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London open: Stocks gain; Blackstone strikes deal for Hipgnosis
London stocks rose in early trade on Monday following another record high at the end of last week.
At 0845 BST, the FTSE 100 was up 0.5% at 8,176.75.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Sentiment is upbeat at the start of the week, fuelled by relief that inflationary pressures in the US aren’t as bad as feared, and hopes return that a ceasefire could be negotiated in the Middle East. The FTSE 100 has scaled fresh heights, with another sprint higher in early trade.
“All eyes will be on the Fed meeting starting on Tuesday and comments from Governor Jerome Powell on Wednesday about how long we will need to wait for interest rate cuts to come. The US central bank is set to stay in its holding pattern and maintain high borrowing costs until September, but there’s still a chance that it may hang on even longer.”
On home shores, the latest data from Halifax showed that house prices jumped by nearly 2% over the last year, industry data, driven by demand for smaller homes.
Annual property price growth reached 1.9% in February, to £282,430, a notable recovery from October’s low of -4.1%.
However, Halifax said that within that, price growth for different property types varied significantly.
Prices of flats and terraced houses jumped 2.7% and 2.6% respectively, but semi-detached properties increased by 1.7%.
Amanda Bryden, head of Halifax Mortgages, said: “It is important not to gloss over the challenges facing the UK housing market, given the impact of higher interest rates on mortgage affordability, coupled with a continued lack of supply of new homes.
“But scratch beneath the surface and there is a more nuanced story, one which shows that demand for different property types in different parts of the country can vary hugely.
“One way to compensate for higher borrowing costs is to target smaller properties. This is especially true among first-time buyers…who now account for the largest proportion of homes purchased with a mortgage in almost 30 years.
“We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the growth gap on bigger properties that’s existed for most of the last four years.”
In equity markets, Anglo American gained following a Reuters report suggesting that BHP Group is considering making an improved offer for the miner after its initial proposal was rejected.
Mike Ashley’s Frasers Group rallied as it announced the start of a new £80m share buyback.
Hipgnosis rose as the music rights owner said it agreed terms on a £1.2bn takeover by private equity investor Blackstone, in the latest tit-for-tat battle with rival Concord.
Blackstone upped its offer to $1.30 a share in cash, or 104 pence a share, beating Concord’s latest offer of $1.25 a share.
Insurance group Beazley was little changed as it said first-quarter results were in line with guidance with insurance written premiums (IWP) growing at high single digits.
On the downside, JD Sports fell as Barclays downgraded the shares to ‘equalweight’ from ‘overweight’ and cut the price target to 140p from 165p after the retailer announced the acquisition of US rival Hibbett last week for $1.1bn.
Petrofac tumbled as it announced a delay to the publication of its full-year results and said it may have to convert a significant proportion of its existing debt to equity.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Prudential Plc | +3.18% | +23.00 | 746.80 |
| 2 |  |
British American Tobacco Plc | +1.81% | +42.00 | 2,368.00 |
| 3 |  |
Tesco Plc | +1.73% | +5.00 | 293.90 |
| 4 |  |
Phoenix Group Holdings Plc | +1.69% | +8.20 | 493.20 |
| 5 |  |
Smurfit Kappa Group Plc | +1.58% | +54.00 | 3,482.00 |
| 6 |  |
Anglo American Plc | +1.57% | +41.50 | 2,684.50 |
| 7 |  |
Imperial Brands Plc | +1.55% | +28.00 | 1,839.50 |
| 8 |  |
Hiscox Ltd | +1.49% | +18.00 | 1,227.00 |
| 9 |  |
Astrazeneca Plc | +1.40% | +168.00 | 12,156.00 |
| 10 |  |
Bae Systems Plc | +1.34% | +18.00 | 1,358.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | -1.19% | -5.00 | 416.10 |
| 2 |  |
Centrica Plc | -0.93% | -1.25 | 132.45 |
| 3 |  |
Ashtead Group Plc | -0.82% | -50.00 | 6,054.00 |
| 4 |  |
Bhp Group Limited | -0.80% | -18.00 | 2,232.00 |
| 5 |  |
Croda International Plc | -0.60% | -28.00 | 4,675.00 |
| 6 |  |
Flutter Entertainment Plc | -0.57% | -85.00 | 14,850.00 |
| 7 |  |
Associated British Foods Plc | -0.46% | -12.00 | 2,623.00 |
| 8 |  |
Easyjet Plc | -0.41% | -2.20 | 536.00 |
| 9 |  |
Hikma Pharmaceuticals Plc | -0.31% | -6.00 | 1,907.00 |
| 10 |  |
British Land Company Plc | -0.31% | -1.20 | 391.60 |
US close: Nasdaq jumps 2% as tech stocks surge
US stocks bounced back strongly on Friday with the Nasdaq surging more than 2% with the Magnificent Seven tech giants providing a huge boost following strong results from Microsoft and Alphabet.
The S&P 500 jumped 1.02% while the Nasdaq surged 2.03%; however the Dow finished just 0.4% higher, with gains limited by heavy losses from heavyweight tech group Intel.
Markets were rising despite data showing that US inflation remained stickier than expected in March. The US personal consumption expenditure rate rose to 2.7% in March, according to the Bureau of Economic Analysis, up from 2.5% in February and higher than the 2.6% expected by economists, suggesting that inflationary headwinds were still building.
Core PCE, the Federal Reserve’s preferred inflationary barometer, which strips out volatile food and energy, was unchanged at 2.8% per year; analysts had pencilled in a drop to 2.6%.
“US stocks have made more gains this afternoon, thanks mainly to the positive afterglow from last night’s big tech earnings,” said chief market analyst Chris Beauchamp from IG. “But the persistence of inflation and its refusal to keep heading lower will be a major headache for US markets, and will cast a long shadow over next week’s Fed meeting.”
Elsewhere on the macro front, the University of Michigan’s consumer sentiment index decreased to 77.20 points in April, down from a preliminary of 77.9 and March’s 79.40 point print, which was the highest reading since July 2021. Both current conditions and expectations declined more than initially expected, while inflation expectations for the year ahead were revised higher to 3.2% from 3.1%.
Market movers
Google parent company Alphabet surged 10% on the back of better-than-expected first-quarter earnings, its first-ever dividend, and a $70.0bn buyback.
Software giant Microsoft shares climbed 2% after it reported third-quarter numbers that came in ahead of Wall Street expectations. Revenues were up 17% year-on-year while net income jumped 20%.
Nvidia and Amazon were also performing well, while Meta edged higher after the previous day’s sell-off.
Chevron also beat on earnings estimates but saw profits fall on lower refining margins and natural gas prices, while Exxon Mobil was in the red after its quarterly numbers fell short of estimates for much the same reason.
lntel shares finished more than 9% lower after the chipmaker beat forecasts with first-quarter earnings but missed with its sales, and underwhelmed with its guidance for the current quarter.
Monday newspaper round-up: Thames Water, Brexit, Babylon
Senior Whitehall officials fear Thames Water’s financial collapse could trigger a rise in government borrowing costs not seen since the chaos of the Liz Truss mini-budget, the Guardian can reveal. Such is their concern about the impact on wider borrowing costs for the UK, even beyond utilities and infrastructure, that they believe Thames should be renationalised before the general election. Officials in the Treasury and the UK’s Debt Management Office fear that, unless the UK’s biggest water company is renationalised as soon as possible, “prolonged uncertainty” about its fate could “damage confidence in UK plc at a sensitive time”, with elections in the UK and the US later this year. – Guardian
Ireland has landed a €700m (£600m) Brexit bonanza with a steep increase in tax revenues flowing from customs duties now applicable to imports of clothing, food and other goods from Great Britain. Before Brexit, Britain enjoyed customs-free exports to Ireland and the rest of the EU because it was part of the single market and customs union. But when Boris Johnson sealed a hard Brexit and quit the single market, it meant fresh controls, checks and duties would be payable on exports to the EU. – Guardian
A wave of luxury vehicle thefts on Britain’s streets is being fuelled by Chinese companies selling cheap jamming devices, experts have warned. The jammers, which can block GPS, mobile phone and radio signals, range from cheaper, low-powered devices covering a couple of metres to more powerful ones capable of blocking signals within a distance of 100 metres or more. This allows car thieves to steal vehicles and then car thieves to steal vehicles and then block signals from any tracking devices, making it much harder to discover their whereabouts once they have been taken. – Telegraph
The former boss of Persimmon, who stepped down as chief executive of the listed housebuilder amid an outcry over his “unfathomable” pay package, is on a collision course with the American hedge fund backer of his new venture. Jeff Fairburn, best known in the City for a £75 million bonus payout at Persimmon in 2018, teamed up with Elliott Advisors to buy Avant Homes as the housing market prospered from a cut to stamp duty during the pandemic. – The Times
HM Revenue & Customs is investigating the tax affairs of Babylon, the insolvent healthcare technology company that was championed by Matt Hancock, the former health secretary, and had links to the Conservative Party. Officials are investigating tax matters relating to the period before the appointment in August of administrators from Alvarez & Marsal over Babylon Partners, the main British operating company. – The Times
