | 302.60 |
| 6 |  |
Rio Tinto Plc | +0.83% | +46.00 | 5,615.00 |
| 7 |  |
Burberry Group Plc | +0.78% | +14.50 | 1,871.00 |
| 8 |  |
Kingfisher Plc | +0.77% | +2.50 | 326.00 |
| 9 |  |
Persimmon Plc | +0.72% | +17.00 | 2,368.00 |
| 10 |  |
Ferguson Plc | +0.69% | +80.00 | 11,605.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | -5.46% | -75.80 | 1,311.60 |
| 2 |  |
Phoenix Group Holdings Plc | -3.91% | -26.80 | 659.40 |
| 3 |  |
Ocado Group Plc | -3.88% | -60.50 | 1,499.50 |
| 4 |  |
Associated British Foods Plc | -3.17% | -64.00 | 1,954.00 |
| 5 |  |
Barclays Plc | -3.01% | -6.13 | 197.42 |
| 6 |  |
Prudential Plc | -2.73% | -34.50 | 1,230.50 |
| 7 |  |
Scottish Mortgage Investment Trust Plc | -2.58% | -27.00 | 1,018.50 |
| 8 |  |
Fresnillo Plc | -2.42% | -15.40 | 621.00 |
| 9 |  |
Standard Chartered Plc | -2.34% | -12.80 | 533.40 |
| 10 |  |
Hargreaves Lansdown Plc | -1.94% | -26.00 | 1,314.50 |
Europe open: Shares slide again on weak US markets
European shares were on the slide at the open on Friday following a weaker US and Asia markets as geopolitical tensions over Ukraine persisted.
The pan-regional Stoxx 600 index was down 0.83% as investors digested US GDP data overnight and similar figures from France and Sweden, with German growth numbers due later.
French data showed the economy last year expanded at the strongest rate in 52 years at 7%. Sweden beat expectations with growth of 6.4%.
In equity news, shares in Henkel & Co fell 7% as the company said it planned to merge its laundry-and-home-care and beauty-care divisions into one unit and announced a share-buyback program with a total value of up to €1bn.
IG Group slumped after shareholder TCMI sold 15.5m shares in the online trading platform.
Shares in Phoenix Group fell as Abrdn sold just under 40m shares in a placing to institutional investors, raising gross proceeds of around £264m.
Luxury goods maker LVMH gained after its fourth-quarter sales growth accelerated, while rivals Kering and Hermes were also higher on a readacross.
Sweden’s H&M jumped more than 6.3% after the fashion retailer posted a bigger profit rise than expected for the September-November period.
Lighting maker Signify hit the top of the Stoxx with a 9.6% rise after reporting higher quarterly earnings.
US close: Stocks turn weaker by end of trading
Wall Street’s main indices reversed earlier gains to close weaker on Thursday, following the outcome of the Federal Reserve’s two-day policy meeting and a number of data points earlier in the session.
At the close, the Dow Jones Industrial Average was down 0.02% at 34,160.78, as the S&P 500 lost 0.54% to 4,326.51 and the Nasdaq Composite was off 1.4% at 13,352.78.
The Dow closed 7.31 points lower on Thursday, adding to the losses recorded in the previous session as investors digested news that the Federal Reserve was “of a mind” to raise interest rates as soon as March.
The central bank was still in focus on Thursday, after holding its benchmark rate near zero overnight while also strongly indicating that the first hike since late 2018 would come in March.
Fed chairman Jerome Powell shook markets when he said the Federal Reserve had “quite a bit of room” to raise rates before negatively impacting employment.
Traders in the Fed funds futures market were now pricing in five quarter-percentage-point increases in 2022.
On the macro front, new orders for manufactured durable goods decreased 0.9% to $267.6bn in December, according to the Census Bureau, following a revised 3.2% increase in November.
Elsewhere, an advance reading of fourth-quarter gross domestic product growth revealed GDP accelerated at a 6.9% annualised pace in the final three months, according to the Commerce Department, well ahead of the 5.5% estimate.
Still on data, initial jobless claims fell for the first time in four weeks in the seven days ended 22 January, slipping 260,000 from the prior week’s upwardly revised print of 290,000, according to the Labor Department.
The decline, which came after jobless claims hit a three-month high a week earlier, seemingly implies that some of the Covid-19 Omicron variant-related disruptions that had been weighing on the labour market’s recovery may be fading.
Finally, pending home sales fell for a second straight month in December, dropping a far sharper than expected 3.8%, according to the National Association of Realtors.
Economists had anticipated seeing pending home sales fall 0.9% over the festive period.
In the corporate space, fast-food giant McDonald’s closed down 0.44% after it posted quarterly earnings and revenues short of analysts’ expectations, as increased costs weighed on profits.
Comcast was off 0.93% after the cable operator and Sky owner posted earnings that beat expectations, but fell short of meeting new internet subscriber numbers.
On the upside, Mastercard was 1.7% firmer after it exceeded earnings expectations with its fourth-quarter figures as consumer spending continued to rebound throughout the all-important holiday season.
Friday newspaper round-up: Bet365, Greencore, NI hikes
Denise Coates, head of gambling empire Bet365, was Britain’s biggest taxpayer last year, according to the Sunday Times Tax List.The Coates family paid an estimated £481.7m, topping the annual ranking of billionaires’ tax payments for the third consecutive year. While the family’s tax payment was down from £573m in 2020, it was still almost £200m more that paid by hedge fund manager Chris Rokos in second-place with a £300m payment to the exchequer. – Guardian
Investors in Greencore, the sandwich-maker that supplies UK retailers including Marks & Spencer, narrowly failed on Thursday to block plans to pay out hundreds of thousands of pounds in executive bonuses, after outrage at the company’s failure to refund any of the near-£30m it received in government support during the pandemic. At the firm’s annual general meeting, 46% of investors joined a rebellion against the Dublin-based company’s scheme to reward directors with bonus shares. – Guardian
One of the Conservative Party’s most senior backbenchers has joined calls for Rishi Sunak to delay his National Insurance raid, as a string of businesses warned the £13bn tax increase will force them to put up prices. Mel Stride, chairman of the Treasury Select Committee, said “the stars have aligned” to give the Chancellor fiscal breathing space to postpone the hike, which threatens to compound a cost of living crisis faced by millions of households. – Telegraph
The unprecedented £117 million payday for Jupiter Asset Management and two of its star stockpickers for running a listed investment fund was partly due to a higher-than-normal valuation placed on Klarna. Chrysalis Investments used a less conservative methodology to value Klarna than other shareholders in the “buy now, pay later” credit business, estimating that it had rocketed in value from £93.5 million in September 2020 to £387 million in September 2021. – The Times
Businesses have urged Rishi Sunak to delay the rise in national insurance contributions to give them more time to recover from the impact of Covid restrictions. Fifty-nine per cent of 750 businesses surveyed by the British Chambers of Commerce believe that the chancellor and the government did not adequately assess the impact of Plan B measures on companies. – The Times
