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London open: Stocks edge up as Shell rallies on results
London stocks edged higher in early trade on Thursday as investors sifted through a raft of earnings from the likes of Shell and Lloyds, and eyed the latest policy announcement from the European Central Bank.
At 0840 BST, the FTSE 100 was up 0.2% at 7,069.14.
Victoria Scholar, head of investment at Interactive Investor, said: “European markets have opened mostly lower with the FTSE 100 outperforming. Shell is at the top of the UK index thanks to upbeat third quarter earnings, while BP is also rallying in its slipstream. Meanwhile Unilever is in positive territory thanks to its latest results.
“Focus turns to the European Central Bank’s rate decision at lunchtime which is expected to announce the second 75 basis point hike in a row as it looks to get to grips with inflation in the euro zone. In the US, investors will be looking for further signs of an economic slowdown stateside with the release of its latest GDP growth figures.”
In equity markets, oil giant Shell was the standout performer on the top-flight index as it announced a $4bn share buyback and posted better-than-expected third-quarter profits.
Adjusted earnings rose to $9.5bn from $4.1bn in the third quarter a year earlier, but were down from the record $11.5bn posted in the second quarter of the year. Analysts had been expecting net earnings of $9bn.
BP also gained.
Unilever was trading just a smidgen higher after the consumer goods giant posted a 10.6% rise in third-quarter underlying sales growth and lifted its sales guidance for the year, but warned over the challenges of high inflation.
On the downside, Lloyds slid after it lifted net income guidance despite a fall in third-quarter profit and rise in bad loan charges. The company said it now expected net interest margin, a key measure of the difference between lending and savings rates, to be above 2.90% compared with a 2.84% in the year to date.
Pre-tax profit fell 26% to £1.5bn. Net income rose 12% to £13bn on the back of surging interest rates with impairment charges soaring to £668m from a release of £119m a year ago.
Airtel Africa tumbled after its half-year pre-tax profit missed analysts’ expectations.
Anglo American was also in the red after the miner reported a slight fall in third-quarter output, as it ramped up its steelmaking coal longwall operations and posted a strong performance at its De Beers diamond unit.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Shell Plc | +3.17% | +73.00 | 2,372.50 |
| 2 |  |
Sainsbury (j) Plc | +2.37% | +4.55 | 196.70 |
| 3 |  |
Rolls-royce Holdings Plc | +2.31% | +1.72 | 76.19 |
| 4 |  |
Land Securities Group Plc | +2.18% | +12.40 | 580.60 |
| 5 |  |
Standard Chartered Plc | +2.02% | +10.60 | 536.60 |
| 6 |  |
Marks And Spencer Group Plc | +1.99% | +2.15 | 110.25 |
| 7 |  |
Bp Plc | +1.96% | +9.15 | 475.15 |
| 8 |  |
Whitbread Plc | +1.79% | +46.00 | 2,620.00 |
| 9 |  |
Admiral Group Plc | +1.76% | +35.00 | 2,020.00 |
| 10 |  |
Segro Plc | +1.69% | +13.40 | 808.40 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rio Tinto Plc | -3.31% | -160.50 | 4,682.50 |
| 2 |  |
Bhp Group Limited | -2.83% | -63.00 | 2,165.00 |
| 3 |  |
Anglo American Plc | -2.67% | -74.00 | 2,698.50 |
| 4 |  |
Antofagasta Plc | -2.28% | -28.00 | 1,199.50 |
| 5 |  |
Glencore Plc | -2.07% | -10.70 | 505.20 |
| 6 |  |
Ferguson Plc | -1.72% | -166.00 | 9,502.00 |
| 7 |  |
Lloyds Banking Group Plc | -1.57% | -0.67 | 41.88 |
| 8 |  |
Ashtead Group Plc | -1.36% | -62.00 | 4,492.00 |
| 9 |  |
Carnival Plc | -1.26% | -8.60 | 673.20 |
| 10 |  |
Scottish Mortgage Investment Trust Plc | -1.14% | -8.60 | 748.20 |
US close: Stocks finish weaker on big tech disappointments
Trading finished mostly below the waterline in the US on Wednesday, after weaker-than-expected third-quarter earnings from Alphabet and Microsoft weighed on sentiment.
At the close, the Dow Jones Industrial Average was up 0.01% at 31,839.11, while the S&P 500 lost 0.74% to 3,830.60 and the Nasdaq Composite was off 2.04% at 10,970.99.
The Dow closed just 2.37 points higher on Wednesday, barely extending Tuesday’s gains as investors thumbed through data and earnings from some of the nation’s biggest tech firms.
“US markets initially saw a mixed open with the Nasdaq leading the losses after both Microsoft and Alphabet’s latest quarterly numbers prompted a negative reaction after hours, and which has resulted in sharp falls for both on the open, although we have seen a bit of a turnaround in the wake of the Bank of Canada decision,” said CMC Markets chief market analyst Michael Hewson.
“The Bank of Canada raised rates by a less-than-expected 50-basis bps to 3.75%, in a move that suggests that central banks are starting to wake up to the possibility that too aggressive rate rises could do more harm than good.
“It’s also got markets asking the question, could the Fed follow suit next week after another poor set of housing numbers from the US?”
On the economic front, mortgage applications fell 1.70% week-on-week in the seven days ended 21 October, according to the Mortgage Bankers Association of America, marking a fifth consecutive drop amid continued increases in borrowing costs.
Elsewhere, America’s shortfall on trade in goods with the rest of the world widened unexpectedly during the previous month amid a drop in exports.
According to preliminary figures from the Department of Commerce, in seasonally adjusted terms, the so-called visible trade deficit increased at a month-on-month pace of 5.7% to reach -$92.2bn.
Economists had pencilled in a print of -$87.8bn.
On another note, building permits increased 1.4% month-on-month in September to an annualised clip of 1.56m, according to the Census Bureau, in line with preliminary estimates.
Finally, new home sales decreased to 603,000 in September, according to data also from the Census Bureau, down from 677,000 a month earlier.
In equities, Google parent Alphabet tumbled 9.63% after the tech giant fell short of expectations on both the top and bottom lines, and posted a decline in YouTube advertising revenue.
Microsoft was 7.72% weaker after it delivered cloud revenue that failed to meet consensus, despite beating both earnings and revenue estimates, and also provided current-quarter revenue guidance that fell short of expectations.
On the upside, Visa was ahead 4.6% after the credit card behemoth beat quarterly earnings expectations, with payment volumes growing 10% in its fourth quarter.
Facebook parent Meta Platforms reported a dire set of numbers after the close, meanwhile, with third quarter earnings more than halving to $4.39bn from $9.2bn.
That was on the back of total sales of $27.17bn, down from $29bn year-on-year, while earnings per share came in at $1.64 per share, well below the $1.90 expected by analysts.
Meta shares ended the session down 5.59%, and were then 18.75% weaker in after-hours action.
Thursday newspaper round-up: Meta, Twitter, Boeing
Shares of Meta plummeted on Wednesday after the company announced mixed results in its third-quarter earnings report, alongside billion-dollar losses in the division devoted to its ambitious “metaverse” project. The Facebook parent company beat analyst predictions for revenue but offered a weak forecast for the upcoming quarter. It posted $27.7bn in revenue for the third quarter, higher than the $27.4bn predicted but 4% less than the same period last year. Its earnings a share, which accounts for expenses, was $1.64 – lower than the $1.89 predicted. – Guardian
Britain’s plan to become a post-Brexit “science and technology superpower” has suffered a significant setback after a fall in research and development investment of almost a fifth since 2014, according to a report. The Institute for Public Policy Research said the UK’s share of global investment in R&D projects – including in health and life sciences – had fallen sharply from 4.2% eight years ago to 3.4% in 2019 immediately before the Covid pandemic struck. – Guardian
Net zero restrictions on oil drilling are tightening Saudi Arabia’s grip over the global market for crude and will deepen tensions with the West, the International Energy Agency (IEA) has warned. Green rules which limit new oil fields mean that the Saudi-led Opec cartel will come to control 52pc of the market, the agency said, compared to just over a third now. – Telegraph
Elon Musk last night signalled his intention to complete a $44 billion takeover of Twitter by posting a video on the social media platform of him carrying a kitchen sink into its San Francisco headquarters. The world’s richest man, who also heads Tesla, the electric car company, and SpaceX, the spacecraft and satellite operator, must complete the deal to buy the the micro-blogging site for $54.20 per share before a court deadline tomorrow. – The Times
Boeing’s struggling defence division blew a $2.8 billion hole in its parent company’s bottom line in the last quarter as it faced higher production costs and technical issues. The American aircraft maker moved to reassure investors yesterday that it would end the year with positive cashflow, despite widening losses this summer. Nevertheless, shares in Boeing fell by 8.8 per cent, or $12.86, to close at $133.79 on Wall Street last night. – The Times
