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London open: FTSE underperforms European peers as ex-divs weigh
London’s top flight index was just a smidgen higher in early trade on Thursday, underperforming its European peers as ex-dividend stocks weighed.
At 0840 BST, the FTSE 100 was up just 0.1% at 7,513.38
Victoria Scholar, head of investment at Interactive Investor, said: “After last night’s rally on Wall Street thanks to a better-than-expected US inflation report, European markets have followed suit trading upwards thanks to global risk-on sentiment.
“Basic resources are underperforming while technology and financials are leading the charge. The FTSE 100 is lagging behind…while the DAX, CAC and FTSE MIB push higher.”
On the macroeconomic front, investors will eye the US producer price index for July and initial jobless claims, both due at 1330 BST.
In equity markets, Rio Tinto, Segro, Ashtead, Barclays, AstraZeneca, Jupiter Fund Management, Direct Line and Hiscox all lost ground as they traded without entitlement to the dividend.,
Elsewhere, miner Antofagasta was under the cosh after it reported lower interim profits due to a volatile copper price, a drought in Chile and concentrate pipeline problems at its Los Pelambres operation.
Spirax-Sarco Engineering was also in the red even as it hailed a “strong” first half despite headwinds, reported a jump in profits and said order books remain at record levels.
Drax tumbled after UK business secretary Kwasi Kwarteng said the company’s imports of US-made wood pellets to be burnt for energy wasn’t sustainable. According to The Financial Times, Kwarteng said it “doesn’t make sense” and told MPs that the government had not fully investigated the sustainability of burning wood pellets, a type of biomass.
On the upside, Ladbrokes owner Entain rallied after it announced a new drive to expand in Central & Eastern Europe and the acquisition of a Croatian sportsbook operator, as it posted a rise in first-half net gaming revenue.
Coca-Cola HBC fizzed higher after it reported half-year net sales of €4.21bn, beating market expectations of €3.98bn.
OSB also gained as it posted a 16% increase in interim underlying pre-tax profit to a record £294.1m.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Coca-cola Hbc Ag | +2.07% | +41.00 | 2,022.00 |
| 2 |  |
Hargreaves Lansdown Plc | +1.84% | +17.80 | 987.20 |
| 3 |  |
Anglo American Plc | +1.62% | +48.00 | 3,005.00 |
| 4 |  |
Shell Plc | +1.50% | +32.50 | 2,202.00 |
| 5 |  |
St. James’s Place Plc | +1.49% | +18.50 | 1,263.00 |
| 6 |  |
Glencore Plc | +1.47% | +6.90 | 476.85 |
| 7 |  |
Micro Focus International Plc | +1.18% | +3.50 | 299.70 |
| 8 |  |
Bp Plc | +1.07% | +4.50 | 425.75 |
| 9 |  |
Rolls-royce Holdings Plc | +0.94% | +0.80 | 86.35 |
| 10 |  |
Fresnillo Plc | +0.76% | +5.60 | 745.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | -3.83% | -59.60 | 1,497.00 |
| 2 |  |
Rio Tinto Plc | -3.47% | -173.50 | 4,829.50 |
| 3 |  |
Hikma Pharmaceuticals Plc | -2.64% | -42.50 | 1,568.50 |
| 4 |  |
Ashtead Group Plc | -1.83% | -86.00 | 4,601.00 |
| 5 |  |
British Land Company Plc | -1.65% | -8.00 | 476.70 |
| 6 |  |
Persimmon Plc | -1.59% | -30.00 | 1,859.00 |
| 7 |  |
Land Securities Group Plc | -1.47% | -10.80 | 723.40 |
| 8 |  |
Berkeley Group Holdings (the) Plc | -1.33% | -55.00 | 4,095.00 |
| 9 |  |
Smith & Nephew Plc | -1.31% | -14.00 | 1,051.50 |
| 10 |  |
Antofagasta Plc | -1.30% | -15.50 | 1,177.50 |
US close: Stocks higher following CPI data
Wall Street stocks closed sharply higher on Wednesday as market participants digested last month’s CPI data.
At the close, the Dow Jones Industrial Average was up 1.63% at 33,309.51, while the S&P 500 was 2.13% firmer at 4,210.24 and the Nasdaq Composite saw out the session 2.89% stronger at 12,854.80.
The Dow closed 535.10 points higher on Wednesday, erasing losses recorded in the previous session as market participants digested more second-quarter earnings.
Wednesday’s primary focus was data that showed US inflation slowed more than expected in July, according to the Bureau of Labor Statistics, advancing at an 8.5% clip in July, down from June’s 40-year high of 9.1%.
Compared to the previous month rate, CPI was unchanged after rising at a 17-year high print of 1.3%, below forecasts of 0.2%. Core inflation remained steady at 5.9%, beating market expectations for a reading of 6.1% and going a ways to indicate that inflation may have finally peaked.
Elsewhere on the macro front, US mortgage applications edged 0.2% higher in the week ended 7 August, according to the Mortgage Bankers Association, amid a 3.5% increase in refinancing and a 1.4% drop in purchases.
Finally, wholesale inventories in the US increased 1.8% month-on-month earlier to $895.4bn in June, slightly below initial estimates for a reading of a 1.9% rise and following a 1.9% gain in May. June’s increase marked the 23rd straight month of gains, with durable goods stocks up 2% and nondurables up 1.4%.
In terms of earnings, Jack in the Box Q3 earnings missed estimates, with a quarterly EPS of $1.38, while Wendy’s reported a squeeze from inflation throughout the quarter as margins fell short of expectations.
After the close, Walt Disney revealed that subscriber growth had blown past estimates, helping the entertainment giant best expectations for both the top and bottom line.
Thursday newspaper round-up: Disney, Russian airlines, renters
Walt Disney edged past Netflix with a total of 221 million streaming subscribers at the end of the most recent quarter and announced it will launch a Disney+ option with advertising this December. In the just-ended quarter, Disney+ added 14.4 million Disney+ customers, beating the consensus of 10 million expected by analysts polled by FactSet, as it released Star Wars series Obi-Wan Kenobi and Marvel’s Ms Marvel. – Guardian
One of the UK’s largest home insurers has warned over the impact of record temperatures on claims, saying the climate crisis was already resulting in a rise in fire and subsidence cases this year. LV=General Insurance (LV=GI), which was bought by the German insurer Allianz in 2019, said it was dealing with claims worth £1.2m after the extreme heat that hit the country between 17 and 20 July. – Guardian
Russian airlines are dismantling Western-made aeroplanes for spare parts as sanctions over the invasion of Ukraine cripple its aviation industry. At least one Russian-made Sukhoi Superjet 100 and an Airbus A350, both operated by Aeroflot, are currently grounded and being stripped for spares, one source familiar with the matter told Reuters. – Telegraph
A top banker who was suspended after telling a female analyst that he needed “love and affection” while on a work trip in Barcelona has quit. Sources said that Jan Skarbek, one of the most high-profile dealmakers at Citigroup, has resigned from the Wall Street lender after allegedly making the comments to a colleague while on a staff getaway. – Telegraph
Renters should be able to use their history of payments as proof that they can afford a mortgage, a think tank has argued. The recommendation is one of several made by Policy Exchange that it says should be adopted by the government if it is serious about helping people to get on the housing ladder. – The Times
