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London open: Compass paces the gains as investors await US inflation data
London stocks rose in early trade on Wednesday, with caterer Compass pacing the advance after well-received results, as investors eyed the latest US inflation reading.
At 0845 BST, the FTSE 100 was up 0.5% at 7,277.08.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “The market has taken the lead from the US, where the S&P 500 and Nasdaq both produced a positive end to the day’s trading sessions. This is especially welcome news given the tech-heavy Nasdaq’s battering over recent months.
“Less positive notes are being heard in China, where the annual inflation rate has accelerated to 2.1%, up from 1.5% in March. This is the highest level since November and is directly related to the logistic and supply disruption amid the country’s strict Covid curbs.
“More stark is the increase in producer prices, which rose 8% year-on-year. The wider repercussions of this depends on how much longer zero-Covid policies remain, and there have been signs these are going to temper.”
On the macro front, investors were looking ahead to US inflation figures later in the day.
Victoria Scholar, head of investment at Interactive Investor, said the data “will be front-and-centre for markets amid concerns that rising price levels could push the world’s largest economy into recession”.
“Price levels accelerated to 8.5% in March, the highest since December 1981, topping expectations while US GDP unexpectedly contracted in the first quarter dropping 1.4% on an annualised basis. The inflation data will also provide some insight into whether the Fed needs to act more aggressively by accelerating its rate hiking path.
“While the data is expected to ease to 8.1%, stronger-than-expected inflation figures could put pressure on equities and lift the dollar if the market thinks a 75-basis point hike at one meeting is back on the table.”
In equity markets, Compass surged to the top of the FTSE 100 after the catering group posted a jump in first-half operating profit, lifted its revenue guidance and announced the launch of a £500m share buyback as it hailed strong growth across all sectors.
Elsewhere, Ashtead was boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Watches of Switzerland was sitting pretty at the top of the FTSE 250 after an upgrade to ‘buy’ at Goldman Sachs.
TP Icap and Harbour Energy were both higher after trading updates, while holiday giant Tui edged up after saying it was confident bookings for this summer would be close to 2019 pre-Covid pandemic levels after first-half losses were more than halved.
Broadcaster ITV was a touch firmer after it reported “strong” first-quarter revenues, driven by a “robust” operational and financial performance throughout the period.
On the downside, telecommunications and mobile money services company Airtel Africa was weaker after its fourth-quarter numbers missed expectations.
Landscaping products supplier Marshalls was also down despite reporting higher revenue in the first four months of the year against strong comparators in 2021 as people took on home improvement projects during Covid pandemic lockdowns.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Compass Group Plc | +10.27% | +162.00 | 1,739.50 |
| 2 |  |
Prudential Plc | +5.32% | +47.00 | 930.00 |
| 3 |  |
Tui Ag | +4.24% | +9.20 | 226.30 |
| 4 |  |
Carnival Plc | +3.69% | +38.50 | 1,083.00 |
| 5 |  |
Rio Tinto Plc | +3.68% | +190.00 | 5,353.00 |
| 6 |  |
Burberry Group Plc | +3.68% | +54.50 | 1,536.50 |
| 7 |  |
Whitbread Plc | +3.56% | +90.00 | 2,619.00 |
| 8 |  |
Easyjet Plc | +3.53% | +17.30 | 507.60 |
| 9 |  |
International Consolidated Airlines Group S.a. | +3.48% | +4.28 | 127.30 |
| 10 |  |
Intercontinental Hotels Group Plc | +3.28% | +157.00 | 4,949.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tesco Plc | -1.66% | -4.60 | 272.60 |
| 2 |  |
Ocado Group Plc | -1.54% | -12.20 | 779.20 |
| 3 |  |
Rentokil Initial Plc | -1.33% | -6.80 | 504.00 |
| 4 |  |
Sainsbury (j) Plc | -1.16% | -2.70 | 230.30 |
| 5 |  |
Bunzl Plc | -0.94% | -28.00 | 2,940.00 |
| 6 |  |
Smurfit Kappa Group Plc | -0.73% | -24.00 | 3,264.00 |
| 7 |  |
Admiral Group Plc | -0.70% | -16.00 | 2,263.00 |
| 8 |  |
United Utilities Group Plc | -0.41% | -4.50 | 1,087.00 |
| 9 |  |
Astrazeneca Plc | -0.35% | -36.00 | 10,210.00 |
| 10 |  |
Unilever Plc | -0.28% | -10.50 | 3,690.00 |
US close: Stocks mixed ahead of tomorrow’s CPI reading
Major indices turned in a mixed performance on Tuesday as the Dow Jones gave up early gains to end the session in the red ahead of some key inflation data scheduled for release tomorrow.
At the close, the Dow Jones Industrial Average was down 0.26% at 32,160.74, while the S&P 500 was 0.25% firmer at 4,001.05 and the Nasdaq Composite saw out the session 0.98% stronger at 11,737.67.
The Dow closed 84.96 points higher on Tuesday, extending losses recorded in the previous session.
Tuesday’s moves came as the yield on the benchmark 10-year Treasury note eased off from multiyear highs to trade at roughly 3.082% at the close of trading.
Big-name tech stocks drove the Nasdaq’s gains on Tuesday, with the likes of Microsoft, Intel, Salesforce, and Apple all trading higher.
In terms of earnings, Warner Music Group topped expectations with its quarterly revenue growth, while Peloton slumped after posting a huge loss and offering some weak guidance.
On the macro front, the National Federation of Independent Business‘ small business optimism index was unchanged month-on-month in April at 93.2 as it still hovered at levels not seen in two years.
Wednesday newspaper round-up: City regulation, Trump Twitter ban, Panmure Gordon
More than 250,000 households will “slide into destitution” next year, taking the total number in extreme poverty to around 1.2m, unless the government acts to help the poorest families hit by the energy price shock, according to the National Institute for Economic & Social Research (NIESR). More than 1.5m households will see the rise in food and energy bills outstrip their disposable income, forcing them to rely on savings or extra borrowing to make up the shortfall, said the thinktank, which blamed welfare spending cuts since the Brexit vote in 2016 for leaving millions of families in a vulnerable financial position. – Guardian
Rishi Sunak has moved to weaken regulation of financial services brought in after the 2008 crash amid fears he is aiming to make London into a post-Brexit “Singapore-on-Thames” pushed by Tory donors. The chancellor is bringing forward a new financial services and markets bill as part of the Queen’s speech with the aim of “cutting red tape in the financial sector”. – Guardian
Elon Musk has vowed to reinstate Donald Trump on Twitter if his $44bn (£36bn) takeover of the social media network succeeds, in a move that will further inflame tensions with Democrats ahead of midterm elections. The billionaire Tesla chief said that banning Mr Trump was a “morally bad decision and foolish in the extreme” because it undermined trust in the platform. He added: “The answer is that I would reverse the ban.” – Telegraph
Britain will join the space race this summer with the launch of two shoebox-sized satellites from Cornwall. Equipped with Ministry of Defence kit, the so-called cubesats will take off on a Virgin Orbit Launcher One rocket from Newquay Airport. It will be the first satellite launch from British soil and is aimed at demonstrating the country’s ability to rival other spacefaring nations such as the US, Russia and China. – Telegraph
Panmure Gordon, one of the City’s oldest stockbrokers, turned its biggest profit since before the financial crisis last year as its turnaround under Bob Diamond, the former Barclays boss, gathers pace. The group has racked up tens of millions in losses since it was taken over by Diamond’s Atlas Merchant Capital for £15.5 million in 2017. – The Times
