Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
London open: Stocks start weaker amid slew of earnings
Stocks started weaker in London on Wednesday, following another rough and tumble session overnight on Wall Street, as investors sifted through a slew of earnings updates.
At 0829 BST, the FTSE 100 was down 0.51% at 7,348.85, and the FTSE 250 was 0.73% weaker at 20,342.79.
“European markets have opened mixed, as investors attempt to digest the slew of corporate earnings coming out from Europe and the US,” said Interactive Investor head of investment Victoria Scholar.
“Aveva has slumped to the bottom of the UK index, while Lloyds has come out on top with the FTSE 100 back below 7,400 as the next near-term resistance level to watch.
“This follows a very weak session on Wall Street with the Nasdaq closing at its lowest level since December 2020.
“Shares in Tesla slumped 12% amid concerns that Elon Musk could sell some of his stake in the electric vehicle giant to fund his Twitter acquisition.”
On the economic calendar, at 1100 BST the Confederation of British Industry will publish the results of its Distributive Trades survey for the month of April.
In the US, the main economic release will be the advanced report on foreign trade covering the month of March at 1330 BST.
Across the channel, European Central Bank president Christine Lagarde was set to participate at an event at Hamburg Harbour starting from 1130 BST, while investors would also be monitoring surveys on French and German consumer confidence for the months of April and May, respectively.
In equities, retail banking giant Lloyd’s was up around 1% despite reporting a fall in first-quarter pre-tax profits, as higher net income was offset by an underlying impairment charge.
The UK-based bank posted profits of £1.6bn on Wednesday, up from £1.8bn a year earlier, and said the underlying impairment charge of £200.0m reflected a low incurred charge and limited impact from a revised economic outlook, including higher inflation offset by stronger house prices and unemployment.
Communications group WPP was just above the waterline, after it made a “strong start to the year”, with like-for-like revenue guidance being raised from 5% to between 5.5% and 6.5% amid continued investment into growth.
Drax Group was ahead after it said that, after a strong first quarter, it expected 2022 adjusted EBITDA to be around the top end of the current range of analyst expectations.
On the downside, industrial software company Aveva was tumbling after it reported a “strong” close to the financial year just ended, with organic constant currency revenue growth coming in at 18% in the fourth quarter, although it warned of lower revenue growth and margins amid rising costs.
Persimmon was in the red after saying it was currently trading in line with expectations, with demand remaining strong and private average sales rates rising 2% year-on-year.
The housebuilder, which also highlighted its “robust” forward order book of roughly £2.8bn, anticipated full-year completions would be weighted towards the second half, with first half completions being lower than those delivered in 2021.
Elsewhere, Primary Health Properties was weaker after reporting “good progress” in converting its year-end pipeline into committed deals in its first quarter.
London Stock Exchange Group was falling after it reported “strong” financial and operational progress in the first quarter, with total income excluding recoveries up 6.3%.
The FTSE 100 exchange operator said it saw “good growth” across all divisions, with total income rising 6.8% adjusting for the actions taken in response to Russia’s invasion of Ukraine.
Stationery and travel outlet chain WH Smith was slightly weaker, despite swinging to a profit for the half-year as air and rail passengers returned after Covid lockdowns.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bhp Group Limited | +2.82% | +72.50 | 2,646.00 |
| 2 |  |
Lloyds Banking Group Plc | +2.77% | +1.27 | 47.16 |
| 3 |  |
Hsbc Holdings Plc | +2.54% | +12.05 | 485.90 |
| 4 |  |
Fresnillo Plc | +2.51% | +19.40 | 791.80 |
| 5 |  |
Johnson Matthey Plc | +1.82% | +33.00 | 1,844.50 |
| 6 |  |
Antofagasta Plc | +1.40% | +20.50 | 1,489.00 |
| 7 |  |
Rio Tinto Plc | +1.32% | +72.00 | 5,525.00 |
| 8 |  |
Croda International Plc | +1.05% | +78.00 | 7,494.00 |
| 9 |  |
Rentokil Initial Plc | +1.03% | +5.40 | 529.40 |
| 10 |  |
Anglo American Plc | +0.95% | +31.50 | 3,343.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Marks And Spencer Group Plc | -2.40% | -3.40 | 138.30 |
| 2 |  |
Bt Group Plc | -2.24% | -4.10 | 178.90 |
| 3 |  |
Tui Ag | -2.23% | -5.10 | 223.90 |
| 4 |  |
Hikma Pharmaceuticals Plc | -2.14% | -43.00 | 1,962.00 |
| 5 |  |
Admiral Group Plc | -2.11% | -53.00 | 2,461.00 |
| 6 |  |
Ocado Group Plc | -2.02% | -19.20 | 930.80 |
| 7 |  |
Persimmon Plc | -1.93% | -42.00 | 2,138.00 |
| 8 |  |
Vodafone Group Plc | -1.93% | -2.46 | 125.24 |
| 9 |  |
Micro Focus International Plc | -1.79% | -6.80 | 373.30 |
| 10 |  |
Berkeley Group Holdings (the) Plc | -1.65% | -68.00 | 4,056.00 |
Europe open: Shares slip after US rout as Gazprom cuts supplies to Poland, Bulgaria
European stocks opened slightly lower after a rout on US markets overnight and amid worries over gas supplies as Russia’s Gazprom turned off the taps to Poland and Bulgaria.
The pan-European Stoxx 600 index was trading 0.6% lower with all major bourses in the red as investors digested a deluge of corporate results.
US stocks plunged overnight, with investors worrying over a fresh surge in Covid-19 cases in China, high inflation, and the potential threat of nuclear war as a result of Russia’s invasion of Ukraine.
Gazprom announced it was halting gas supplies to Bulgaria and Poland for failing to pay for gas in roubles as Moscow hit back against Western Sanctions over its unprovoked invasion of Ukraine.
”Energy is being increasingly weaponised as the war in Ukraine looks set to enter the long haul and expectations grow that a crude oil embargo will end up being slapped on Russia by the EU,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“Sanctions isolating from Russia from the global financial systems have prompted this strategy to drive a ruble rebound, after the currency went into freefall following the invasion, and it’s been working helped by the initial 20% interest rate hike and currency controls.”
“The expectation of another supply squeeze on global markets, if more consumers turn their back on Russian oil has pushed up Brent crude above $106 dollars a barrel.”
In equity news, shares in industrial software company Aveva slumped 13% as the company said a revenue hit from sanctions on Russia would hit its operating profit this year.
Deutsche Bank fell 6% after warning that the Russia-Ukraine conflict could hurt full-year results.
US close: Dow Jones ends session more than 800 points lower
Wall Street stocks closed sharply lower on Tuesday as investors digested quarterly earnings from a number of big-name firms and a series of data points.
At the close, the Dow Jones Industrial Average was down 2.38% at 33,240.18, while the S&P 500 was 2.81% softer at 4,175.20 and the Nasdaq Composite saw out the session 3.95% weaker at 12,490.74.
The Dow closed 809.28 points lower on Tuesday, easily reversing gains recorded in the previous session.
Fears regarding the global economy weighed on sentiment throughout the session, as did a fresh surge in Covid-19 cases in China, high inflation, and the potential threat of nuclear war as a result of Russia’s invasion of Ukraine.
In the corporate space, Twitter chief executive Parag Agrawal has told employees that the social media giant faces an uncertain future after it agreed to be acquired by billionaire Tesla CEO Elon Musk in a deal worth $44.0bn. He was initially offered a seat on the board but instead made a bid for the entire company, which Twitter’s board accepted on Monday. The cash offer of $54.20 per share is a 38% premium to the closing price on 1 April, the last trading day before Musk acquired his 9% stake.
In terms of earnings, General Electric posted a first-quarter earnings and revenue beat ahead of the opening bell but warned FY earnings would be towards the lower end of previous guidance, while PepsiCo also reported quarterly earnings and revenue that topped expectations as consumers paid more for Doritos, Quaker oatmeal and Gatorade products.
UPS also beat earnings estimates with EPS of $3.05 on $24.4bn in sales, while 3M posted better-than-expected first-quarter earnings on a net income of $1.29bn, down from $1.62bn in the year-earlier period, and Raytheon Technologies revealed it was on track for a fourth-straight loss, after the aerospace and defence company provided mixed guidance as it missed on Q1 revenues despite beating on profits
After the bell, Alphabet reported weak earnings and revenue on a big miss at YouTube, while Microsoft posted earnings that beat across the board.
On the macro front, new orders for manufactured durable goods increased 0.8% month-on-month across the US in March, according to the Census Bureau, bouncing back from a downwardly revised 1.7% drop in February but below market expectations of a 1% gain. Excluding transportation, new orders rose 1.1%, ahead of a 0.5% drop in February, and excluding defence, new orders advanced 1.2%, a marked improvement on the prior month’s 2.1% fall.
Elsewhere, the US housing index increased to 381.40 points in February, up from 373.70 points in January, according to the Federal Housing Finance Agency.
Still on housing data, new home sales in the US fell 2% month-on-month to a seasonally adjusted annual rate of 772,000 in February, according to the Census Bureau, following a revised 8.4% drop in the previous month and below market expectations for a print of 810,000.
Finally, the University of Michigan‘s consumer sentiment unexpectedly jumped to 65.7 in April, up from an eleven-year low of 59.4 in March, according to preliminary estimates. Figures also beat market forecasts of 59, with the expectations index surging by 18% to 64.1.
Wednesday newspaper round-up: Covid loan fraud, Brexit costs, tax rises, Tesla, TalkTV
Suitcases filled with cash from taxpayer-backed Covid loans were seized at the border as people tried to smuggle them out of the country, a Times investigation reveals today. Border force officials have stopped people at airports across Britain “carrying large amounts of money suspected from coronavirus bounce-back loans”, a Home Office source said. – The Times
Brexit has pushed up the price of food imported from the EU, compounding Britain’s unfolding cost of living crisis, according to a report. The thinktank UK in a Changing Europe (UKICE) said trade barriers introduced after leaving the EU had led to a 6% increase in UK food prices between December 2019 and September 2021, adding to the rising financial pressure for households. – Guardian
Rishi Sunak was urged to cut tax during a Cabinet meeting about tackling the cost of living crisis, after official figures revealed record-high tax receipts for the Treasury. While colleagues suggested reducing the cost of childcare and scrapping MOTs to help ease the pain of rising bills and prices, Kit Malthouse, the policing minister, argued that reducing the tax burden would be the best way to help struggling families. – Telegraph
Investors in Tesla yesterday showed their disapproval of Elon Musk’s plans to take control of Twitter, sending the shares sharply lower. The electric carmaker’s stock market valuation dropped below $1 trillion amid scrutiny of how its chief executive and largest shareholder intends to finance his $44 billion purchase. – The Times
Britain’s economy will suffer an £8bn hit this year from a reduction in the size of the workforce caused by a pandemic-induced rise in ill-health, research from a thinktank has shown. A report from the Institute for Public Policy Research said a combination of long Covid, NHS disruption and an increase in mental illness meant 400,000 workers had gone “missing” since the global health crisis began. – Guardian
Liz Truss will call for an increase in defence spending on Wednesday, saying the West has overseen a “generation of underinvestment” which led to the invasion of Ukraine. In what is billed by aides as a major foreign policy speech, the Foreign Secretary will say that the traditional Nato target of spending two per cent of GDP on defence should be a minimum. – Telegraph
At least £100 million of taxpayer-backed Covid loans went to companies formed after the start of the pandemic, raising questions about whether the money went to businesses it was designed to help. The cash was intended to support existing firms hit by the fallout from the pandemic but a loophole meant new companies, which the policy was not targeted at, were also able to benefit. – The Times
A P&O Ferries passenger ship which operates between Scotland and Northern Ireland was stranded in the Irish Sea for two hours on Tuesday, after a mechanical failure. The European Causeway, which sails between Cairnryan and Larne, lost power before arriving at the Northern Irish port. – Guardian
Rupert Murdoch’s TalkTV beat the BBC, Sky News and GB News with its flagship show at launch, as hundreds of thousands tuned in for Piers Morgan’s interview with Donald Trump. Piers Morgan Uncensored raced ahead of rivals with an average viewership of 316,800, which peaked at 400,000, as the combative presenter made his debut in the 8pm slot. – Telegraph
Google fell short of Wall Street’s expectations last night as concern over a global economic slowdown piled further pressure on advertising budgets. Shares in Alphabet, its parent company, fell after it posted a steeper drop in profits than analysts had forecast after a bumper run in recent years. – The Times
More than 200,000 private renters in England have been served eviction notices without doing anything wrong in the three years since the government first promised to ban the practice, housing campaigners have claimed. Every seven minutes, a tenant has been landed with a no-fault eviction notice since Theresa May’s Conservative government first committed to scrap them in April 2019, according to research by Shelter, the housing charity. – Guardian
The average battery-powered car can now travel almost 260 miles on a single charge after an “electric decade” in which ranges have trebled and the number of available vehicles has surged almost 15-fold. An electric car in the UK has an average battery range of 257 miles compared with 74 miles in 2011, according to industry trade body the Society of Motor Manufacturers and Traders (SMMT). – Telegraph
