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London open: Retail stocks continue to lift FTSE 100 to new heights
UK stocks rose to another record high on Tuesday morning, rising for the fifth straight day, helped by a falling pound and another strong performance from retail stocks.
The FTSE 100 was up 0.5% at 8,062.2 after the first hour’s trade, ahead of Monday’s record closing high of 8,023.87, which topped the previous peak of 8,012.53 in February 2023.
“With the easing of tensions in the Middle East, safe-haven demand reversed course; global stock markets experienced a modicum of relief,” said Stephen Innes, managing partner at SPI Asset Management.
UK stocks in particular have been lifted by a falling GBP-USD rate over the past week on hopes that the Bank of England will soon start to cut interest rates as inflation begins to drop sharply; while projections for rate cuts by the Federal Reserve continue to be pushed back which has supported the dollar.
In economic data, UK government borrowing overshot forecasts in March, producing a budget deficit that was £6.6bn higher than expected. Public sector net borrowing, excluding state-controlled banks, came in at £12bn in March, the Office for National Statistics said. This was above expectations of around £10bn.
Elsewhere, the HCOB Flash composite purchasing managers’ index (PMI) for the eurozone beat forecasts as continued strength in the services sectors outweighed weakness in manufacturing. The eurozone PMI rose to 51.4 in April from 50.3 in March, beating the 50.8 forecast.
PMIs are also expected from the UK and US later on, which will be widely followed, along with speeches from Bank of England members Jonathan Haskel and Huw Pill.
Meanwhile, Wall Street will be waiting on the latest quarterly earnings results from blue chips Alphabet, GE Aerospace, General Motors, Tesla, UPS, Spotify, Visa and Lockheed Martin.
“The nature of the soft rebound, whether it’s a dead cat bounce, a short-covering rally, or the beginning of a more promising trend, hinges largely on how investors interpret the earnings landscape and in which direction US economic data unfolds in the coming days,” Innes said.
Ferrexpo bucks the trend
Mining stocks dominated the fallers lists on Tuesday, with Anglo American, Fresnillo, Rio Tinto, Glencore and Antofagasta dominating the fallers list on the FTSE 100.
However, on the FTSE 250, iron ore developer Ferrexpo jumped 10%, bouncing back after a big share-price fall last month, after a first-quarter production report showed a 203% in total output.
Leading the risers on the top-tier index was Primark owner Associated British Foods, surging 9% after posting a 37% jump in interim profit as it lifted its full-year earnings outlook. Looking ahead, AB Foods said it was on track to deliver “significant” growth in both profitability and cash generation ahead of expectations at the start of this financial year.
JD Sports Fashion was also riser after announcing it was buying retailer Hibbett for $1.08bn. Headquartered in Birmingham, Alabama, Nasdaq-listed Hibbett has 1,169 stores in 36 states across the US trading under the Hibbett and City Gear fascias.
Other retailers were also in demand, such as Ocado Group and Marks & Spencer.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Associated British Foods Plc | +9.38% | +235.00 | 2,741.00 |
| 2 |  |
Ocado Group Plc | +4.77% | +17.10 | 375.50 |
| 3 |  |
International Consolidated Airlines Group S.a. | +2.05% | +3.60 | 178.80 |
| 4 |  |
Intercontinental Hotels Group Plc | +1.85% | +146.00 | 8,024.00 |
| 5 |  |
Flutter Entertainment Plc | +1.76% | +260.00 | 14,995.00 |
| 6 |  |
Scottish Mortgage Investment Trust Plc | +1.70% | +13.80 | 825.80 |
| 7 |  |
Carnival Plc | +1.45% | +15.00 | 1,048.50 |
| 8 |  |
Hargreaves Lansdown Plc | +1.43% | +10.60 | 752.40 |
| 9 |  |
Crh Plc | +1.42% | +88.00 | 6,296.00 |
| 10 |  |
Barclays Plc | +1.37% | +2.60 | 191.78 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Anglo American Plc | -3.45% | -74.50 | 2,085.50 |
| 2 |  |
Fresnillo Plc | -3.07% | -18.00 | 569.00 |
| 3 |  |
Antofagasta Plc | -2.41% | -53.00 | 2,148.00 |
| 4 |  |
Glencore Plc | -2.11% | -10.00 | 464.90 |
| 5 |  |
Rio Tinto Plc | -1.93% | -104.00 | 5,282.00 |
| 6 |  |
Smith (ds) Plc | -1.35% | -4.80 | 350.00 |
| 7 |  |
Bhp Group Limited | -1.19% | -28.00 | 2,320.00 |
| 8 |  |
Itv Plc | -1.05% | -0.75 | 70.40 |
| 9 |  |
Mondi Plc | -0.82% | -12.50 | 1,514.00 |
| 10 |  |
Prudential Plc | -0.76% | -5.60 | 729.80 |
US close: Stocks higher ahead of tech earnings
Wall Street stocks were in the green at the close of trading on Monday as market participants looked ahead to key earnings from a number of major tech firms.
At the close, the Dow Jones Industrial Average was up 0.67% at 38,239.98, while the S&P 500 advanced 0.87% to 5,010.60 and the Nasdaq Composite saw out the session 1.11% firmer at 15,451.31.
The Dow closed 253.58 points higher on Monday, extending gains recorded in the previous session.
Tech earnings will be the flavour of the week this time around, with electric vehicle manufacturer Tesla, Facebook parent company Meta Platforms, software giant Microsoft, iPhone maker Apple, chipmaker Intel, and Google owner Alphabet all slated to report in the week ahead.
On the macro front, the Chicago Federal Reserve‘s national activity index rose to 0.15 in March, up from an upwardly revised reading of 0.09 for February and beating expectations for a 0.09% reading for the highest reading since November 2023.
Later in the week, GDP numbers will be out on Thursday, while the Commerce Department will publish its March personal consumption expenditure price index numbers, the Federal Reserve’s preferred inflation gauge, on Friday.
Tuesday newspaper round-up: P&O Ferries, TikTok, CVC
P&O Ferries seafarers have been told they will benefit from new French legislation that could double their pay, in what appears to be a significant U-turn by the controversial ferry operator. The move comes more than two years after P&O enraged the UK and French governments by sacking 786 workers and then taking advantage of a legal loophole to hire replacements on pay rates of below the minimum wage. – Guardian
The EU has said it will ban a new service launched by TikTok in Europe that it believes could be “as addictive as cigarettes” unless the company offers “compelling” fresh evidence that children are safeguarded. If the ban goes ahead, it would be the first time the EU has used sweeping new powers to impose sanctions on social media companies since its landmark Digital Service Act (DSA) came into force last August. – Guardian
City advisers are set to make almost £80m from Nationwide’s planned £2.9bn Virgin Money takeover. Nationwide expects to fork out £41m on fees and expenses in total, documents published on Monday show, while Virgin Money will spend £38m. Bankers from Goldman Sachs and JP Morgan, who are working for Virgin Money, are expected to receive £30.5m of the pot. Nationwide is set to pay £15.5m for financial advice from UBS. – Telegraph
Donald Mackenzie, one of the co-founders of CVC and the dealmaker who masterminded the buyout of Formula 1, has been revealed as a euro billionaire after CVC published its prospectus. Mackenzie, 66, a Jersey-based accountant from Scotland, holds shares in the private equity group CVC worth between €889 million and €1.03 billion, according to the selling document, and is proposing to cash in around €122 million worth. – The Times
It might need a takeover bid for a major UK blue chip company to wake up investors to the value in the oversold London stockmarket, a leading fund manager has said. Nick Train, one of the market’s best known stock pickers, said: “Sometimes you need a cathartic event to turn the tide.” – The Times
