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London open: Stocks flat ahead of services data
London stocks were little changed in early trade on Tuesday as investors eyed the latest reading on the UK services sector and any developments in the Ukraine conflict.
At 0900 BST, the FTSE 100 was flat at 7,557.49, with the EU set to impose fresh sanctions against Russia following reported atrocities in Bucha, just outside Kyiv.
Richard Hunter, head of markets at Interactive Investor, said: “Investors remain cautious on growth prospects, as the West considers tightening its stranglehold on the Russian economy.
“The latest bout of public outrage has strengthened the resolve of Western leaders to take further action. Even Germany, which has a high reliance on the import of Russian gas, is looking to refrain from further imports. Meanwhile, as countries consider actions to offset the loss of energy supplies, prices remain well supported, such as an oil price which has popped again and has now risen by 41% so far this year.
“The vestiges of the conflict remain unknown, even after the aggression has subsided. In the meantime, the war has already shown signs of threatening economic growth, while from an investor perspective sentiment remains fragile given the volume of news emanating from the region. Alongside the pre-existing issues of inflation and rising interest rates, some repositioning is increasing the attraction of defensive stocks.”
On the home front, the S&P Global/CIPS services PMI for March is due at 0930 BST.
In equity markets, Prudential was trading higher after an upgrade to ‘neutral’ from at Exane, while cruise operator Carnival rallied after it reported the best ever week for bookings in the company’s history.
Moonpig gained as it upgraded its revenue outlook for the current financial year after sales were boosted by consumer behaviour during the Omicron strain of Covid-19.
Home repairs service Homeserve was also up after it said it had traded in line with expectations during its fiscal year with steady policy retention rates in the UK and US.
On the downside, M&G was knocked lower by a downgrade to ‘underperform’ at Exane.
Cybersecurity firm Darktrace was under the cosh as JPMorgan Cazenove initiated coverage of the shares at ‘underweight’, saying the path to sustainable profitable growth was unclear.
Moneysupermarket was also in the red after a downgrade to ‘equalweight’ from ‘overweight’ at Barclays.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | +3.73% | +50.00 | 1,391.50 |
| 2 |  |
Croda International Plc | +2.60% | +202.00 | 7,968.00 |
| 3 |  |
Mondi Plc | +1.62% | +24.50 | 1,534.50 |
| 4 |  |
Micro Focus International Plc | +1.60% | +6.50 | 412.30 |
| 5 |  |
Prudential Plc | +1.28% | +14.50 | 1,144.00 |
| 6 |  |
Rightmove Plc | +1.22% | +8.00 | 665.00 |
| 7 |  |
Sse Plc | +1.15% | +20.00 | 1,756.00 |
| 8 |  |
Barclays Plc | +1.15% | +1.68 | 147.98 |
| 9 |  |
St. James’s Place Plc | +1.11% | +16.00 | 1,460.00 |
| 10 |  |
Halma Plc | +1.10% | +28.00 | 2,573.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Glencore Plc | -1.96% | -9.90 | 495.10 |
| 2 |  |
Anglo American Plc | -1.55% | -63.00 | 3,997.00 |
| 3 |  |
Taylor Wimpey Plc | -1.52% | -2.05 | 132.75 |
| 4 |  |
Tesco Plc | -1.45% | -4.00 | 271.90 |
| 5 |  |
Kingfisher Plc | -1.38% | -3.60 | 256.60 |
| 6 |  |
Vodafone Group Plc | -1.33% | -1.68 | 124.32 |
| 7 |  |
Ashtead Group Plc | -1.28% | -62.00 | 4,769.00 |
| 8 |  |
Rio Tinto Plc | -1.21% | -74.00 | 6,058.00 |
| 9 |  |
Melrose Industries Plc | -1.18% | -1.50 | 125.70 |
| 10 |  |
Antofagasta Plc | -1.18% | -20.00 | 1,679.00 |
Europe open: Shares muted as West mulls more Russia sanctions
European shares made a muted start to Tuesday with oil prices up as Western leaders began to speak more firmly of an energy embargo on Russia after evidence emerged of war crimes in Ukraine.
The pan-European Stoxx 600 barely moved the needle in early deals, with most regional bourses slipping into the red as traders searched for direction.
Horrific images from the liberated northern Ukraine town of Bucha showing dead civilians in the street appeared to galvanise sentiment, with the European Union set to impose a new round of sanctions against Russia, according to French European Affairs Minister Clement Beaune.
US President Joe Biden was reportedly also set to introduce new measures against Moscow in response to the killings.
“The latest bout of public outrage has strengthened the resolve of Western leaders to take further action. Even Germany, which has a high reliance on the import of Russian gas, is looking to refrain from further imports,” said Interactive Investor head of markets Richard Hunter.
“Meanwhile, as countries consider actions to offset the loss of energy supplies, prices remain well supported, such as an oil price which has popped again and has now risen by 41% so far this year.”
Oil prices were around 1% higher to keep them over the $100 mark.
In equity news, shares in Vestas Wind Systems rose as the company unveiled a new 7.2-MW turbine model for low-to-medium wind conditions.
Siemens Gamesa Renewable Energy was also higher as green energy-related stocks gained favour against fears of a supply disruption from the Ukraine war.
US close: Stocks close higher despite yield curve inversion
Wall Street stocks turned in a positive performance on Monday as Treasury yields remained inverted.
At the close, the Dow Jones Industrial Average was up 0.30% at 34,921.88, while the S&P 500 was 0.81% stronger at 4,582.64 and the Nasdaq Composite saw out the session 1.90% firmer at 14,532.55.
The Dow closed 103.61 points higher on Monday, extending gains recorded on Friday as investors thumbed over March’s all-important nonfarm payrolls report.
Bond yields were again in focus on Monday after an often-cited recession indicator was triggered on Thursday when the two-year and 10-year Treasury yields inverted for the first time since 2019, while the five-year note yield also traded above its 30-year counterpart.
The latest developments in the Ukraine-Russia conflict were also drawing an amount of investor attention throughout the day after German Chancellor Olaf Scholz said Western nations would impose additional sanctions on Moscow in a matter of days.
In the corporate space, Twitter shares surged after news broke that Tesla CEO Elon Musk had taken a 9% stake in the social media giant, while Tesla’s stock also rose on the back of its latest quarterly electric vehicle delivery figures.
Going the other way, Starbucks shares slipped after the coffee chain pulled its share repurchase programme.
On the macro front, factory orders declined 0.5% month-on-month to $542.0bn in February for the first decline since April 2021 as supply constraints and shortages of materials continued to weigh. Orders for durable goods went down 2.1%, principally due to transportation equipment, while other decreases were also seen in orders for machinery and computers and electronic products. Going the other way, orders for nondurable goods were up 1.2%.
Tuesday newspaper round-up: Morrisons, gambling ads, airlines
Morrisons has warned its profits are likely to take a significant hit this year as the cost of living crisis and disruption due to the war in Ukraine weigh on the grocery market. The UK’s fourth largest supermarket chain said “developments in the geopolitical environment” and “ongoing and increasing inflationary pressure” since the beginning of February were hitting consumer sentiment and spending. – Guardian
Gambling and betting companies will be banned from using advertising featuring top-flight footballers and other sports personalities, as well as reality TV and social media stars, under new rules designed to protect under-18s and other vulnerable groups. The changes, set out by the body responsible for the UK code for advertising, will mean that past betting and gambling marketing that features stars and celebrities such as Cristiano Ronaldo, José Mourinho, Michael Owen and Harry Redknapp, would not be allowed in the UK. – Guardian
Airline chiefs have sought to blame the Government for widespread disruption to Easter travel as passengers faced cancelled flights and massive queues at airport security amid a severe shortage of staff. Customers were stuck in hours-long queues as airports were unable to open all of their security gates on Monday, with over 120 flights cancelled and hundreds more expected to be called off in the coming days. – Telegraph
Britain is not set for a repeat of the 1970s and war in Ukraine could lead to lower inflation than previously expected, a senior Bank of England official said. Sir Jon Cunliffe, deputy governor for financial stability, said there was a risk the conflict could lead to inflation undershooting the 2 per cent target. – The Times
MPs on a leading Commons committee have accused the prime minister of saying he would conduct a national security inquiry into the Chinese takeover of a semiconductor factory – then doing nothing about it. Tom Tugendhat, the Conservative chairman of the foreign affairs select committee, has demanded that Boris Johnson answers questions on Newport Wafer Fab, the UK’s largest microchip wafer fabricator, which last summer agreed a £63 million takeover by Nexperia, a Chinese technology subsidiary. – The Times
