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London open: Reckitt, mining stocks push FTSE 100 to new heights
UK stocks reached another record on Wednesday morning as strong gains from Reckitt Benckiser and the mining sector provided a lift early on.
By 0830 BST, the FTSE 100 was up 0.5% at 8,083, after setting its second record closing high in as many days on Tuesday at 8,044.81.
Markets managed to shrug off hawkish comments from Bank of England chief economist Huw Pill the previous session after he said that rate cuts were still “some way off”. In a speech at the London campus of the University of Chicago Booth School of Business, Pill warned there are greater risks associated with easing too early should inflation persist rather than easing too late if it abates.
Nevertheless, sentiment was being lifted by strong gains on Wall Street on Tuesday and a big after-hours surge in the share price of Tesla – the first of the Magnificent Seven tech stocks to report their earnings – despite numbers missing analysts’ estimates. The stock was up 13% after the closing bell.
On Wednesday’s agenda, markets will have a hold of economic data from across the eurozone to contend with, including the German IFO index, business and consumer confidence in Italy, the ZEW sentiment survey in Switzerland, along with speeches from some European Central Bank members. Over in the US, we’ll have MBA mortgage applications and durable goods orders data.
Reckitt, miners provide a lift
First-quarter results from consumer goods group Reckitt Benckiser were well received with the stock up 4% early on, after the company said improving price/mix was able to offset a drop in volumes in the first half as like-for-like revenues rose 1.5%.
Mining stocks were also on the up, bouncing back after their recent underperformance on the back a jump in iron ore prices to a seven-week high after producer Fortescue reported that 2024 shipments would miss market expectations due to supply disruptions. Rio Tinto, Glencore and Anglo American were all performing well in London.
Bucking the trend was blue chip silver miner Fresnillo after reporting a drop in both gold and silver output over the first three months of the year.
Leading the fallers however was Lloyds Bank after unveiling a 28% fall in first-quarter profits due to lower net interest income and higher operating expenses, as competition for mortgages and savings squeezed margins.
International distribution and services group Bunzl was on the rise after holding on to guidance despite a drop in first-quarter revenues, driven by lower volumes in its US foodservice redistribution business, American retail customers clearing inventory and deflation.
On the FTSE 250, shares in PZ Cussons jumped on plans to sell the St Tropez tanning brand while the company said it is reviewing its operations in Africa, as it backed its profit outlook for 2024.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rio Tinto Plc | +3.29% | +175.00 | 5,492.00 |
| 2 |  |
Bae Systems Plc | +2.24% | +30.00 | 1,370.00 |
| 3 |  |
Bhp Group Limited | +2.10% | +49.00 | 2,386.00 |
| 4 |  |
Glencore Plc | +1.87% | +8.75 | 477.25 |
| 5 |  |
Anglo American Plc | +1.47% | +31.00 | 2,142.00 |
| 6 |  |
Bp Plc | +1.34% | +7.00 | 530.10 |
| 7 |  |
Scottish Mortgage Investment Trust Plc | +1.14% | +9.40 | 836.60 |
| 8 |  |
Astrazeneca Plc | +1.05% | +118.00 | 11,386.00 |
| 9 |  |
Antofagasta Plc | +1.02% | +22.00 | 2,177.00 |
| 10 |  |
3i Group Plc | +0.98% | +28.00 | 2,887.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Croda International Plc | -3.87% | -189.00 | 4,699.00 |
| 2 |  |
Burberry Group Plc | -2.83% | -33.00 | 1,131.50 |
| 3 |  |
Ocado Group Plc | -2.73% | -10.30 | 367.50 |
| 4 |  |
British Land Company Plc | -1.68% | -6.60 | 386.40 |
| 5 |  |
Tui Ag | -1.60% | -9.50 | 583.00 |
| 6 |  |
Land Securities Group Plc | -1.39% | -9.00 | 639.50 |
| 7 |  |
Direct Line Insurance Group Plc | -1.25% | -2.40 | 190.10 |
| 8 |  |
Smith (ds) Plc | -1.20% | -4.20 | 345.60 |
| 9 |  |
Persimmon Plc | -1.12% | -15.00 | 1,319.50 |
| 10 |  |
Segro Plc | -1.10% | -9.60 | 859.40 |
US close: Stocks higher as traders thumb over Q1 earnings
Wall Street stocks closed higher on Tuesday as corporate earnings began to roll in from a number of the nation’s biggest firms.
At the close, the Dow Jones Industrial Average was up 0.69% at 38,503.69, while the S&P 500 advanced 1.20% to 5,070.55, and the Nasdaq Composite saw out the session 1.59% firmer at 15,696.64.
The Dow closed 263.71 points higher on Tuesday, extending gains recorded in the previous session.
Corporate earnings were firmly in focus on Tuesday, with UPS shares trading higher following better-than-expected quarterly figures, while PepsiCo shares headed south despite publishing a quarterly earnings beat.
General Motors raised its full-year guidance on the back of a big Q1 earnings beat, Spotify said it had turned a profit last quarter as revenues came in ahead of estimates, and JetBlue shares flew lower after revealing its Q1 loss had widened significantly and issued a profit warnings for the year as a whole.
Tesla reported a sharp drop in earnings for the first three months of the year, driven by declining sales and a cooling EV market, and issued downbeat guidance that added to mounting concerns regarding the company’s strategy.
On the macro front, a preliminary reading of S&P Global‘s manufacturing fell to 49.9 in April 2024, the lowest in four months and sort of expectations for a print of 52, while the services PMI dropped to 50.9 in April, the lowest level in five months and also below expectations for a reading of 52.
Elsewhere, new home sales in the United States bounced back strongly in March after a sharp downward revision to numbers the month before. New privately-owned home sales jumped by 8.8% to a seasonally-adjusted annualised rate of 693,000 last month, according to the Census Bureau. This was the highest level in six months and well ahead of the 668,000 expected by analysts. February’s sales were revised to 637,000, down from the initial estimate of 662,000.
Finally, the Richmond Fed‘s composite manufacturing index increased to -7 in April, up from -11 in March, with shipments and new orders increasing and employment falling. Firms continued to report declining backlogs and vendor lead times in April, while the capacity utilisation index rose to -5 from -21.
Wednesday newspaper round-up: UK banks, Tesla, KPMG
UK banks are leaving themselves open to “severe, unexpected losses”, by failing to properly measure how exposed they are to the $8tn private equity industry, the Bank of England has warned. In a speech on Tuesday, Rebecca Jackson, a senior executive at the central bank, said there was a “creeping sense of complacency” among lenders, who – despite a boom in loans and financing to the sector – had almost no ability to put together data “or even appreciate its crucial importance”. – Guardian
The Senate voted Tuesday to pass a bill that will either ban TikTok or force a sale of the short-form video app, giving its China-based parent company ByteDance up to one year to divest its crown jewel before facing deletion from US app stores. The vote was a landslide, with 79 senators voting in favor and 18 against. The bill passed in the House on Saturday by a margin of 360 to 58, as part of a foreign aid package for Ukraine, Israel and Taiwan. It will now make its way to the desk of Joe Biden, who has previously said he would sign the legislation. – Guardian
Tesla is speeding up plans for a range of cheaper cars as Elon Musk’s electric vehicle maker attempts to take on a wave of cut-price Chinese manufacturers. The company said it would “accelerate the launch of new models… including more affordable models” with production starting next year. Tesla’s shares rose by more than 5pc in after-hours trading despite the company reporting its biggest drop in sales in more than a decade. – Telegraph
KPMG, the Big Four accounting firm, is to start hiring more ex-offenders after a “very positive” two-year trial. The move by one of Britain’s largest employers is a major boost for the government, which is trying to encourage more big businesses to recruit prison leavers to help cut reoffending, which costs an estimated £18 billion a year. – The Times
The new chief executive of AG Barr is to receive a £130,000 relocation package to help him buy a property in Scotland. The soft drinks firm said that Euan Sutherland, who is Scottish, would get the lump sum as part of his joining package when he officially takes over on May 1. He and his family live in Surrey but the new role will see him splitting time between London and Scotland. – The Times
