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London open: Stocks fall on US rate cut doubts
London stocks fell in early trade on Wednesday following a weaker close on Wall Street, amid growing doubts over US interest rate cuts following solid economic data.
At 0825 BST, the FTSE 100 was down 0.3% at 7,910.54 .
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The Taiwan earthquake has turned markets more skittish, with investors already unnerved by data pointing to inflation staying stubborn in the US.
“The Nikkei fell to its lowest level in two weeks, following a tsunami warning for Japan’s Okinawa island prefecture. It looks set to be hard going for the FTSE 100 to regain its recent mojo and head back towards breaching record levels. After cantering past the psychologically important 8,000 mark on Tuesday, the index lost ground and is set to struggle to find form as uncertainty grips investors. Setting a fresh all-time high remains frustratingly elusive, despite the uptick in crude prices, which are set to benefit energy giants.
“With American factories churning out more goods, it’s another piece of the picture pointing to a highly resilient US economy in the face of high borrowing costs. It’s led to fresh risk-off sentiment spreading, as worries brew about inflation staying doggedly above target and the Fed being potentially forced to hold off from cutting rates by as much as previously forecast this year.”
All eyes will be on Fed chair Jerome Powell later in the day, as he is due to give a speech at Stanford.
Investors were also mulling the latest data out of China, which showed that activity in the services sector grew as expected in March.
The Caixin services PMI ticked up to 52.7 from 52.5 in February, in line with expectations. A reading above signals expansion, while a reading below indicates contraction.
Wang Zhe, senior economist at Caixin Insight Group, said: “Growth of supply and demand picked up pace. Improved market demand drove a continuous increase in supply.
“Business activity and total new orders both grew for the 15th straight month, while exports continued to grow amid a recovery of the global economy, pushing the corresponding measure to its highest level since June.”
In equity markets, FTSE 250 engineer Renishaw slumped after Germany’s Siemens confirmed it was not planning to make an offer for the company.
On the upside, precious metals miners Fresnillo and Hochschild shone as gold prices reached another record high.
Meat, seafood and meat alternatives group Hilton Foods gained as it said profits rose by a fifth in 2023 despite modest top-line growth, helped by the turnaround in its seafood business.
Outside the FTSE 350, Topps Tiles lost ground as it cautioned that first-half profitability would be hit by a number of factors including a weaker market, and reported a fall in revenues.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hsbc Holdings Plc | +1.16% | +7.20 | 628.60 |
| 2 |  |
Rightmove Plc | +1.09% | +5.80 | 538.20 |
| 3 |  |
Marks And Spencer Group Plc | +1.07% | +2.80 | 264.80 |
| 4 |  |
Standard Chartered Plc | +1.00% | +6.80 | 685.40 |
| 5 |  |
St. James’s Place Plc | +0.87% | +4.00 | 461.20 |
| 6 |  |
Fresnillo Plc | +0.79% | +4.00 | 509.50 |
| 7 |  |
Itv Plc | +0.75% | +0.55 | 74.10 |
| 8 |  |
Mondi Plc | +0.73% | +10.00 | 1,382.50 |
| 9 |  |
Sainsbury (j) Plc | +0.67% | +1.80 | 269.60 |
| 10 |  |
Barclays Plc | +0.58% | +1.06 | 185.18 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | -2.87% | -3.15 | 106.60 |
| 2 |  |
Prudential Plc | -2.16% | -16.00 | 724.00 |
| 3 |  |
Bae Systems Plc | -1.58% | -21.00 | 1,310.00 |
| 4 |  |
Intercontinental Hotels Group Plc | -1.57% | -128.00 | 8,004.00 |
| 5 |  |
Spirax-sarco Engineering Plc | -1.47% | -145.00 | 9,730.00 |
| 6 |  |
Halma Plc | -1.44% | -34.00 | 2,319.00 |
| 7 |  |
Astrazeneca Plc | -1.43% | -152.00 | 10,452.00 |
| 8 |  |
Smiths Group Plc | -1.39% | -23.00 | 1,634.00 |
| 9 |  |
Centrica Plc | -1.38% | -1.75 | 125.15 |
| 10 |  |
Ocado Group Plc | -1.33% | -5.80 | 430.10 |
US close: Stocks slip on first day of second quarter
Wall Street closed in the red on the first trading day of the second quarter on Tuesday, as some robust economic data sparked speculation about potential delays in anticipated Federal Reserve rate cuts.
At the close, the Dow Jones Industrial Average was down 1% to 39,170.24 points, while the S&P 500 followed suit with a 0.72% drop to end the day at 5,205.81 points.
The tech-heavy Nasdaq Composite also saw a decline, closing down 0.95% at 16,240.45 points.
In currency markets, the dollar was stable against sterling and the yen at 79.51p and JPY 151.56, while it decreased 0.01% on the euro to change hands at 92.84 euro cents.
“Monday’s stronger-than-expected US ISM factory activity and a rebound in new orders for manufacturing goods in Europe and the US led to US yields nearing three-month highs,” said IG senior market analyst Axel Rudolph.
“They did so amid worries that inflation might return, provoking a sell-off in equities following their strong first quarter rally.
“While the gold price hit a new record high on Tuesday, with the silver price playing catch up and nearing its December and March peaks, the oil price remains on track for its fourth straight day of gains amid heightened geopolitical tensions in the Middle East.”
Job openings see little change in February
In economic news, the US saw little change in the number of job openings in February, suggesting a stagnant job market.
According to the Department of Labor, the seasonally-adjusted data showed a marginal 0.1% increase in job openings, bringing the total to 8.756 million.
January’s initial estimate of job openings was revised downward from 8.863 million to 8.748 million.
On a positive note, hiring saw a 2.1% uptick compared to the previous month, reaching 5.82 million.
However, the quits rate, which measures voluntary separations, remained steady at 2.2%.
Total separations grew by 38,000 to 3.484 million, indicating a modest increase in job turnover.
Tesla, health insurers in the red, Trump rollercoaster continues
In equities, Tesla shares tumbled 4.9% following the company’s announcement of a decline in deliveries for the first time in nearly four years, falling short of Wall Street estimates.
UnitedHealth Group and Humana both experienced significant declines, with UnitedHealth dropping by 6.44% and Humana plunging by 13.41%.
The downturn followed an announcement by the Centers for Medicare and Medicaid Services indicating a smaller-than-expected increase of 3.7% in payments for private Medicare Advantage plans.
On the upside, Trump Media & Technology Group saw a positive movement, with shares surging by 6.04% as the turbulence surrounding the company since its listing last week continued.
Wednesday newspaper round-up: Thames Water, Shell, Nationwide
A bond issued by Thames Water’s parent company has fallen to record lows as the embattled company scrambles to secure its future, and the government signalled it is “ready to step in if necessary”. The £400m bond, issued by the water supplier’s parent company, Kemble, has slumped to only 14.4p after shareholders indicated that they were unwilling to inject further funds into the heavily indebted utility company. – Guardian
Adverts featuring the actor Dominic West as a sneering bank manager will be pulled from TV in their current form after the advertising watchdog ruled they were misleading because they wrongly suggest that the building society had not closed branches. The Advertising Standards Authority (Asa) received 281 complaints, including one from rival lender Santander, about the advert, which ran in October and November. The Nationwide campaign took a swipe at high street banks that have been closing branches. – Guardian
Taxpayers are to pay hundreds of millions of pounds to cover the cost of dismantling some of Shell’s dirtiest oil rigs in the North Sea. It comes after the energy giant was ordered to strip thousands of tonnes of waste from decommissioned oil platforms despite the company’s attempts to keep them in place. Shell has spent the past decade lobbying for an exemption from removing toxic sludge from three platforms located in its Brent oil and gas field over claims it could risk workers’ lives and hurt the taxpayer. – Telegraph
The value of second-hand electric cars has tumbled since the start of the year as Chinese manufacturers flood Britain with cheap new models. The average price of the 20 most popular used electric and hybrid vehicles fell 12pc in the three months to March compared with a year ago, according to research by the AA. – Telegraph
Microsoft will sell Teams, its online meeting service, separately from its Office software suite after coming under scrutiny from competition regulators. The technology group separated Teams and Office six months ago in Europe in an attempt to avoid a fine from the European Commission and now it will take the same approach worldwide. – The Times
