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London open: Stocks rise after strong US session
London stocks rose in early trade on Friday, taking their cue from a solid session on Wall Street.
At 0820 BST, the FTSE 100 was 0.3% firmer at 7,647.25, while sterling hit its highest level against the dollar since April 2022 amid expectations of further rate hikes. The pound was up 0.1% at $1.2790.
Richard Hunter, head of markets at Interactive Investor, said: “US markets snapped back strongly as the dust settled from a Federal Reserve announcement which paused rate rises, but cautioned on the possibility of more to come. The market is still insisting on the glass half-full approach, anticipating only one more rate rise in July as opposed to the two hikes which the Fed implied earlier in the week, and the cumulative slew of economic data over recent days could just lead additional weight to that view.
“The reaction to the Wall Street performance and a generally positive session across Asia also pushed the FTSE 100 ahead in opening trade, albeit on a more pedestrian basis. Further strength in sterling acted as something of a headwind given a majority constituent exposure to overseas earnings, while increasing investor confidence elsewhere could be responsible for new money being invested in other more obvious growth markets at the expense of the domestic index.”
In equity markets, electricals retailer Currys gained after saying it is considering putting its Greek business Kotsovolos up for sale, as it kicks off a strategic review.
Supermarket giant Tesco edged down despite saying that first-quarter sales had surged 8.8%, maintaining annual guidance and pointing to “encouraging” early signs that inflation was starting to ease for customers.
ITV edged lower as the broadcaster confirmed it is in talks about the possible acquisition of All3Media, the independent production company behind The Traitors. Responding to press speculation, the broadcaster said in a brief statement that it was “actively exploring” a potential deal.
Travis Perkins tumbled after the builders’ merchant warned on profits as higher interest rates and weaker consumer confidence weighed heavily on house building. The company said it had “not seen the anticipated easing of market conditions in the second quarter to date”.
B&Q and Castorama owner Kingfisher also fell sharply.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +3.60% | +15.50 | 445.50 |
| 2 |  |
Carnival Plc | +3.32% | +36.50 | 1,136.00 |
| 3 |  |
Easyjet Plc | +2.80% | +13.80 | 506.20 |
| 4 |  |
Persimmon Plc | +1.90% | +22.50 | 1,204.50 |
| 5 |  |
Tui Ag | +1.76% | +10.50 | 607.00 |
| 6 |  |
Bt Group Plc | +1.60% | +2.15 | 136.80 |
| 7 |  |
Sse Plc | +1.44% | +26.50 | 1,864.50 |
| 8 |  |
British Land Company Plc | +1.40% | +4.70 | 339.40 |
| 9 |  |
Informa Plc | +1.26% | +9.20 | 737.60 |
| 10 |  |
Whitbread Plc | +1.21% | +41.00 | 3,441.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Kingfisher Plc | -1.57% | -3.70 | 232.30 |
| 2 |  |
Rio Tinto Plc | -1.14% | -61.00 | 5,282.00 |
| 3 |  |
Bhp Group Limited | -1.10% | -27.50 | 2,477.50 |
| 4 |  |
Barratt Developments Plc | -1.09% | -4.90 | 443.30 |
| 5 |  |
Ashtead Group Plc | -0.98% | -54.00 | 5,432.00 |
| 6 |  |
Tesco Plc | -0.83% | -2.20 | 262.30 |
| 7 |  |
Anglo American Plc | -0.78% | -20.00 | 2,560.00 |
| 8 |  |
Halma Plc | -0.55% | -13.00 | 2,333.00 |
| 9 |  |
Dcc Plc | -0.37% | -17.00 | 4,620.00 |
| 10 |  |
Compass Group Plc | -0.36% | -8.00 | 2,185.00 |
US close: Stocks advance after flurry of data
Thursday proved to be a fruitful day for Wall Street, with all of the major stock indices closing in the green, and the S&P 500 and the Nasdaq Composite closed at 14-month highs amidst a flurry of economic data.
At the close, the Dow Jones Industrial Average was up 1.26% at 34,408.06, as the S&P 500 ended the trading day ahead 1.22% at 4,425.84.
The Nasdaq Composite, populated heavily by tech stocks, gained 1.15% to close out the session at 13,782.82.
In currencies, the dollar was last 0.03% weaker against sterling to trade at 78.2p, while it slid 0.02% on the euro to 91.35 euro cents.
The greenback showed the most significant change against the yen, last falling 0.29% to change hands at JPY 139.88.
“Dollar bulls have seen their gains slip away, as the greenback reverses last night’s gains,” said IG chief market analyst Chris Beauchamp.
“The Fed might be keen to suggest it’s not on pause, but the market clearly believes otherwise – the euro is rallying hard, and gold has seen some buyers emerge once again.
“But with plenty of Fed speakers on the calendar next week an attempt to burnish the Fed’s hawkish credentials is a distinct possibility.”
Initial jobless claims unchanged as retail sales rise
In economic news, fresh data revealed unexpected steadiness in the US jobs market last week, with initial unemployment claims remaining unchanged at 262,000, according to the Department of Labor.
Economists had predicted a drop to 245,000, marking a higher than anticipated unemployment rate.
The week ended 3 June also saw an increase in ongoing unemployment claims, with 20,000 additional claims bringing the total to 1.775 million.
US consumers meanwhile maintained their spending pace in May, with data from the Department of Commerce showing a 0.3% month-on-month rise in total retail sales, amounting to $686.57bn.
The increase exceeded consensus predictions of a 0.2% decline, and surpassed April’s unrevised gain of 0.4%.
When automobile and parts sales were excluded, retail sales inched up by 0.1%, aligning with consensus.
Retail sales were 0.4% higher when petrol stations’ sales were also excluded.
Elsewhere, manufacturing activity in the mid-Atlantic region revealed a slightly higher decline than predicted in June.
The Philadelphia Federal Reserve’s regional factory index recorded a dip from April’s -10.4 to -13.7, compared to the forecasted -12.3.
The in the new orders sub-index from -8.9 to -11.0 was primarily responsible for the headline gauge’s fall.
Additionally, the prices paid sub-index slightly declined from 10.9 to 10.5, and the employment sub-index improved notably from -8.6 to -0.4.
On a positive note, the business outlook sub-index for the upcoming six months bounced back from -10.3 to 12.7.
In a surprising turn, a separate regional survey conducted by the Federal Reserve Bank of New York showed a significant rebound, registering 6.6 for June, a considerable shift from May’s -31.8 and well above consensus expectations for -15.6.
Regional banks in the green while Kroger snaps rally
In equities, fast-casual restaurant operator Cava Group rocketed 99% on its first day of trading on the New York Stock Exchange.
The company’s shares closed well above their initial public offering price of $22 per share.
Regional banks also garnered attention, with shares across the sector gaining ground by the close of Thursday.
PacWest Bancorp rose by 1.36%, and Valley National Bancorp increased by 3.06%.
On the downside, grocery heavyweight Kroger saw its shares decline 2.69%, ending a five-day rally.
Despite beating consensus on first-quarter profit and maintaining its full-year guidance, the company’s quarterly net sales fell slightly short of expectations.
Friday newspaper round-up: Energy bills, mortgage costs, WE Soda
MPs have urged the government to set out its plans to protect households from high energy bills this winter as they said about 1.7 million people, including some of the most vulnerable groups, had been left waiting too long to receive previous support. The public accounts committee (PAC) said that although schemes were introduced quickly, the government “did not have the bandwidth” to make sure help reached all groups in a timely fashion. – Guardian
The UK is in danger of being left behind in the global race to decarbonise the economy with potentially disastrous consequences for jobs and communities, according to the TUC’s general secretary. In an interview, Paul Nowak said the UK was “limping towards a green future” and he called for a “national collective effort” involving employers, workers and the government to ensure a quick and fair transition to a net zero economy. – Guardian
Three million middle class homeowners are at risk of having their savings wiped out by the recent surge in mortgage costs, a leading think-tank has warned. Analysis from the Institute for Fiscal Studies (IFS) suggests 2.9m middle income mortgage holders would exhaust their savings and be forced to ask for help to meet an unexpected expense of around £2,000. – Telegraph
American regulators are investigating Goldman Sachs over its dealings with Silicon Valley Bank in the days before the regional US lender’s collapse this spring. Both the US Federal Reserve and the Securities and Exchange Commission are looking at the investment banking group’s role in the weeks before Silicon Valley Bank’s failure, according to The Wall Street Journal, which reported that it had also been issued with a subpoena by the US Department of Justice. – The Times
The chief executive of the soda ash supplier WE Soda has suggested that the company might opt for New York instead of London if he resurrects the flotation plans that were abruptly shelved this week. In a double blow for London, WE Soda first dropped plans for a landmark £6 billion initial public offering on Wednesday. It then rubbed salt in the wound yesterday by saying that the US might be a better place to float next time. – The Times
