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London open: Stocks edge up as attention shifts to US data
London stocks edged higher in early trade on Thursday as investors shifted their attention to upcoming US data releases.
At 0830 BST, the FTSE 100 was up 0.3% at 7,588.02.
CMC Markets analyst Michael Hewson said: “The next few days are likely to be a key test of this stabilisation with some key US inflation data tomorrow and next week’s US jobs data for March.
“Before that we have the final iteration of US Q4 GDP which is expected to see a modest revision upwards to 2.8% from 2.7%, which would be a modest slowdown from the 3.2% seen in Q3. Core PCE for Q4 is expected to remain steady at 4.3%.”
The US GDP figures are due at 1330 BST.
On home shores, investors were digesting data showing that car production jumped last month as supply chain shortages eased and demand for electric vehicles strengthened.
According to the Society for Motor Manufacturers and Traders, UK car production rose 13.1% year-on-year to 69,707 units. The trade body said volumes had been “buoyed” by improvement in supply chains, particularly around semiconductors.
Strong demand for electric cars also helped, with the number of hybrid, plug-in hybrid and battery electric vehicles produced in total rising to 27,392 from 15,905 a year previously.
A total of 56,634 cars were made for export, or for 81.2% of output, up from 50,786 a year previously. Most headed to the European Union, with strong demand from the bloc helping to offset falls in exports to the US and China, down 19.1% and 21.6% respectively.
Mike Hawes, SMMT chief executive, said: “February’s growth in UK car production signposts an industry that is on the road to recovery. The fundamentals of the sector are strong.
“The take advantage of global opportunities, however, we must scale up at pace and make the UK the most attractive destination for automotive investment by addressing trading and fiscal costs and delivering low carbon, affordable energy.”
In equity markets, energy firm SSE rallied after it lifted its full-year earnings per share guidance as it hailed a strong performance from its flexible generation plant. It now expects adjusted EPS of more than 160p per share for the full-year 2022/23, up from previous guidance of more than 150p.
Elsewhere, Tritax Big Box was boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg.
Outside the FTSE 350, Petrofac rocketed after saying that it and Hitachi Energy had been awarded a €13bn framework agreement by Dutch-German electricity grid operator TenneT. The agreement is the largest in Petrofac’s history.
Moonpig was also a high riser after the online greeting cards and gift retailer backed its full-year guidance, citing a record Mother’s Day performance.
On the downside, Drax tumbled after the UK government’s carbon capture program rejected its project to introduce the technology at a power plant in England.
North Sea oil and gas producer Ithaca Energy was weaker after it lowered annual production and capital expenditure guidance, citing the UK government’s windfall tax operational delays and lower volumes despite almost trebling profits in 2022.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +6.57% | +31.40 | 509.40 |
| 2 |  |
Carnival Plc | +4.00% | +28.00 | 728.60 |
| 3 |  |
Marks And Spencer Group Plc | +3.22% | +5.15 | 164.85 |
| 4 |  |
Easyjet Plc | +3.13% | +15.40 | 507.60 |
| 5 |  |
Sse Plc | +3.05% | +53.00 | 1,790.50 |
| 6 |  |
Land Securities Group Plc | +2.88% | +17.20 | 613.80 |
| 7 |  |
Segro Plc | +2.86% | +21.00 | 754.00 |
| 8 |  |
British Land Company Plc | +2.83% | +10.60 | 384.70 |
| 9 |  |
International Consolidated Airlines Group S.a. | +2.81% | +4.02 | 147.10 |
| 10 |  |
Barclays Plc | +2.77% | +3.94 | 145.96 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tui Ag | -4.12% | -29.00 | 675.40 |
| 2 |  |
Phoenix Group Holdings Plc | -3.60% | -20.40 | 546.40 |
| 3 |  |
Aviva Plc | -3.31% | -13.90 | 406.20 |
| 4 |  |
Taylor Wimpey Plc | -2.88% | -3.50 | 117.85 |
| 5 |  |
Mondi Plc | -1.80% | -23.50 | 1,281.00 |
| 6 |  |
Smith & Nephew Plc | -0.94% | -10.50 | 1,110.00 |
| 7 |  |
Unilever Plc | -0.64% | -27.00 | 4,180.00 |
| 8 |  |
British American Tobacco Plc | -0.59% | -17.00 | 2,858.00 |
| 9 |  |
Vodafone Group Plc | -0.52% | -0.47 | 89.36 |
| 10 |  |
Bae Systems Plc | -0.49% | -4.80 | 981.60 |
US close: Tech shares lead a positive session
Wall Street indices closed higher after a positive session on Wednesday, with the tech sector leading the way as banking sector fears took a back seat.
The Dow Jones Industrial Average gained 1% to close at 32,727.60, while the S&P 500 rose 1.42% to 4,027.81.
The technology-heavy Nasdaq Composite was ahead 1.79%, ending the day at 11,926.24.
In the currency space, the dollar was last down 0.01% against sterling at 81.2p, while it was unchanged on the euro at 92.22 euro cents.
It slipped 0.1% against the yen, meanwhile, to change hands at JPY 132.73.
“Stocks have made further gains today after a mixed session yesterday, and the continued absence of any fresh banking crisis is another big tick in the risk-on column,” said IG chief market analyst Chris Beauchamp earlier.
“Oil continues to clamber back from the March lows, but it is far from clear whether this short-covering rebound can be sustained in the medium-term.
“Demand forecasts haven’t really picked up, and with no sign of any production cuts coming the overall bearish environment still seems to prevail for now.”
Housing market showing signs of recovery
In economic news, the US housing market showed signs of continued strength this week, with both mortgage applications and pending home sales rising.
According to data from the Mortgage Bankers Association of America, mortgage applications increased 2.9% in the week ended 24 March, marking the fourth consecutive week of increases and the longest winning streak in four years.
The rise was driven by a 4.8% increase in applications to refinance a home loan and a 2% increase in applications to purchase a home loan.
Meanwhile, pending home sales unexpectedly rose in February, growing for the third consecutive month, according to data from the National Association of Realtors.
The index for pending home sales ticked up by 0.8% on the month, exceeding expectations for a 2.3% decline.
However, on a year-over-year basis, pending home sales fell by 21.1%.
Regionally, the Northeast saw the biggest monthly gain in pending home sales, rising by 6.5% to 72.5, but was down 17% from February 2022.
The Midwest saw a modest monthly increase of 0.4% to 84.9, but was down 16.5% from last year.
The South also posted a monthly increase of 0.7% to 99.3, but was down 21.7% on a year-over-year basis.
Finally, the West index fell by 2.4% on the month to 64.6, and was down 28.4% from last year.
“After nearly a year, the housing sector’s contraction is coming to an end,” said NAR chief economist Lawrence Yun.
“Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months.”
Yun explained that the more affordable US regions – the Midwest and the South – were leading the recovery.
“Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market.
“While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available.”
Lululemon surges, technology plays finish higher
In equities, Lululemon Athletica soared 12.72%, following its announcement that it had beaten adjusted earnings and revenue estimates.
Micron Technology also posted gains, closing up 7.19% after it reported better-than-expected second-quarter numbers.
Finally, luxury electric carmaker Lucid Group saw its shares rise 1.99%, after it announced late on Tuesday that it was planning to shed around 1,300 employees.
Thursday newspaper round-up: SVB, Royal Mail, listing rules
People in Britain have more confidence in the EU than the UK parliament, reversing a state of affairs that has lasted for more than 30 years, research reveals. Since the UK voted for Brexit, the proportion of people declaring confidence in parliament has slumped by 10 percentage points to 22% while there has been a seven percentage point rise in confidence in the Brussels-based bloc, to 39%. Confidence in the UK government also fell from 2017 to 2021. – Guardian
The Welsh government is to press ahead with plans for a visitor levy on tourists who stay in the country overnight. Legislation allowing local authorities to introduce a levy will be put to the Senedd, the Welsh parliament, within this government’s term. Some tourism organisations have criticised the plan, calling it a misguided “bed tax” that risks discouraging people from visiting. – Guardian
The collapse of Silicon Valley Bank highlighted failures by executives and regulators, according to a senior official at the US Federal Reserve. “I think that any time you have a bank failure like this, bank management clearly failed, supervisors failed and our regulatory system failed,” Michael Barr, vice-chairman for supervision at the Fed, told Congress yesterday. “We’re looking at all of that.” – The Times
The City regulator is pressing ahead with a plan to shake-up the stock market listing regime amid fears that London is losing business to overseas financial centres. The Financial Conduct Authority said yesterday that it would start a consultation on its proposal to simplify the rules by replacing the premium and standard segments of the London market with a single category. – The Times
The union representing Royal Mail’s frontline staff is on the verge on announcing new strike dates, Sky News understands, should a final push to end their long-running dispute fail. A Communication Workers Union (CWU) source said talks at the conciliation service Acas were scheduled for Thursday but fresh walkouts could be called the following day should substantial progress not be achieved. – Sky News
