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London open: FTSE nudges up ahead of busy week
London stocks nudged higher in early trade on Monday as investors looked ahead to a busy week for earnings and central bank announcements.
At 0820 GMT, the FTSE 100 was 0.1% higher at 7,639.16.
Richard Hunter, head of markets at Interactive Investor, said: “This week the corporate calendar goes into overdrive, with a particular focus on technology. The likes of Microsoft, Alphabet. Apple, Meta and Amazon will all provide updates, as well as Advanced Micro Devices.
“On the economic front, the Federal Reserve will announce its latest interest rate decision, with market expectations nailed on for a no-change result. The jury remains split between a cut in either March or May, with the expected six cuts this year likely to be the focus of disappointment should the Fed indicate that such a series seems unlikely given current conditions. The non-farm payrolls report is also due on Friday, with consensus pointing to 173000 jobs having been added in January compared to 216000 in the previous month, with unemployment expected to tick up slightly from 3.7% to 3.8%.
“The UK also faces an important week, with updates from a number of FTSE 100 heavyweights such as Diageo, Shell, BT and GlaxoSmithKline. In addition, the central bank will also be in focus as the Bank of England announces its latest rate decision, although it seems unlikely that it will move from the current 5.25% level.”
In equity markets, BP and Shell gushed higher in tandem with oil prices, amid escalating tensions in the Middle East.
Ryanair was in focus as it cut its full-year profit forecast and posted a 93% decline in third-quarter net profit, as higher fuel costs offset revenue gains and after its flights were removed from online travel agents.
Net profit fell to €15m from €211m in the same period a year earlier. Ryanair said traffic rose 7% during the quarter to 41.4m and average fares grew 13% to over €42, but the fuel bill was 35% higher at €1.2bn.
Ryanair now expects FY24 profit after tax of between €1.85bn and €1.95bn, down from previous guidance of €1.85bn to €2.05bn.
Superdry gained as it confirmed it was working with advisers on cost-saving options. Responding to press speculation, the fashion brand said: “In line with the company’s turnaround strategy, the company confirms it is working with advisors to explore the feasibility of various material cost saving options.
“Whilst there is no certainty that any of these options are progressed, they aim to build on the success of the cost saving initiatives carried out by the company to date and position the business for long-term success.”
Sky News reported over the weekend that Superdry and its advisers at PricewaterhouseCoopers were initiating work on plans that could lead to a company voluntary arrangement (CVA) or restructuring plan.
Sky said this could be aimed at closing underperforming shops – with a commensurate impact on jobs – and forcing through rent cuts with landlords.
On the downside, iron ore pellet producer Ferrexpo slumped as it said Ukraine’s court of appeal has confirmed a claim against it for around $125m as part of the long-running court case against its largest shareholder. The company said it would file an appeal to the Supreme Court in Ukraine.
London-listed Ferrexpo is facing several court cases or investigations by Ukrainian authorities trying to recover assets from founder and 49.5% shareholder Kostyantin Zhevago.
B&Q and Castorama owner Kingfisher was knocked lower by a downgrade to ‘sector perform’ from ‘outperform’ at RBC Capital Markets. RBC said it was relatively cautious on the outlook for France and consensus earnings in the near term, and that it currently see more valuation upside potential for some other UK retailers such as B&M.
In other broker note action, Schroders fell after a downgrade to ‘underperform’ at BNPP Exane.
IMI was lifted by an upgrade to ‘buy’ at Berenberg, while Intertek was higher on the back of an upgrade to ‘buy’ at Jefferies.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | +2.57% | +12.80 | 511.60 |
| 2 |  |
Bae Systems Plc | +2.27% | +26.50 | 1,194.50 |
| 3 |  |
Bp Plc | +1.68% | +7.75 | 469.45 |
| 4 |  |
British American Tobacco Plc | +1.56% | +36.50 | 2,369.50 |
| 5 |  |
Shell Plc | +1.54% | +37.50 | 2,467.00 |
| 6 |  |
National Grid Plc | +1.29% | +13.50 | 1,057.00 |
| 7 |  |
Intertek Group Plc | +1.14% | +51.00 | 4,509.00 |
| 8 |  |
Gsk Plc | +0.96% | +14.80 | 1,551.80 |
| 9 |  |
Melrose Industries Plc | +0.86% | +5.00 | 586.40 |
| 10 |  |
Pearson Plc | +0.81% | +7.80 | 973.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Mondi Plc | -11.20% | -183.95 | 1,457.80 |
| 2 |  |
Schroders Plc | -4.14% | -17.60 | 407.40 |
| 3 |  |
Itv Plc | -3.89% | -2.40 | 59.36 |
| 4 |  |
Ocado Group Plc | -3.51% | -20.20 | 555.60 |
| 5 |  |
Carnival Plc | -2.77% | -32.00 | 1,125.00 |
| 6 |  |
St. James’s Place Plc | -2.21% | -14.80 | 656.00 |
| 7 |  |
Kingfisher Plc | -2.18% | -4.90 | 220.20 |
| 8 |  |
Prudential Plc | -2.00% | -17.20 | 841.00 |
| 9 |  |
Tui Ag | -1.93% | -11.00 | 557.50 |
| 10 |  |
Sse Plc | -1.91% | -32.50 | 1,665.50 |
Monday newspaper round-up: Train strikes, fuel poverty, Evergrande
Train drivers will keep striking to “raise the profile” of their dispute after half a decade without a pay rise, the Aslef union has warned, before another week of rolling strikes across England. Aslef’s general secretary, Mick Whelan, has said he believes that the government will make renewed efforts to see train companies use controversial new anti-strike laws, despite the union forcing a climbdown this time round. – Guardian
Millions of households will still be living in fuel poverty by the end of the decade, and could be forced to pay almost £500 a year extra on their bills because of the government’s slow progress on meeting its home energy efficiency targets, according to a study. A fuel poverty charity has found that 3m households in England are expected to remain in fuel poverty by 2030 because the government is expected to miss a legally binding target on upgrading the energy efficiency of homes “by a staggering margin”. – Guardian
A Hong Kong court on Monday issued the liquidation of battered Chinese property giant Evergrande after lawyers failed to convince a judge it had a working restructuring plan. Once China’s biggest developer, Evergrande has reported more than $300 billion in liabilities and its troubles have become a symbol of a years-long property crisis that has dealt a massive blow to the country’s economy. A creditor in 2022 filed a winding-up petition in Hong Kong against China Evergrande Group – which would begin the process of liquidation – but the case has dragged on while parties tried to broker a deal. – Telegraph
The share of listed UK companies warning investors that profits will miss expectations has surpassed a peak reached during the 2008 financial crisis, research shows. Some 18.2 per cent of listed companies issued a profit warning last year, above the 17.7 per cent peak of 2008, as higher interest rates and fragile demand weighed on corporate balance sheets, according to EY-Parthenon, the consultancy service. – The Times
The businessman seeking to turn around Britishvolt, the collapsed battery start-up, has been arrested and charged in the United States over allegations of assault and harassment. David Collard, 39, founder of Recharge Industries and a former partner at PwC, is facing the charges after an alleged incident on Madison Avenue in New York at about 1.30am on November 15. – The Times
