Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
London open: Stocks edge up ahead of Autumn Statement
London stocks rose in early trade on Wednesday, but gains were muted as investors eyed the Autumn Statement.
At 0820 GMT, the FTSE 100 was up 0.2% at 7,499.76.
Chancellor Jeremey Hunt is due to deliver his statement at around 1230 GMT, after Prime Minister’s Questions.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Investors will be highly attuned to what the Chancellor plans as part of that recipe and tax cuts now look set to be a key ingredient, even though they risk turning up the heat on inflation.
“With borrowing this fiscal year coming around £17 billion under forecasts, cuts to national insurance are now mooted. This tax has been all over the place in recent years, with a hike followed by cuts in rapid succession. A further cut, if it comes, will make a difference to the money in people’s pockets. But increasing spending power also ups the inflationary risks just as the Bank of England is warning about the stubborn nature of the price spiral.
“The other tax rabbit which looks set to be pulled out of the chancellor’s hat is for full expensing for businesses to be made permanent. This was a temporary measure brought in allowing firms to set 100% of their capital expenditure off against tax immediately. If it is, as rumoured made permanent it should not only help with immediate cash flow but also enable businesses to make commitments stretching far further into the future, particularly given the imminent hike in corporation tax.
“A shake up in ISAs, the tax wrappers of savings and stocks and shares investments, would also be highly welcome with a big consultation expected to be launched. This should provide a boost for UK-listed companies and a potential reboot for London. Ministers are keen to clearly want to inject a big dose of energy into the City, but just how it’s approached could make all the difference. A rise in the ISA allowance level in line with inflation, would be an effective shot in the arm for retail investors, especially those hit by cuts in the allowances for dividends and capital gains tax.”
In equity markets, Johnson Matthey gained as it raised the outlook for its full-year underlying operating performance despite posting a drop in first-half sales and profit due to lower precious metal market prices.
Sage Group rallied as it reported an 18% jump in full-year underlying operating profit, lifted its dividend and announced a share buyback programme of up to £350m.
Construction materials group Breedon was in the black as it hailed a “strong” performance in the 10 months to the end of October and said the outlook for the full year was ahead of expectations.
On the downside, B&Q and Castorama owner Kingfisher slumped as it cut its profit guidance for the second time owing to continued market weakness in France.
The company, which also owns Screwfix in the UK and a host of other DIY brands across Europe, said adjusted pre-tax profit for the year ending January 2024 will now come in at around £560m, compared with £758m the year before. In September, the company had slashed its guidance from £634m to £590m.
Severn Trent lost ground as it posted a decline in interim profit but backed its full-year expectations.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sage Group Plc | +10.56% | +105.30 | 1,102.50 |
| 2 |  |
Johnson Matthey Plc | +1.71% | +25.00 | 1,484.00 |
| 3 |  |
Diageo Plc | +1.43% | +40.00 | 2,838.50 |
| 4 |  |
Compass Group Plc | +1.42% | +29.00 | 2,077.00 |
| 5 |  |
Bt Group Plc | +1.36% | +1.60 | 119.65 |
| 6 |  |
International Consolidated Airlines Group S.a. | +1.35% | +2.10 | 157.55 |
| 7 |  |
Segro Plc | +1.11% | +9.00 | 818.40 |
| 8 |  |
Croda International Plc | +1.08% | +49.00 | 4,586.00 |
| 9 |  |
Land Securities Group Plc | +1.06% | +6.80 | 646.60 |
| 10 |  |
Dcc Plc | +0.94% | +50.00 | 5,368.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Kingfisher Plc | -6.59% | -15.20 | 215.40 |
| 2 |  |
Rentokil Initial Plc | -1.30% | -6.00 | 456.20 |
| 3 |  |
Tui Ag | -1.05% | -5.30 | 497.20 |
| 4 |  |
Direct Line Insurance Group Plc | -0.95% | -1.80 | 188.00 |
| 5 |  |
Itv Plc | -0.87% | -0.52 | 59.58 |
| 6 |  |
Hsbc Holdings Plc | -0.75% | -4.60 | 608.70 |
| 7 |  |
Gsk Plc | -0.71% | -10.00 | 1,407.40 |
| 8 |  |
Shell Plc | -0.69% | -18.00 | 2,595.00 |
| 9 |  |
St. James’s Place Plc | -0.47% | -3.20 | 671.00 |
| 10 |  |
Marks And Spencer Group Plc | -0.44% | -1.10 | 251.20 |
US close: Stocks slip after FOMC minutes, mixed retail earnings
US stocks declined on Tuesday with the S&P 500 snapping a five-day winning streak after minutes of the latest monetary policy meeting showed that officials are in no rush to start cutting interest rates.
The Dow Jones Industrial Average finished 0.18% lower, the S&P 500 fell 0.20% while the Nasdaq dropped 0.59%.
The Federal Open Market Committee (FOMC) meeting on 1 November showed revealed discussions about leaving policy “at a restrictive stance for some time” until inflation moves down sustainably to the 2% target.
“The Fed has not completely ruled out additional rate hikes, noting that further tightening would be appropriate ‘if’ progress towards the 2% inflation target was ‘insufficient’, said Michael Pearce, economist at Oxford Economics.
“However, the minutes made clear that the Fed is taking a cautious approach, with participants generally judging that the risks had ‘become more two-sided’.”
Oxford Economics predicts that the first interest-rate cut will not come until the September 2024 meeting, later than what is priced into financial markets.
Elsewhere on the macro front, the Chicago Federal Reserve’s national activity index fell to -0.49 in October, down from -0.2 in September and its lowest reading for the last seven months.
On another note, existing-home sales dropped by 4.1% last month to 3.79m, from 3.96m in September. Analysts were expecting a smaller fall to 3.90m. Compared with October 2022, sales were down 14.6% from 4.44m.
Markets react to retail earnings
Dick’s Sporting Goods lifted its full-year outlook on Tuesday following a “strong” third quarter, driving shares 3% higher. The US retailer – which cut its full-year profit guidance in August – said third-quarter comparable store sales rose 1.7%, and raised the outlook for 2023 to a range of 0.5% to 2% growth, having previously forecast sales would be flat to 2% higher.
In contrast, shares in US home improvement retailer Lowe’s were in the red after it forecasted a 5% full-year sales decline compared to its previous estimate of 2% to 4%. The guidance came as it reported a 7.4% decline in third-quarter comparable sales, due to reduced spending on DIY discretionary projects.
Meanwhile, Kohl’s and American Eagle Outfitters both tanked after disappointing the market with weak full-year guidance, while Burlington Stores surged after upping its full-year profit targets.
Meanwhile, Amazon was lower on the back of market chatter that founder Jeff Bezos would be selling a significant number of shares.
Wednesday newspaper round-up: Wimbledon, Binance, Nvidia
Tax officials are understood to be examining whether David Cameron failed to fully disclose taxable perks such as flights on private planes when he worked for the collapsed lender Greensill Capital, the Guardian can reveal. In particular, officials are said to be looking at a number of flights that took off or landed near his house in Oxfordshire and also in Cornwall, where the foreign secretary has a holiday home. They are also examining an offshore trust that it is understood was created by Greensill to pay him extra benefits. – Guardian
A London council has rejected plans to build a new 8,000-seat stadium and 38 further tennis courts on a Grade II*-listed park in Wimbledon. Wandsworth council’s planning committee on Tuesday night voted unanimously to reject the All England Lawn Tennis Club’s plans to almost triple the size of the tennis championship grounds from 17 hectares (42 acres) to 46 hectares. – Guardian
Civil service bureaucracy is acting “like a tax” on the economy and must be overhauled to close a £50bn-a-year investment gap between the UK and other rich nations, according to a major government review. Lord Harrington, who was commissioned by Jeremy Hunt to lead a report into UK foreign direct investment (FDI), will warn on Wednesday that a revolving door of senior ministers and “willing amateur” civil servants are holding back the economy. – Telegraph
The boss of the world’s biggest cryptocurrency exchange has pleaded guilty to money-laundering charges and will pay a $50 million fine as part of a $4 billion-plus settlement to resolve a lengthy inquiry by American prosecutors. Changpeng Zhao, 46, the co-founder and chief executive of Binance, will step down from the company and will plead guilty to breaking criminal laws in a deal with the US justice department as part of a large settlement between the exchange and other agencies, including the Commodity Futures Trading Commission and the US Treasury. – The Times
Investors in Nvidia cashed in profits last night despite the chip producer’s third-quarter results impressively beating forecasts on Wall Street. The stock, which has risen by almost 250 per cent since the start of the year, dipped 4 per cent immediately after the company said its revenue had risen to $18.12 billion in the three-month period, outstripping analysts’ predictions of $16.18 billion and representing an increase of 206 per cent from only a year ago. The selling spree was brief, however, and the shares pared early losses. They were down 0.8 per cent, or $3.69, at $495.55 in after-hours trading last night. – The Times
