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London open: Stocks firmer amid a buffet of earnings
London stocks were in the green on Thursday morning amid a smorgasbord of earnings reports, after a mixed session on Wall Street overnight and as concerns over gas supplies in eastern Europe lingered.
At 0902 BST, the FTSE 100 was up 0.87% at 7,490.19, and the FTSE 250 was ahead 0.93% at 20,627.90.
“After a choppy session yesterday, markets in Europe managed to finish the session in positive territory, however the gains were hard won, and lacked conviction,” said CMC Markets chief market analyst Michael Hewson.
“In the US, the attempts to move higher were similarly lacking in conviction, with the best that can be said is that we’ve seen a little bit of a pause for breath after recent heavy declines, as we head towards the end of the week, and the month.”
Hewson said the open in Europe looked positive after Facebook owner Meta Platforms’ first quarter numbers were not as bad as feared, sending the shares higher after hours in a “bit of a relief rally”, while Asia markets also moved higher on pledges of further fiscal support from Chinese policymakers.
“April has been a disappointing month for stock markets in general, but for US markets it’s been particularly bad with the Nasdaq 100 hitting one-year lows yesterday, before managing to finish more or less unchanged.”
On the economic front, all eyes were on the United States, where the latest economic growth measure was due to be released at 1330 BST.
GDP growth is expected to have slowed significantly in the first quarter, with economists pencilling in a rise of 1.1%, compared to 6.9% three months ago.
On home shores, Bank of England governor Andrew Bailey is due to speak at 1000 BST, while in Germany, inflation figures for April are due out at 1300 BST.
In equities, kitchen supplier Howden Joinery was higher after reporting that overall revenues had grown 21.8% year-on-year in the 16 weeks ended 16 April, while same depot revenues were up 20.1%, driven by increases in both prices and volume.
Unilever was managing gains after warning about rising costs, as the consumer goods group reported higher first-quarter sales driven by price increases.
Asia-focused bank Standard Chartered jumped at the open, after reporting a better-than-expected 6% rise in first-quarter profit, boosted by rising global interest rates.
Pharmaceuticals firm Indivior was firmer after first quarter net revenue came in at $207m (£165.07m), up 15% year-on-year, as it maintained its guidance for the full year.
Premier Inn owner Whitbread was higher after swinging to a full-year profit and beating estimates as revenues improved, although it raised guidance on cost inflation as the economic squeeze continued.
Glencore rose after the miner said its trading business boomed in the first quarter, as the war in Ukraine caused shortages of some commodities and volatile markets.
Barclays was higher, even after it delayed its £1bn share buyback further as a £523m conduct charge caused the bank’s first-quarter profit to fall.
Pre-tax profit dropped 7% to £2.23bn in the three months to the end of March from a year earlier as income rose 10% to £6.5bn.
The decline was caused by the conduct charge which covered over-issuance of securities in the US and customer compensation costs for a separate matter.
On the downside, supermarket chain Sainsbury’s was sliding after it warned of lower profits this fiscal year as the cost-of-living crisis and inflation hit the economy.
The company forecast underlying pre-tax profit of £630m – £690m in full-year 2022/23 as it posted a £730m profit last year, up 104% on the prior 12 months driven by grocery and fuel sales.
St. James’s Place was weaker after it reiterated its expectations for full-year new business growth and over the medium-term, despite the “significant” impact of the war in Ukraine during the first quarter.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Standard Chartered Plc | +12.82% | +61.50 | 541.20 |
| 2 |  |
Whitbread Plc | +3.30% | +91.00 | 2,848.00 |
| 3 |  |
Ashtead Group Plc | +3.04% | +127.00 | 4,300.00 |
| 4 |  |
Smith & Nephew Plc | +3.04% | +38.50 | 1,307.00 |
| 5 |  |
Coca-cola Hbc Ag | +2.88% | +46.00 | 1,644.00 |
| 6 |  |
Hiscox Ltd | +2.59% | +23.80 | 944.20 |
| 7 |  |
Lloyds Banking Group Plc | +2.50% | +1.15 | 46.92 |
| 8 |  |
Taylor Wimpey Plc | +2.32% | +2.90 | 127.75 |
| 9 |  |
Burberry Group Plc | +2.29% | +35.00 | 1,565.50 |
| 10 |  |
Rolls-royce Holdings Plc | +2.03% | +1.67 | 84.05 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | -3.40% | -27.00 | 766.80 |
| 2 |  |
Sainsbury (j) Plc | -2.93% | -7.00 | 232.00 |
| 3 |  |
Relx Plc | -0.91% | -22.00 | 2,393.00 |
| 4 |  |
Anglo American Plc | -0.78% | -27.50 | 3,479.00 |
| 5 |  |
Pearson Plc | -0.78% | -6.00 | 767.60 |
| 6 |  |
Severn Trent Plc | -0.76% | -24.00 | 3,136.00 |
| 7 |  |
St. James’s Place Plc | -0.65% | -8.50 | 1,306.50 |
| 8 |  |
United Utilities Group Plc | -0.43% | -5.00 | 1,155.50 |
| 9 |  |
Antofagasta Plc | -0.36% | -5.50 | 1,539.00 |
| 10 |  |
Tesco Plc | -0.33% | -0.90 | 272.70 |
Europe open: Shares up on strong earnings reports
European stocks opened higher on Thursday as investors digested another earnings and corporate news dump and eyed Russia’s threats to disrupt gas supplies to the continent.
The pan-European Stoxx 600 index was up 1.25% in early trade after a mixed session on Wall Street and positive close in Asia.
Markets had been shaken on Wednesday over energy supply fears after Russia’s Gazprom halted gas supplies to Poland and Bulgaria.
Gazprom turned off the supply tap because they had refused to pay for the gas in roubles, an ultimatum issued by Russian dictator Vladimir Putin in order to raise cash to pay for his unprovoked invasion of Ukraine.
The move pushed European gas prices higher and the euro to a five-year low against the dollar earlier in the day.
In a results-heavy day, shares in banking software specialist Temenos soared almost 14% on reports that tech-focused private equity firm Thoma Bravo had approached it over a possible takeover.
Asia-focused bank Standard Chartered jumped 10.1% as it beat quarterly earnings forecasts, while Spain’s Banco Sabadell was also higher on positive earnings.
Builders merchant Grafton was also higher after a jump in first-quarter revenue.
German online takeaway food company Delivery Hero fell 6% despite saying it was on track for a positive adjusted core profit this year.
UK supermarket group Sainsbury fell after warning of lower profits as higher inflation and a cost of living crisis would hit consumer spending.
US close: Dow finishes higher on mixed day for Wall Street
Wall Street stocks were mixed at the close on Wednesday, with the Dow clawing back some of the losses it recorded in a heavy sell-off on Tuesday.
At the close, the Dow Jones Industrial Average was up 0.19% at 33,301.93, as the S&P 500 added 0.21% to 4,183.96, and the Nasdaq Composite slipped 0.01%, or just 1.81 points, to 12,488.93.
The Dow closed 61.75 points higher on Wednesday, following heavy losses in the previous session as a result of a tech-led sell-off that has lasted much of the month.
“After yesterday’s rout US markets needed a breather and it got some strong updates from Microsoft and Visa, with the latter forecasting revenue to surpass pre-pandemic levels,” said AJ Bell financial analyst Danni Hewson.
“With people able to travel and generally live their lives free of Covid restrictions over the last quarter, consumer spend has been ticking up.
“But belt-tightening is a worry and operational costs have also been heading in the wrong direction.”
Hewson added that shares in both Alphabet and Meta slipped as investors digested disappointing results from the former, and braced for a similar update from the latter.
“Robust ad spend is crucial for Meta’s success and the expectation is that if YouTube is feeling the pinch Meta won’t fare better.
“Marketing budgets are being pared back as companies adjust to the current situation.
“Not only are they having to think about their own financial health, but the reality is if consumers don’t have cash to spend there’s no point wasting money trying to tempt them.”
On the economic front, mortgage applications fell 8.3% in the week ended 22 April, according to the Mortgage Bankers Association, marking a seventh-straight week of declines amid increased mortgage rates.
Elsewhere, an advance reading of March’s goods trade balance revealed the US goods trade deficit increased to an all-time high of $125.3bn, according to the Census Bureau, up from a revised $106.3bn in February.
Imports surged 11.5% to a record $294.6bn, driven by purchases of industrial supplies, while exports went up 7.2% to a record $169.3bn, pushed up by sales of industrial supplies and capital goods.
Still on data, US retail inventories, excluding autos, increased to 2.30% in March, accelerating from a 1.50% advance in February, according to preliminary estimates from the Census Bureau.
Finally, pending home sales fell for a tenth straight month in March, down 8.2% as pending home sales fell across all regions in the US, according to the National Association of Realtors.
Earnings from tech behemoth Microsoft were in focus, with the company closing up 4.18% after it posted third-quarter earnings that beat expectations and also sounded an optimistic tone when discussing its outlook for the current quarter.
Elsewhere, Kraft Heinz beat on earnings and raised its full-year outlook, with the food conglomerate rising 1.35% by the closing bell.
On the downside, Google parent Alphabet slid 3.75% after it reported a 23% uptick in first quarter earnings, but said net profits had actually dropped to $16.4bn as YouTube advertising slowed.
Robinhood Markets was in the red by 4.9% after the retail broker warned that it would be cutting back on staff due to “duplicate roles and job functions”.
Music streaming giant Spotify Technology tumbled 12.44% despite reporting that nearly all of its key metrics surpassed guidance in the first quarter, with total revenues increasing 24% to €2.66bn.
Boeing descended 7.53% following a big-time earnings miss, while Meta Platforms, Qualcomm, PayPal and Hertz were all set to publish their latest sets of numbers after the close.
Thursday newspaper round-up: Passport Office, Brexit checks, Elon Musk, BT, windfall tax
The private company behind the Passport Office’s contact centre has been ordered to hire more staff to ease “unacceptable” delays. Teleperformance, the French-owned multinational that is responsible for call handling, has been “urgently tasked to add additional staff” by the Home Office, which is trying to avert a summer of chaos. – The Times
The UK government is set to announce a fourth delay to physical checks on fresh food imported from the EU amid industry reports that neither technology nor infrastructure resources were ready for the July start of the next phase of Brexit. The Brexit opportunities minister, Jacob Rees-Mogg, is expected to frame the move as use of the UK’s newfound independent powers to control the trade border since the departure from the EU and the single market. – Guardian
Elon Musk has lost a legal bid to get rid of his “Twitter Sitter”, a Tesla lawyer who is in charge of overseeing comments the billionaire wishes to post on social media about his electric car company. Last month, the Tesla chief asked a US judge to end his 2018 deal with the US Securities and Exchange Commission (SEC), which included scrutiny of his tweets, claiming it violates his right to free speech. – Telegraph
The Serious Fraud Office has intensified its inquiry into the business empire of metals magnate Sanjeev Gupta after its investigators raided sites across his GFG Alliance to obtain documents. The co-ordinated and unannounced operation yesterday involved GFG trading sites in England, Scotland and Wales. Investigators used Section 2 notices to demand the immediate provision of documents including “company balance sheets, annual reports and correspondence” related to the investigation, the fraud office said. – The Times
Rishi Sunak has opened the door to a windfall tax on oil and gas companies despite previously dismissing the policy, as Labour accused the government of burying its head in the sand over spiralling bills. The chancellor hinted at a possible U-turn on a tax on oil and gas providers, having repeatedly refused to countenance the idea in the past when suggested by Labour and the Liberal Democrats. – Guardian
BT is to be phased out as a “flagship” brand for millions of consumers as the former state-owned phone monopoly seeks to see off rivals in the fierce broadband market. The BT Group has said that it will instead focus on promoting its EE division, in sweeping reforms that will spark fears the company’s much-loved BT television adverts are to be consigned to history. – Telegraph
The foreign secretary believes that the war in Ukraine could last for years and fears President Putin could deploy weapons of mass destruction in a desperate attempt to break the deadlock. Liz Truss, in a speech at Mansion House in London, said that Putin was a “rogue operator” and warned that he could invade other countries, including Georgia and Moldova. – The Times
The Conservatives have been hit by yet another House of Commons sex scandal after a female minister reported seeing a male colleague watching porn on a mobile phone in parliament. A string of the party’s female MPs have complained to the whips about sexism and misogyny within its ranks in a heated meeting on Tuesday night. – Guardian
Matt Hancock blamed Public Health England (PHE) for discharging untested hospital patients to care homes, after the High Court ruled the policy was unlawful. The former health secretary said PHE failed to alert him to asymptomatic transmission of the Covid virus, after the judges’ ruling on the Department of Health and Social Care (DHSC) policy in the early stages of the pandemic. – Telegraph
The owner of Facebook and Instagram has suffered its slowest quarterly sales growth in a decade but the number of users exceeded Wall Street forecasts sending the stock sharply higher. Shares in Meta Platforms rose by 18.9 per cent in late trading last night as the world’s largest social media group revealed a rise in activity and posted stronger than forecast profits. – The Times
Ministers will formally start the process of privatising Channel 4 on Thursday – despite widespread opposition from the British media industry, the broadcaster’s current management, and a large number of Conservative MPs. The government insists that the publicly owned channel needs to be sold off, but there are doubts over whether they have the political support required to pass the necessary legislation. Ministers will also finally publish the conclusions of a 60,000-strong public consultation on the sale, with most comments expected to be against privatisation. – Guardian
The Silicon Valley life coaching startup employing Prince Harry is facing a mutiny from staff who have accused the company of questionable ethics while questioning the value of the royal’s role. The Duke of Sussex was appointed “chief impact officer” at BetterUp, a life coaching and mental health firm, last March. – Telegraph
