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London open: Stocks nudge higher; easyJet, Ascential surge
London stocks were just a touch higher in early trade on Wednesday, but easyJet and Ascential surged after upbeat updates.
At 0845 GMT, the FTSE 100 was up 0.1% at 7,762.08.
Data released earlier by the Office for National Statistics showed that factory gate inflation in the UK slowed in the year to December.
Producer input prices rose 16.5%, down from 18% in November, and 20.2% in the year to October.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The falling costs of parts, equipment and fuel prices are all helping, and the overall trend is encouraging, showing inflation is heading in a downwards direction.
“But it’s clear that producers are still grappling with the high cost of doing business while attempting to keep a lid on price increases for customers.”
Elsewhere, the latest retail industry research showed that footfall saw strong growth during 2022, although it remains below pre-pandemic levels.
According to retail consultancy Springboard, footfall fell 14.2% in 2022 compared to 2019. Within that, high streets saw a 16.9% decline and shopping centres a 18.8% slide. Footfall eased 3.7% in retail parks.
Compared to 2021, overall footfall sparked 42%, with a 51.2% jump on high streets, a 52% increase in shopping centres and a 11.7% improvement in retail parks. However, while 2022 was the first restriction-free year since the start of the pandemic, in 2021 the UK was in lockdown for the first four months of the year with all bar essential retail closed.
Online spending habits also shifted in 2022, Springboard noted. In February 2021, 65% of clothes and footwear spending was carried out online, compared to 20.5% in January 2020. But by the end of 2022, just 24.9% of clothes and footwear spending happened online.
Springboard said footfall throughout 2022 had been in line with its forecasts, and marked a “slow but steady” post-pandemic recovery for retail destinations.
In equity markets, budget airline easyJet flew higher after saying it expects to beat full-year profit expectations, as it narrowed losses in the first quarter and forward bookings into the summer surged. British Airways and Iberia owner IAG was the standout gainer on the FTSE 100, while Wizz Air also rose.
Insurer Aviva was in the black after it maintained its dividend guidance and capital returns outlook for the year.
Ascential racked up strong gains after saying that full-year revenues and adjusted EBITDA were set to be ahead of market expectations, and announcing the separation of its digital assets.
JD Wetherspoon was a little lower after it reported a jump in first-half sales, although they remain below pre-pandemic levels.
In broker note action, Entain was knocked lower by a downgrade to ‘neutral’ at Exane, while Experian fell after a downgrade to ‘neutral’ at Credit Suisse.
Dr Martens was hit by a downgrade to ‘hold’ at HSBC, while Direct Line was trading off after a downgrade to ‘hold’ at Berenberg.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +10.30% | +48.20 | 516.20 |
| 2 |  |
Aviva Plc | +2.52% | +11.10 | 452.40 |
| 3 |  |
International Consolidated Airlines Group S.a. | +2.22% | +3.70 | 170.02 |
| 4 |  |
Tui Ag | +1.45% | +2.70 | 188.50 |
| 5 |  |
Lloyds Banking Group Plc | +1.40% | +0.70 | 50.83 |
| 6 |  |
Tesco Plc | +1.03% | +2.50 | 246.40 |
| 7 |  |
Antofagasta Plc | +0.96% | +17.00 | 1,780.00 |
| 8 |  |
Bhp Group Limited | +0.93% | +26.00 | 2,829.00 |
| 9 |  |
Itv Plc | +0.89% | +0.72 | 81.56 |
| 10 |  |
Gsk Plc | +0.68% | +9.40 | 1,396.40 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Direct Line Insurance Group Plc | -2.16% | -3.80 | 172.10 |
| 2 |  |
Experian Plc | -1.76% | -52.00 | 2,910.00 |
| 3 |  |
Carnival Plc | -1.66% | -13.00 | 772.40 |
| 4 |  |
Fresnillo Plc | -1.59% | -14.00 | 864.60 |
| 5 |  |
Bt Group Plc | -1.56% | -2.05 | 129.00 |
| 6 |  |
Scottish Mortgage Investment Trust Plc | -1.44% | -11.00 | 754.20 |
| 7 |  |
British American Tobacco Plc | -1.13% | -35.00 | 3,058.50 |
| 8 |  |
Ocado Group Plc | -1.12% | -8.20 | 725.00 |
| 9 |  |
Spirax-sarco Engineering Plc | -0.95% | -110.00 | 11,460.00 |
| 10 |  |
Smith & Nephew Plc | -0.87% | -10.00 | 1,133.50 |
US close: Stocks mixed amid earnings deluge
Wall Street stocks put on a mixed performance on Tuesday as traders digested an onslaught of earnings from some of the nation’s biggest firms.
At the close, the Dow Jones Industrial Average was up 0.31% at 33,733.96, while the S&P 500 slipped 0.07% to 4,016.95 and the Nasdaq Composite saw out the session 0.27% weaker at 11,334.27.
The Dow closed 104.40 points higher on Tuesday, extending gains recorded in the previous session.
Market participants paid close attention to corporate earnings again on Tuesday, with 3M posting quarterly earnings that fell short of expectations and announcing that it will cut approximately 2,500 jobs.
Elsewhere, Lockheed Martin issued disappointing full-year guidance despite beating Wall Street estimates with its fourth-quarter earnings, while Johnson & Johnson increased its full-year earnings guidance, helped by strong demand for its cancer drugs.
Raytheon Technologies topped earnings estimates but missed revenue guidance, General Electric surpassed fourth-quarter earnings but issued a weaker-than-expected full-year guidance, and Verizon revealed that it had added 217,000 postpaid phone connections during the quarter, driven by gains in its consumer unit.
After the close, Microsoft shares traded lower in extended trading after the tech giant’s guidance fell short of expectations and chief financial officer Amy Hood warned of deceleration.
Also in focus, an apparent technical issue briefly halted trading in dozens of stocks on the New York Stock Exchange shortly after the opening bell. Morgan Stanley, Verizon, AT&T, Nike, and McDonald’s were all impacted by the issue, according to the NYSE. Many stocks saw abnormally large moves at the open, which could have potentially triggered volatility halts.
On the macro front, a flash reading of S&P Global‘s manufacturing PMI revealed an increase to 46.8 in January, up from 46.2 in December and beating market forecasts of 46 but still pointing to the second-fastest contraction in factory activity since May 2020. The services PMI increased to 46.6 in January, up from 44.7 at the end of 2022 and above market expectations of 45.0, while the composite PMI rose to 46.6 in January from 45.0 in the previous month, pointing to a seventh consecutive month of contraction in the country’s private sector but the slowest since last October.
On another note, the Richmond Federal Reserve‘s manufacturing index decreased to -11 in January, down from a reading of 1 in December 2022.
Wednesday newspaper round-up: Britishvolt, Fox Corp/News Corp, energy suppliers
An Australian-based startup, Recharge Industries, has made a nonbinding offer for the collapsed UK battery company Britishvolt that could revive plans to construct a large plant in northern England. The bid was lodged in the UK late on Tuesday, shortly after a cash crunch at Britishvolt sent the company into administration. The collapse has severely dented the country’s attempts to modernise its automotive industry and supply the next generation of UK-built electric vehicles. – Guardian
Rupert Murdoch has scrapped a proposal to combine Fox Corp with News Corp, in a deal that would have reunited the media empire he split nearly a decade ago. In 2013, shareholders approved a plan to divide the media giant’s assets, which include the Times, the Wall Street Journal and the Australian, from its entertainment division in the wake of the UK’s phone hacking scandal. Murdoch said at the time that the separation would “unlock the true value of both companies and their distinct assets”. – Guardian
Britain was exporting power to Ireland even as British households were asked to cut their usage on Monday night, export flows show. Traders sent electricity via undersea cables to Northern Ireland and the Republic while thousands of British households avoided activities such as running the washing machine to save electricity in Britain. – Telegraph
Businesses came under increasing financial stress in the final months of last year as people reined in spending in response to rising household bills. The number of companies in critical financial distress jumped by 36 per cent in the final quarter, according to a report by Begbies Traynor, the insolvency specialist. – The Times
Two of Britain’s biggest energy suppliers have admitted they have not passed on taxpayer-funded discounts in the bills of their small business customers. Both British Gas, which supplies more than 350,000 organisations with electricity and gas, and SSE Energy Solutions, the non-domestic division of SSE that provides energy to half a million customers, said a “small number” were affected, but declined to say how many. – The Times
