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London open: Stocks gain as investors mull China GDP, UK jobs data
London stocks rose in early trade on Tuesday, underpinned by solid updates from the likes of Entain and easyJet, as investors mulled the latest UK jobs data and better-than-expected Chinese GDP figures.
At 0905 BST, the FTSE 100 was up 0.3% at 7,899.69.
Data out earlier showed that headline GDP growth in China rose to 4.5% in the first quarter from 2.9% in the final quarter of last year, beating expectations for 4% growth.
Capital Economics said: “This partly reflects a weak base for comparison – virus disruptions were spreading at the end of Q1 last year. But growth also jumped in seasonally-adjusted q/q terms, from an upwardly revised 0.6% in Q4 to 2.2% in Q1. This leaves output 6.8% higher than during the recent trough in Q2 2022. As such, headline GDP growth is on course to exceed 7.0% this quarter.”
On home shores, data from the Office for National Statistics showed the unemployment rate ticked higher in the three months to February.
The unemployment rate nudged 0.1 percentage points higher to 3.8%. This was driven by people unemployed for up to six months, the ONS said. Analysts had been expecting the rate to be steady.
Meanwhile, the employment rate came in at 75.8%, up 0.2 percentage points on the previous three-month period. The ONS put this down to part-time employees and self-employed workers.
The data also showed that the number of vacancies fell by 47,000 on the quarter to 1,105,000. This was the ninth consecutive decline and reflects “uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment,” he ONS said.
The ONS said growth in regular pay excluding bonuses was 6.6% in December to February, while growth in total pay including bonuses was 5.9%. In real terms, however, regular pay fell by 2.3% and total pay was 3% lower.
In equity markets, miners were on the front foot after the Chinese data, with Glencore, Anglo American and Antofagasta all racking up strong gains.
Entain rallied after the Ladbrokes owner hailed a “strong” start to 2023, as it posted a 15% jump in first-quarter net gaming revenue amid record levels of active customers.
Mitie surged after the outsourcing specialist said it expected operating profit to beat guidance after replacing all its Covid-related contract revenue, and announced a £50m share buyback.
Low-cost airline easyJet flew higher after saying it expects to beat market expectations for annual profits due to high demand and strong summer bookings after slashing losses in the first six months of the current year. The company said its headline pre-tax loss was now expected to be £405 – £425m despite challenges from higher fuel prices and inflation. It forecast summer bookings to return to pre-Covid pandemic levels after ramping up crew numbers.
Transact owner IntegraFin was also trading up after well-received second-quarter results.
On the downside, housebuilders Persimmon, Taylor Wimpey and Berkeley fell on the back of a cautious research note by JPMorgan.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | +3.74% | +29.00 | 805.20 |
| 2 |  |
Easyjet Plc | +2.82% | +14.40 | 525.40 |
| 3 |  |
Antofagasta Plc | +2.64% | +42.50 | 1,650.50 |
| 4 |  |
Anglo American Plc | +2.47% | +67.00 | 2,778.50 |
| 5 |  |
Melrose Industries Plc | +2.29% | +3.75 | 167.55 |
| 6 |  |
Glencore Plc | +1.74% | +8.50 | 497.50 |
| 7 |  |
Barclays Plc | +1.56% | +2.40 | 156.68 |
| 8 |  |
Burberry Group Plc | +1.55% | +40.00 | 2,621.00 |
| 9 |  |
Rolls-royce Holdings Plc | +1.42% | +2.15 | 153.15 |
| 10 |  |
Legal & General Group Plc | +1.37% | +3.40 | 252.40 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tui Ag | -2.18% | -12.00 | 537.60 |
| 2 |  |
Centrica Plc | -1.70% | -1.95 | 112.55 |
| 3 |  |
Severn Trent Plc | -1.41% | -41.00 | 2,872.00 |
| 4 |  |
Sse Plc | -1.21% | -22.00 | 1,803.50 |
| 5 |  |
Compass Group Plc | -1.20% | -25.00 | 2,050.00 |
| 6 |  |
United Utilities Group Plc | -1.16% | -12.50 | 1,065.00 |
| 7 |  |
Taylor Wimpey Plc | -0.93% | -1.15 | 122.00 |
| 8 |  |
National Grid Plc | -0.80% | -9.00 | 1,109.50 |
| 9 |  |
Unilever Plc | -0.79% | -34.50 | 4,322.50 |
| 10 |  |
Halma Plc | -0.71% | -16.00 | 2,244.00 |
US close: Stocks higher as traders await earnings
Wall Street stocks closed higher on Monday as market participants braced for a week full of quarterly earnings reports.
At the close, the Dow Jones Industrial Average was up 0.30% at 33,987.18, while the S&P 500 advanced 0.33% to 4,151.32 and the Nasdaq Composite saw out the session 0.28% firmer at 12,157.72.
The Dow closed 100.71 points higher on Monday, taking a bite out of losses recorded in the previous session as traders digested earnings from a number of major US banks.
Earnings will continue to dictate investor sentiment this week, with heavyweights Bank of America and Morgan Stanley publishing their latest quarterly figures on Tuesday and Wednesday, respectively, while outside of the banking sector, Netflix earnings will be on deck tomorrow, Tesla will publish its results on Wednesday, and Procter & Gamble will update on recent trading on Friday.
On the macro front, the Federal Reserve‘s NY Empire State manufacturing index unexpectedly rose to 10.8 in April, up from -24.6 in March and smashing forecasts for a print of -18. The print marked the first increase in manufacturing in New York state in five months and the strongest since July 2022.
Elsewhere, the National Association of Home Builders/Wells Fargo housing market index increased to 45 in April, a fourth straight month of growth and the highest level seen since September 2022. The current sales gauge rose to 51 from 49, while sales expectations in the next six months increased to 50 from 47, and traffic of prospective buyers remained flat at 31.
Tuesday newspaper round-up: Prepayment meters, food prices, EY, Glencore
Energy suppliers have agreed to a ban on forcibly installing prepayment meters in the homes of customers over 85 and will make representatives wear body cameras as part of a new code of conduct, the Guardian can reveal. Suppliers have agreed to fresh guidelines for putting in the devices when households have run up energy debt after an outcry over agents using court-approved entry warrants to break in to install them. – Guardian
The price of staple foods such as cheddar cheese, white bread and pork sausages has soared by up to 80% in some shops over the past year, in further evidence of how inflation is hitting those on the tightest budgets the hardest. Porridge oats topped the price increase ranking among a basket of British basics measured by the consumer group Which?, with prices up by an average of 35.5% followed by skimmed milk, which was up by 33.6%, and cheddar cheese, which rose by 28.3%. – Guardian
Auditor EY plans to cut 3,000 US jobs following a failed attempt to separate its consulting and accountancy arms. The decision to reduce around 5pc of its American workforce comes after EY identified “overcapacity” in parts of the firm as it attempted to cut costs. “After assessing the impact of current economic conditions, strong employee retention rates and overcapacity in parts of our firm, we have made the difficult business decision to separate approximately 3,000 US employees,” an EY spokesman said. – Telegraph
Glencore’s bid for the copper miner Teck Resources has come under renewed pressure after Legal & General supported rival proposals. The asset manager has opted to vote for Teck’s pre-existing plan to spin off its coal assets rather than lend support for a $23 billion merger of Glencore with its Canadian rival. – The Times
Most logistics companies cannot consider decarbonising their lorries because of a lack of infrastructure, says the trade body representing manufacturers. Analysis by the Society of Motor Manufacturers and Traders found there is not a single dedicated electric charging or hydrogen refuelling site for heavy goods vehicle on Britain’s major roads. – The Times
