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London open: Stocks edge down ahead of ECB, US GDP data
London stocks nudged lower in early trade on Thursday as investors eyed the latest policy announcement from the European Central Bank and US GDP data.
At 0855 GMT, the FTSE 100 was down 0.1% at 7,517.14.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has drifted lower in early trade as uncertainty reigns about the trajectory of interest rates in Europe, with exuberance from the Wall Street party not making a mark.
“As attacks in the Red Sea continue, geopolitical concerns are still bubbling, and there are not many fresh cues to help propel stocks higher in Europe.
“Policymakers at the European Central Bank are expected to sit on their hands and keep interest rates on hold, and an immobile stance through the year looks increasingly likely, given some of their recent comments. Investors will be highly attuned to the latest assessment of inflation and growth prospects from President Christine Lagarde. Even though there is has been a rapid slowdown in price increases, and weakness is pervading economies, the ECB is concerned that underlying price pressures in services remain strong and the effect of the Red Sea diversions on goods has not yet played out.”
The ECB rate announcement is due at 1315 GMT, while fourth-quarter US GDP figures and initial jobless claims are at 1330 GMT.
In equity markets, St James’s Place slid as its fourth-quarter net inflows missed estimates, while online trading platform IG Group lost ground as it reported a drop in interim revenues and profits, citing softer market conditions.
Wizz Air flew lower after the airline said losses widened in the third quarter.
Victrex and Pennon were both in the red as they traded without entitlement to the dividend.
On the upside, Intermediate Capital gained as it reported a jump in assets under management.
Equipment rental firm Ashtead advanced after solid fourth-quarter results from US peer United Rentals.
Iconic bootmaker Dr Martens rallied as it held full-year guidance after third-quarter revenues slumped by a fifth, driven by a poor performance in the US and from its wholesale channel.
Haleon ticked up as it announced the sale of its ChapStick brand for $430m.
Elementis surged following a report that KPS Capital Partners recently explored a bid for the specialty chemicals firm. According to Reuters, the New York-based private equity firm in December submitted an offer valuing the company at about 160p per share, but the Elementis board wanted around 180p.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smurfit Kappa Group Plc | +2.09% | +62.00 | 3,028.00 |
| 2 |  |
Mondi Plc | +1.75% | +25.00 | 1,454.50 |
| 3 |  |
Ashtead Group Plc | +1.40% | +68.00 | 4,932.00 |
| 4 |  |
Direct Line Insurance Group Plc | +1.33% | +2.25 | 171.65 |
| 5 |  |
Shell Plc | +1.30% | +31.00 | 2,410.00 |
| 6 |  |
Bp Plc | +1.30% | +5.90 | 458.85 |
| 7 |  |
Easyjet Plc | +1.15% | +6.00 | 526.20 |
| 8 |  |
Admiral Group Plc | +0.96% | +24.00 | 2,526.00 |
| 9 |  |
Compass Group Plc | +0.71% | +15.00 | 2,135.00 |
| 10 |  |
Smith (ds) Plc | +0.63% | +1.80 | 286.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
St. James’s Place Plc | -6.92% | -46.80 | 629.20 |
| 2 |  |
Standard Chartered Plc | -2.10% | -12.80 | 596.60 |
| 3 |  |
Fresnillo Plc | -2.08% | -10.40 | 490.80 |
| 4 |  |
Scottish Mortgage Investment Trust Plc | -1.59% | -12.40 | 768.20 |
| 5 |  |
Melrose Industries Plc | -1.39% | -8.20 | 583.20 |
| 6 |  |
Auto Trader Group Plc | -1.34% | -9.80 | 720.60 |
| 7 |  |
Ocado Group Plc | -1.25% | -7.20 | 569.20 |
| 8 |  |
Anglo American Plc | -1.20% | -22.40 | 1,838.40 |
| 9 |  |
Hikma Pharmaceuticals Plc | -1.18% | -23.00 | 1,925.00 |
| 10 |  |
Bt Group Plc | -1.16% | -1.35 | 114.85 |
US close: Dow falls but S&P 500 hits another record
Stocks finished mixed on Wednesday with the Dow slipping into the red by the close, but the S&P 500 notching its fourth straight record close, helped by strong earnings from Netflix and Freeport-McMoRan, along with improving service-sector data.
After starting out strongly, the Dow fell 0.26% by the closing bell, pulling back for the second consecutive session after hitting an all-time high earlier in the week. However, the S&P 500 edged 0.8% higher to another all-time high of 4,868.55, the Nasdaq gained 0.36%, with the Nasdaq 100 setting a fresh record.
“US markets have continued their positive momentum, opening at new record highs for both the Nasdaq 100 and S&P 500, fuelled by optimism over the latest earnings numbers after Netflix comfortably beat expectations on its Q4 earnings numbers,” said analyst Michael Hewson from CMC Markets.
Sentiment on Wall Street was also helped by a much stronger-than-forecast reading from the S&P Global US services PMI which grew to its highest level in seven months. The PMI rose to 52.9 in January from 51.4 in December, beating the 51.0 consensus estimate.
Elsewhere markets across Asia and Europe were broadly higher on Wednesday after China’s central bank said it would cut the amount of cash lenders must hold in the latest move designed to bolster the country’s ailing economy. That followed Tuesday’s news that Beijing is considering a £220bn rescue package for Chinese stock markets, which have struggled compared to other benchmarks worldwide.
In other news, the Bank of Canada kept interest rates at 5%, as largely expected, and reiterated expectations of a soft landing and for inflation to come back down to its 2% target by late 2025.
Netflix tops the risers
Netflix, which published its quarterly results after the bell on Tuesday, was up 11% as the streaming giant reported that subscriber numbers increased by 13.1m in the fourth quarter to 260.3m, as revenue growth of 12.5% year-on-year beat analysts’ forecasts.
Miner Freeport-McMoRan jumped 4% after the fourth-quarter year-on-year decline in earnings wasn’t as bad as feared: EPS fell to 27 cents from 48 cents a year earlier, better than the 23 cents forecast. Sales were up 2.6% at $5.91bn, also higher than expected, due to rising copper demand and higher gold prices.
Telecoms group AT&T fell 3% despite beating forecasts with its full-year results, as it guided to weaker-than-expected earnings for 2024 due to higher depreciation charges. Abbott Laboratories also failed to impress the market with shares slipping 3% after issuing underwhelming guidance.
Microsoft rose 1% with its market cap briefly surpassing the $3trn mark for the first time in history.
Meanwhile, Tesla, IBM and Lam Research were all in focus with their earnings scheduled after the closing bell. Tesla is the first to report from the so-called Magnificent Seven tech stocks, “which carry a huge amount of weight on their backs and the excitement around the future profitability of AI advances have helped them deliver many an expectation beating earnings update”, said Danni Hewson, head of financial analysis at AJ Bell.
Thursday newspaper round-up: Telegraph, AstraZeneca, Boeing
The government has said it intends to launch a second investigation into the Barclay family’s complex deal to transfer control of the Telegraph, after its Abu Dhabi-backed consortium partner revealed a last-minute corporate structure change that has raised public interest concerns. The culture secretary, Lucy Frazer, said she was “minded to” issue a new public interest intervention notice (PIIN) to call in the regulators Ofcom and the Competition and Markets Authority (CMA) to look at RedBird IMI’s move to create a new UK holding company to house the Telegraph and its sister magazine, The Spectator, when it takes control of the titles. – Guardian
Despite putting a new vehicle on the market, announcing another for 2025 and beating Wall Street’s expectations for vehicle deliveries, Tesla was not able to shake off its disappointing third quarter. The electric vehicle manufacturer brought in $25.1bn in revenue and posted $.71 in earnings a share in the fourth quarter of 2023, missing analyst expectations of 25.76bn in revenue and $0.74 earnings a share. The company’s fourth quarter revenue increased 3% year over year from $24.3bn in 2022. – Guardian
UK electricity prices have risen faster than almost any other developed country since 2019, the International Energy Agency (IEA) has found. Soaring wholesale costs and an increase in net zero levies have led to British households paying more for their power, as they now face the third highest prices in Europe. – Telegraph
AstraZeneca is seeking up to £100 million in government support to expand a vaccine production facility in northwest England. In a potential boost for both British manufacturing and the life sciences sector, the UK’s most valuable public company plans to submit a formal application next month to gain access to public funding to help to develop its nasal flu vaccines plant in Speke, near Liverpool. – The Times
The boss of Boeing said yesterday that the manufacturer would support the operation of its aircraft only if it was “100 per cent” confident in their safety after a federal regulator grounded some of its 737 Max 9 fleet. Dave Calhoun, the company’s chief executive, who was in Washington for meetings with senators, said: “We don’t put planes in the air that we don’t have 100 per cent confidence in.” He said that Boeing fully understood “the gravity of the situation”. – The Times
