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London open: Stocks nudge up as oil prices slip back
London stocks nudged higher in early trade on Thursday as oil prices eased back and as investors digested the latest UK GDP reading.
At 0910 BST, the FTSE 100 was up 0.2% at 7,590.28.
Neil Wilson, chief market analyst at Markets.com, said: “European stock markets are a bit higher again today as oil prices slide back. Crude slipped lower, with WTI taking a $100 handle for a time, as the White House indicated it would release as much as 180m barrels from its Strategic Petroleum Reserve. It would be the largest ever release, the third in six months, and amount to almost two days of global oil demand.
“This is large enough to make a dent, but releases never alter longer-term imbalances.”
Later in the day, OPEC is expected to confirm sticking to 400,000 bpd monthly increases in output.
On the home front, data released earlier by the Office for National Statistics showed the economy grew at a faster pace than initially estimated in the fourth quarter of last year.
GDP rose by 1.3% compared to the previous quarter, up from an initial estimate of 1% growth and from revised 0.9% growth in the third quarter. That left the economy just 0.1% below where it was before the pandemic.
The largest contributors to the increase were human health and social work activities, driven by increased GP visits at the start of the quarter, and a large jump in Covid testing and tracing activities, as well as the extension of the vaccination programme.
Annual GDP growth was revised a touch for both 2020 and 2021. It is now estimated to have increased by 7.4% in 2021 versus 7.5% previously, following a revised 9.3% decline in 2020, versus 9.4% previously.
Meanwhile, consumer spending growth was revised down to 0.5% quarter-on-quarter from 1.2%.
Paul Dales, chief UK economist at Capital Economics, said the upward revision to GDP growth in Q4 may not be as encouraging as it looks as a lot of it appears to be due to inventories while consumer spending was revised down.
“The latter suggests the squeeze on real incomes is starting to bite, although the fall in the saving rate is providing a cushion,” he said.
In equity markets, Halma was the top gainer on the FTSE 100 after an upgrade to ‘hold’ at HSBC.
Brewin Dolphin rocketed to the top of the FTSE 250 after the wealth manager agreed to be bought by Royal Bank of Canada in a £1.6bn deal.
Provident Financial rose after it reinstated its dividend as the subprime lender returned to profit after bad-debt provisions fell.
Trainline surged after it agreed to reduce the commission it receives for selling train tickets as part of a review by the rail industry.
On the downside, Vodafone was knocked lower by a downgrade to ‘underperform’ at Exane, while Taylor Wimpey, Phoenix Group, Moneysupermarket and ContourGlobal were all lower as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Halma Plc | +2.41% | +60.00 | 2,549.00 |
| 2 |  |
Sage Group Plc | +1.89% | +13.20 | 712.80 |
| 3 |  |
Ferguson Plc | +1.59% | +165.00 | 10,560.00 |
| 4 |  |
Easyjet Plc | +1.56% | +8.60 | 559.00 |
| 5 |  |
Spirax-sarco Engineering Plc | +1.52% | +190.00 | 12,665.00 |
| 6 |  |
Whitbread Plc | +1.49% | +43.00 | 2,922.00 |
| 7 |  |
3i Group Plc | +1.41% | +19.50 | 1,400.50 |
| 8 |  |
Pearson Plc | +1.38% | +10.20 | 749.40 |
| 9 |  |
Ashtead Group Plc | +1.32% | +64.00 | 4,909.00 |
| 10 |  |
Standard Chartered Plc | +1.10% | +5.60 | 515.60 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | -3.12% | -4.04 | 125.38 |
| 2 |  |
Phoenix Group Holdings Plc | -2.78% | -17.60 | 616.60 |
| 3 |  |
Taylor Wimpey Plc | -2.67% | -3.60 | 131.30 |
| 4 |  |
Next Plc | -2.55% | -160.00 | 6,114.00 |
| 5 |  |
Sainsbury (j) Plc | -1.49% | -3.90 | 257.40 |
| 6 |  |
Associated British Foods Plc | -1.44% | -25.00 | 1,705.50 |
| 7 |  |
Bp Plc | -1.36% | -5.20 | 377.55 |
| 8 |  |
Berkeley Group Holdings (the) Plc | -1.20% | -46.00 | 3,802.00 |
| 9 |  |
Micro Focus International Plc | -1.09% | -4.60 | 415.90 |
| 10 |  |
Bt Group Plc | -0.99% | -1.85 | 185.45 |
Europe open: Shares edge ahead as crude drops on US reserve release plan
European shares crept ahead at the open on Thursday as airlines gained and oil producers fell on reports the US was set to release strategic crude reserves.
The pan-European Stoxx 600 index rose 0.2%. The UK’s energy-heavy FTSE 100 index was up 0.1%, after official data showed Britain’s economy grew more quickly than previously thought in the fourth quarter.
Oil prices fell as traders waited for an expected big release of reserves by President Joe Biden designed to stem inflation in the US economy.
Biden is close to announcing the third – and possibly biggest – release of emergency oil stocks since November, according to reports. The release is expected to last several months and comprise up to 1m barrels of oil per day, the Financial Times said.
Shares in East European budget airline Wizz Air gained on the news, along with rival Ryanair.
Sir Martin Sorrell-owned S4 Capital rebounded 6% from Wednesday’s share price plunge after auditor PwC said it was unable to complete “the work necessary” to sign off on full year results that were due out yesterday.
Sweden’s H&M slumped 8% after reporting a smaller-than-expected profit for its first quarter.
US close: Dow, S&P break four-session winning streak
Wall Street stocks closed lower on Wednesday, with the Dow and the S&P snapping a four-day winning streak, as traders monitored developments in Ukraine after an inverted yield curve sparked recession fears a day earlier.
At the close, the Dow Jones Industrial Average was down 0.19% at 35,228.81, as the S&P 500 lost 0.63% to 4,602.45 and the Nasdaq Composite was off 1.21% to 14,442.27.
The Dow closed 65.38 points lower on Wednesday, biting into gains recorded in the previous session following the release of some key economic data and word of some potential progress in talks between Russia and Ukraine.
Progress in ceasefire talks between the two nations were again in focus at the open on Wednesday, with Russia stating late on Tuesday that it would lower its military presence in certain parts of Ukraine.
However, several countries, including the US and the UK, remained sceptical about the promise as Moscow continued to attack certain parts of Ukraine on Wednesday.
Market participants were also firmly fixed on the bond market after the US five-year and 30-year Treasury yields inverted on Monday – a historical sign of a coming recession.
The closely-watched two-year and 10-year yield spread came close to inverting earlier in the session, but managed to stay positive before climbing back to about seven basis points on Wednesday.
On the macro front, mortgage applications declined 6.8% to 425.1 in the week ended 25 March, according to the Mortgage Bankers Association – the lowest level seen since December 2019 as mortgage rates surged to their highest level in eleven years.
Applications to refinance a home loan tumbled 14.9% to the lowest since May 2019, while those to purchase a home edged up just 0.6%.
Elsewhere, the US economy rounded out 2021 by expanding at a healthy 6.9% annual clip between October and December, according to the Bureau of Economic Analysis, a slight downgrade from the government’s previous estimate of 7%.
For the year as a whole, US gross domestic product, its total output of goods and services, jumped 5.7% for the fastest calendar-year growth seen since 1984’s 7.2% surge in the wake of a recession.
The small downgrade from the Commerce Department’s original estimate came as a result of a smaller-than-expected increase in consumer spending and fewer exports.
Finally, private sector employment in the US rose a touch more than expected in March, according to the latest data from ADP.
Employment increased by 455,000 from February, versus expectations for a 450,000 jump.
The total number of jobs added in February, meanwhile, was revised from 475,000 to 486,000.
In equities, tight-fitting athleisure maker Lululemon Athletica jumped 9.58% after the company reported over $6bn in sales for 2021, and laid down expectations for sales of $7.5bn in 2022.
Adagio Therapeutics rocketed 30.39% after it confirmed meeting primary endpoints in ongoing phase 2 and 3 trials for its Covid-19 treatment candidate.
Crypto and meme stocks hogged the headlines on the downside, with AMC Entertainment down 12.77% and GameStop 7.25% weaker despite heavier trading volumes for Reddit’s favourite bets in recent days.
Bitcoin miner Stronghold Digital tumbled 32%, meanwhile, after missing expectations for fourth quarter revenue and warning shareholders of a gloomier outlook for 2022.
Thursday newspaper round-up: Ghost flights, Essar Oil, mortgages
Almost 500 “ghost flights” a month departed from the UK between October and December 2021, data has revealed. The information, obtained through a freedom of information request by the Guardian, shows Heathrow, Aberdeen, Manchester, Stansted and Norwich were the top five airports for such flights during the period. – Guardian
Auditors have warned about the financial health of the company behind the Stanlow oil refinery, despite its efforts to refinance loans and settle a debt to HM Revenue and Customs. Documents filed at Companies House show that losses at Essar Oil (UK) deepened from $221m (£168m) to $321m in 2021, a year in which government officials became concerned about the financial position of the company, which supplies 16% of UK road fuel from its refinery in Ellesmere Port, Cheshire. – Guardian
Hundreds of thousands of households risk paying an extra £1,700 a year on their mortgages as a wave of cheap fixed-rate deals struck five years ago end. Analysts are bracing for a rush of remortgaging as homeowners try to beat interest rate rises and loans taken out in 2018 come up for renewal. However, those remortgaging will face a jump in monthly repayments as markets brace for the Bank of England to raise rates to more than 2pc in a bid to curb inflation. – Telegraph
Ministers are rowing back from a radical plan to encourage pension funds to invest in unlisted assets after getting a mixed response from the investment industry and an emphatic thumbs-down from consumer groups. A plan to relax the ceiling on charges paid by pension funds so that private equity houses could take 20 per cent of any profits made from a pension fund’s unlisted investments came under particular fire. – The Times
The fall of a former star fund manager who used a Greensill private jet for a personal trip to Sardinia should sound a “clear warning” to the City, the financial regulator has said. The Financial Conduct Authority yesterday set out the full detail of its decision late last year to fine the British subsidiary of Gam Holding, the Swiss asset manager, £9.1 million and Tim Haywood, who was sacked from the group in 2019 for “gross misconduct”, £230,000 for conflict of interest failings linked to Greensill. The supply chain finance company collapsed in March last year and has become embroiled in a lobbying scandal. – The Times
