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London open: Stocks in the red; HSBC, Whitbread fall after results
London stocks edged lower in early trade on Tuesday as investors sifted through a raft of earnings, with new prime minister Rishi Sunak set to meet King Charles and address the nation later in the day.
At 0840 BST, the FTSE 100 was down 0.2% at 6,998.60, while the pound was 0.2% firmer against the dollar at 1.1299.
CMC Markets analyst Michael Hewson said: “Markets are hoping that the coronation of Rishi Sunak as the next UK Prime Minister will help draw a line under the events of recent days, as the new PM elect warned his party that they needed to unite or die. This may prove to be a tall order, given the Tories propensity for fratricide over the years.
“Given recent events it’s likely that the old divisions may well reassert themselves in the coming days, as things settle down, or if the polls don’t improve, however given recent events it would be quite something to see an immediate rebound in the government’s political fortunes.
“The fall in UK gilt yields does suggest one thing and that is we will probably see a budget delivered next week and all the indications are it will be delivered by Jeremy Hunt, the existing Chancellor of the Exchequer. It would be highly unsettling for markets if Hunt was removed this close to Monday’s budget, however given the Tories recent propensity for shooting themselves in the face, anything is possible.”
In equity markets, HSBC was under the cosh as it posted a 42% fall in third-quarter profits due to rising loan losses and assets sales. The bank also announced the appointment of Georges Elhedery, a former head of its investment bank, as its new chief financial officer.
HSBC reported a pre-tax profit of $3.15bn for the three months to 30 September, down from $5.4bn last year, but above the $2.45bn consensus of analyst estimates compiled by the bank.
Premier Inn owner Whitbread also fell despite saying it swung to an interim profit.
Genuit lost ground after saying it expects profit for the year to be at the lower end of analyst expectations as market turmoil hit trading at the end of the third quarter.
On the upside, retailers gained after a well-received update from e-commerce group THG, with B&M European Value Retailer, JD Sports, B&Q owner Kingfisher and Asos all up.
IT infrastructure services provider Softcat also pushed higher as it reported a rise in full-year profit and revenue, hailing good growth across all segments.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Burberry Group Plc | +1.91% | +35.00 | 1,863.00 |
| 2 |  |
Flutter Entertainment Plc | +1.86% | +200.00 | 10,975.00 |
| 3 |  |
Carnival Plc | +1.80% | +11.20 | 632.80 |
| 4 |  |
Scottish Mortgage Investment Trust Plc | +1.72% | +12.60 | 747.00 |
| 5 |  |
Ocado Group Plc | +1.40% | +6.70 | 486.10 |
| 6 |  |
Hargreaves Lansdown Plc | +1.13% | +8.40 | 749.20 |
| 7 |  |
Admiral Group Plc | +1.12% | +22.00 | 1,979.00 |
| 8 |  |
Marks And Spencer Group Plc | +1.07% | +1.10 | 103.55 |
| 9 |  |
Sage Group Plc | +1.00% | +7.20 | 724.00 |
| 10 |  |
Relx Plc | +0.93% | +21.00 | 2,283.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hsbc Holdings Plc | -6.95% | -33.00 | 442.10 |
| 2 |  |
Standard Chartered Plc | -3.56% | -20.00 | 541.60 |
| 3 |  |
Johnson Matthey Plc | -1.90% | -37.00 | 1,913.00 |
| 4 |  |
Centrica Plc | -1.60% | -1.10 | 67.76 |
| 5 |  |
Anglo American Plc | -1.38% | -37.00 | 2,649.50 |
| 6 |  |
Persimmon Plc | -1.34% | -17.00 | 1,256.00 |
| 7 |  |
Bhp Group Limited | -1.28% | -28.00 | 2,158.50 |
| 8 |  |
Barclays Plc | -1.26% | -1.88 | 147.06 |
| 9 |  |
Berkeley Group Holdings (the) Plc | -1.22% | -42.00 | 3,387.00 |
| 10 |  |
Shell Plc | -1.22% | -28.50 | 2,316.50 |
US close: Major indices extend gains ahead of tech earnings
Wall Street stocks put on a solid performance on Monday as market participants prepped for a week packed full of earnings from the nation’s top tech firms.
At the close, the Dow Jones Industrial Average was up 1.34% at 31,499.62, while the S&P 500 was up 1.19% at 3,797.34 and the Nasdaq Composite started off the session 0.86% weaker at 10,952.61.
The Dow Jones closed 417.06 points higher on Monday, extending gains recorded in the previous session as hopes that the Federal Reserve may slow rate hikes offset disappointing earnings from Snap.
Earnings will again be in focus over the next five days, with Google owner Alphabet and Microsoft set to report on Tuesday, Facebook parent company Meta ready to publish its latest set of quarterly numbers on Wednesday, and Apple and Amazon ready to close out the week on Friday.
Also in the corporate space, Tesla shares closed 1.49% lower after the electric carmaker revealed it will lower prices on certain electric vehicles sold in China.
On the macro front, the Chicago Fed‘s national activity index printed at 0.10 in September, unchanged from August’s revised reading and pointing to modest growth in overall economic activity throughout the month.
Elsewhere, a flash reading of S&P Global‘s manufacturing purchasing managers index revealed a drop to 49.9 in October from 52 in September, well below expectations for a reading of 51 and the sector’s first contraction since June 2020. The services PMI dropped to 46.6 in October from 49.3 in the previous month, well below market forecasts of 49.2, while the composite PMI declined from 49.5 in September to 47.3 in October, the second-fastest pace of contraction in the sector since 2009,
Data from China was also drawing an amount of investor attention at the open, with news that gross domestic product in the People’s Republic had expanded 3.9% year-on-year in the third quarter. That was better than the 3.3% rise pencilled-in by economists and well ahead of the 0.4% print seen back in the second quarter.
Also in focus, the foreign ministers of France, the United Kingdom, and the United States reiterated their support for Ukraine’s sovereignty and territorial integrity and discussed their determination to continue supporting Kyiv’s efforts to defend its territory for as long as it takes.
Tuesday newspaper round-up: Big tech, mortgages, Glencore
The UK’s City watchdog is to examine how to regulate “big tech” companies such as Apple, Google and Amazon over fears they could harm competition in Britain’s financial services sector. The Financial Conduct Authority (FCA) said that big tech companies could provide innovations in financial services and drive down costs, but also expressed concerns that they could build dominant positions leading to the “potential exploitation of market power”, according to analysis published on Tuesday. – Guardian
The number of low-deposit 95% mortgages on sale has fallen by more than half since last month’s scrapped mini-budget, stoking fears that financial uncertainty could lead some banks to scrap the deals that are often the only way first-time buyers with small deposits can own a home. Data from Moneyfacts shows that the number of new 95% mortgages stood at 137 on Monday. – Guardian
Lawyers are to be hit with a £200 penalty if they fly to meetings as part of efforts by one of the country’s largest legal firms to cut down on its carbon footprint. Shoosmiths will dock the sum from its communal travel budget if its lawyers choose to hop on a flight, as part of its ambitious plans to reach net zero emissions. – Telegraph
Executives involved in a major bribery scandal at Glencore are to have their identities kept secret as British fraud prosecutors decide whether to charge them. A total of 17 individuals are under investigation and could face criminal charges, according to the Serious Fraud Office (SFO) after the mining titan pleaded guilty to paying more than $28m (£22m) in bribes to gain access to oil cargoes. – Telegraph
City law firms are gearing up for a potential wave of legal disputes after pension funds were forced to sell assets quickly in the wake of the mini-budget. Professional advisers are assessing a range of legal risks arising out of the crisis that engulfed defined-benefit pension schemes, legal sources said. – The Times
