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London open: Stocks nudge down amid raft of corporate news
London stocks nudged a touch lower in early trade on Thursday following heavy losses in the previous session, as investors waded through a deluge of corporate news.
At 0910 GMT, the FTSE 100 was down 0.1% at 7,439.19, as market participants continued to mull recent comments from central bankers and the potential for rate cuts to come later than expected.
In equity markets, Flutter Entertainment surged to the top of the FTSE 100 despite saying that fourth-quarter revenues in the US were below guidance due to customer-friendly results. Ladbrokes owner Entain also advanced.
Currys surged as the electricals retailer said full-year profit was set to be ahead of consensus expectations despite reporting a drop in sales.
Travis Perkins racked up strong gains after the builders’ merchant and home improvement retailer reported a stabilisation of pricing in the fourth quarter and announced plans to ramp-up its cost-savings programme.
Cranswick was also a high riser as the meat producer said that adjusted pre-tax profit for the year to the end of March 2024 was set to be ahead of the board’s previous expectations after stronger-than-expected trading in the third quarter.
Specialty chemicals firm Elementis rallied as it said 2023 profit would be slightly ahead of expectations after a “resilient” fourth-quarter performance.
On the downside, B&M and Compass were among the worst performers as they traded without entitlement to the dividend.
Sage Group lost ground despite backing its expectations for the full year and posting a rise in first-quarter revenue.
Watches of Switzerland tumbled after it slashed its annual revenue guidance as demand for its luxury products fell amid the cost-of-living crisis, particularly in the UK, and said it expected volatile trading conditions to remain for the rest of its fiscal year.
Harbour Energy and Energean both slid after trading and operations updates.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | +11.59% | +1,530.00 | 14,730.00 |
| 2 |  |
Tui Ag | +2.10% | +11.00 | 535.00 |
| 3 |  |
Rolls-royce Holdings Plc | +1.65% | +4.90 | 301.50 |
| 4 |  |
Anglo American Plc | +1.54% | +27.00 | 1,777.00 |
| 5 |  |
St. James’s Place Plc | +1.35% | +8.40 | 628.60 |
| 6 |  |
Legal & General Group Plc | +1.33% | +3.20 | 243.80 |
| 7 |  |
Rio Tinto Plc | +1.19% | +64.00 | 5,446.00 |
| 8 |  |
Hargreaves Lansdown Plc | +1.08% | +7.80 | 730.80 |
| 9 |  |
Itv Plc | +1.01% | +0.60 | 59.86 |
| 10 |  |
Associated British Foods Plc | +0.89% | +20.00 | 2,271.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sage Group Plc | -2.42% | -28.00 | 1,127.50 |
| 2 |  |
Hikma Pharmaceuticals Plc | -1.98% | -39.00 | 1,926.00 |
| 3 |  |
National Grid Plc | -1.35% | -14.00 | 1,023.00 |
| 4 |  |
Compass Group Plc | -1.32% | -29.00 | 2,163.00 |
| 5 |  |
Sse Plc | -1.32% | -23.00 | 1,717.00 |
| 6 |  |
Admiral Group Plc | -1.17% | -30.00 | 2,531.00 |
| 7 |  |
Pearson Plc | -1.15% | -11.00 | 948.40 |
| 8 |  |
Centrica Plc | -1.12% | -1.60 | 141.30 |
| 9 |  |
Johnson Matthey Plc | -1.01% | -16.00 | 1,562.00 |
| 10 |  |
Ocado Group Plc | -1.00% | -5.80 | 574.20 |
US close: Rising yields, hawkish comments weigh on stocks
US stocks fell on Wednesday as bond yields rose on the back of resilient economic data, with central bankers in both the States and Europe doing their best to temper expectations for imminent cuts to interest rates.
Stronger-than-expected retail sales, mortgage applications and housing market data hit government bonds and “diminished the urgency for the Federal Reserve to initiate a policy rate cut as early as March”, said Stephen Innes, managing partner at SPI Asset Management.
The 10-year US bond yield was up 4.1 basis points at 4.108%, touching a high of 4.133% earlier in the session – its highest level in over a month.
The Dow declined for the third straight day, falling 0.3%, while the S&P 500 and Nasdaq both dropped 0.6%.
Tuesday’s comments from Fed governor Christopher Waller were continuing to weigh on investors’ minds, after he said that he saw “no reason to move as quickly or cut as rapidly as in the past” in response to recent declines in inflation.
Meanwhile, in an interview with Bloomberg News on Wednesday, European Central Bank president Christine Lagarde appeared to indicate that the ECB would start cutting rates by the summer, but acknowledged that it’s her job to be more “reserved” than other policymakers. “We are data dependent, and then there is still a level of uncertainty, and some indicators that are not anchored at the level where we would like to see them,” she said.
“With doves getting their wings clipped, this week has seen a shake-up in sentiment, as a combination of factors, including a tight job market, inflation surpassing targets, resilient consumer spending, and a more hawkish-leaning commentary from the Fed indicates that central banks may not be so eager to loosen policy,” Innes said.
“Consequently, rate cut expectations are being pushed out further, dashing hopes for a New Year rally party as central banks adopt a more inflation-wary stance.”
US data comes in strong
US retail sales rose 0.6% during the month of December, according to the Census Bureau, beating forecasts of 0.4% for the biggest increase in three months. December’s increase was principally driven by sales of autos, which were up 1.2%. For the year as a whole, unadjusted retail sales increased 3.2%
US mortgage applications surged by 10.4% in the week ended 12 January, the biggest increase in 12 months, according to the Mortgage Bankers Association of America, on the back of lower mortgage rates. The increase came after a 9.9% jump the previous week. Applications to purchase a new home rose by 9%, while applications to refinance a home loan jumped by 11%.
The National Association of Housebuilders’ housing market index rose to 44 in January, up from 37 in the previous month, extending its rebound from a low touched in November and firmly above market expectations for a reading of 39.
In other news, December’s import prices remained unchanged at 139.50 points in December, according to the Bureau of Labor Statistics, while industrial production increased 1% year-on-year in December, according to the Federal Reserve, the biggest rise since January 2023.
Spirit-Jetblue merger called off
Shares in airline stocks Spirit Airlines and Jetblue Airways were flying lower after a judge ruled that their planned merger would be anti-competitive and negative for “cost-conscious travellers”.
The Justice Department, which had been against the tie-up, said the decision was a “victory for tens of millions of travellers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward”.
Broker comments were moving a lot of share prices today. Instacart jumped after an upgrade to outperform from Wolfe; SolarEdge Technologies fell following a downgrade by Barclays to underweight; Ford slipped after UBS lowered its rating to neutral; Morgan Stanley was hit with a recommendation cut to neutral by JPMorgan; while Visteon was lifted by a UBS upgrade to buy.
US banks were mostly lower as the market continued to digest the recent barrage of quarterly earnings from the sector, with Morgan Stanley, Goldman Sachs, Citigroup and Bank of America all firmly in the red.
Thursday newspaper round-up: Housing market, Tata Steel, electric cars
The housing market has had some “respite” in recent weeks as activity picked up amid easing mortgage rates after a challenging 2023, according to surveyors. Inquiries from new buyers are approaching a flatter trend, after falling in recent months, according to the December report from the Royal Institution of Chartered Surveyors (Rics). – Guardian
Concern is mounting that Tata Steel will confirm plans to shut down much of its production at the Port Talbot steelworks during a crunch meeting with trade unions, putting thousands of jobs at risk. Three sources said they believed that Tata, owned by the Indian billionaire Ruia brothers, was on the brink of confirming plans to close Port Talbot’s two blast furnaces, ending more than a century of making steel from scratch in south Wales. – Guardian
Electric cars lose as much as half of their value after just three years on the road, new figures show, as the rate of depreciation far outstrips conventional equivalents. Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone. – Telegraph
Chinese brands will launch a price war and will capture a sixth of the UK electric car market by 2030, according to Auto Trader. With BYD, China’s largest electric car manufacturer, having overtaken Tesla as the world leader in zero-emission vehicles and with Shanghai Automotive’s MG brand already out-selling Volkswagen and BMW in the segment in Britain, a new order is coming, according to the online car-buying platform’s latest The Road to 2030 report. – The Times
Britons doubled their spending on bowling in December compared with the same month a year ago, according to Lloyds Bank. People also spent more on booking holidays last month, with demand for cruises up by more than a quarter compared with December 2022, the high street lender said. – The Times
