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London open: FTSE gains as investors eye Fed meeting; HSBC rallies
London stocks rose in early trade on Tuesday, helped along by solid performances from the likes of HSBC and Coca-Cola HBC, as investors eyed the start of the Federal Reserve’s two-day policy meeting.
At 0850 BST, the FTSE 100 was 0.3% firmer at 8,172.36.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has set off on a climb higher, nudging ahead again on a record-breaking run. The fresh pulse of positivity comes as ceasefire negotiations in the Middle East continue and a more optimistic sentiment washes over the London market.
“Even the surprise resignation of HSBC boss Noel Quinn, didn’t stop the banking giant from posting share price gains this morning. Sharp gains may be held back, with a little more caution creeping in as the key meeting at the Federal Reserve starts, with speculation still swirling about how long interest rates will linger in the US.
“Although the world’s largest economy slowed more sharply than expected in the first three months of the year, key inflation readings show inflation remains stubborn and that’s dashed hopes for early and multiple rate cuts. If interest rates do linger for a lot longer, it’s raised concerns about the growth prospects for the engine of the global economy.”
On home shores, investors were mulling the latest figures from the British Retail Consortium and NielsenIQ, which showed that the price increases at UK tills fell to their lowest since the end of 2021 in April as food inflation eased for the 12th straight month.
The annual rate of shop price inflation fell to just 0.8% in April, down from 1.3% in March, the BRC-NeilsenIQ Shop Price Index showed.
This was well below the three-month average rate of 1.4% and the lowest year-on-year increase since December 2021.
Non-food prices were 0.6% lower than where they were last year, with annual deflation accelerating from -0.2% the previous month. This was the sharpest decline since October 2021.
Meanwhile, food price increases fell to 3.4% from 3.7%, falling to its lowest since March 2022. Fresh food inflation slowed to 2.4% from 2.6%, hitting its lowest since November 2021, while ambient food inflation fell to 4.9% from 5.2%, its lowest since June 2022.
“One year on from the peak, shop price inflation levels are showing signs of normalising, providing relief to households,” said Helen Dickinson, the chief executive of the BRC.
“While consumers will welcome the lower shop price inflation, geopolitical tensions and the knock-on impact on commodity prices, like oil, pose a threat to future price stability. Retailers will continue to do all they can to keep prices down, but Government has a role to play with pro-growth policies that allow businesses to invest in the customer offer.”
In equity markets, HSBC was the top gainer on the FTSE 100 as it announced that chief executive Noel Quinn was unexpectedly stepping down after nearly five years in the job, and released first-quarter results.
Quinn, 62, will remain in post until a new CEO is appointed. The news came as the lender posted a 1.8% drop in first-quarter profit to $12.7bn (£10bn), slightly higher than expectations and unveiled a $3bn share buyback as revenues increased 3% to $20.8bn.
“After an intense five years, it is now the right time for me to get a better balance between my personal and business life,” Quinn said.
Coca-Cola HBC was also in the black as it said first-quarter revenue beat forecasts and reiterated guidance that annual operating profit would grow further on the back of strong demand.
Hargreaves Lansdown and Rotork were both higher on the back of well-received trading updates.
Telecom Plus advanced as it said full-year adjusted pre-tax profit was set to be towards the upper end of market expectations after a record year.
On the downside, Prudential declined even as it reported an 11% rise in first-quarter net new business profit, while St James’s Place fell after it posted a fall in first-quarter net inflows.
Whitbread lost ground as it announced a £150m share buyback and beefed up its dividend after seeing its bottom line jump by more than a third in the year to 29 February, and unveiled plans to cut 1,500 jobs as it turns underperforming restaurants into more hotels.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hargreaves Lansdown Plc | +5.17% | +40.60 | 826.20 |
| 2 |  |
Hsbc Holdings Plc | +3.77% | +25.20 | 693.30 |
| 3 |  |
Whitbread Plc | +2.63% | +80.00 | 3,127.00 |
| 4 |  |
Tesco Plc | +1.34% | +3.90 | 295.90 |
| 5 |  |
Ashtead Group Plc | +1.21% | +72.00 | 6,046.00 |
| 6 |  |
Standard Chartered Plc | +1.17% | +8.00 | 691.80 |
| 7 |  |
Coca-cola Hbc Ag | +1.16% | +30.00 | 2,606.00 |
| 8 |  |
Sainsbury (j) Plc | +1.14% | +3.00 | 265.40 |
| 9 |  |
Imperial Brands Plc | +1.07% | +19.50 | 1,843.50 |
| 10 |  |
Hiscox Ltd | +0.90% | +11.00 | 1,237.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Prudential Plc | -4.86% | -36.00 | 705.40 |
| 2 |  |
Fresnillo Plc | -3.22% | -19.00 | 571.50 |
| 3 |  |
Anglo American Plc | -2.33% | -64.00 | 2,686.00 |
| 4 |  |
Vodafone Group Plc | -1.66% | -1.16 | 68.84 |
| 5 |  |
Ocado Group Plc | -1.01% | -3.60 | 351.80 |
| 6 |  |
Centrica Plc | -0.95% | -1.25 | 129.80 |
| 7 |  |
Rentokil Initial Plc | -0.85% | -3.50 | 410.70 |
| 8 |  |
Glencore Plc | -0.84% | -4.00 | 469.45 |
| 9 |  |
Bae Systems Plc | -0.77% | -10.50 | 1,344.50 |
| 10 |  |
Halma Plc | -0.71% | -16.00 | 2,223.00 |
US close: S&P 500 extends last week’s wins another session
Wall Street stocks were in the green at the end of trading on Monday as investors braced for more corporate earnings, some key labour market data and the outcome of the Federal Reserve’s two-day policy meeting.
At the close, the Dow Jones Industrial Average was up 0.38% at 38,386.09, while the S&P 500 advanced 0.32% to 5,116.17 and the Nasdaq Composite saw out the session 0.35% firmer at 15,983.08.
The Dow closed 146.43 points higher on Monday, extending gains recorded in the previous session.
Tesla shares were higher on Monday after the electric vehicle manufacturer struck a deal with China’s Baidu to help it roll out its self-driving technology across the nation, while Domino’s Pizza shares turned in solid gains on the back of better-than-expected quarterly earnings.
Still to come, Apple, McDonald’s, Coca-Cola and Amazon will all deliver earnings before the week is out.
On the macro front, the Dallas Federal Reserve‘s manufacturing business index was broadly flat in April, coming in at -14.5, up from last month’s -14.4 reading. The company outlook index moved up 10 points to -6.3, while the outlook uncertainty index retreated six points to 17.3.
Later in the week, the Federal Reserve will make its latest interest rate decision on Wednesday, while April’s nonfarm payrolls report will be out on Friday.
Tuesday newspaper round-up: Meta, ExxonMobil, Very Group
The Federal Communications Commission on Monday fined the largest US wireless carriers nearly $200m for illegally sharing access to customers’ location information. The FCC is finalizing fines first proposed in February 2020, including $80m for T-Mobile; $12m for Sprint, which T-Mobile has since acquired; $57m for AT&T, and nearly $47m for Verizon. – Guardian
The EU is set to launch formal proceedings against Meta, the owner of Facebook and Instagram, amid concerns it is not doing enough to counter Russian disinformation before the EU elections in June, according to reports. It is also expected to express concerns about the lack of effective monitoring of election content and a potentially inadequate mechanism for flagging illegal content. – Guardian
Oil traders working for US giant ExxonMobil face losing their jobs because they refuse to leave Brussels for London over poor pay. Staff at the multinational are reluctant to relocate to the British capital amid dissatisfaction with “uncompetitive” pay and a “lack of flexibility”, unions have warned. An internal survey showed most said they would turn down the move for these reasons. – Telegraph
The Barclay family are on course to lose control of the last pillar of their corporate empire as their Gulf-based backers plot a sale of Very Group. The Abu Dhabi investment firm that launched an unsuccessful attempt to buy the Barclays’ media assets last year is drawing up plans for an auction of the retailer as it seeks to unwind a £1.2 billion refinancing of the family’s debts. – The Times
A star stockpicker who has been responsible for managing £60 billion of assets has quit Royal London Asset Management to set up his own firm, taking his team with him. Peter Rutter, the firm’s head of equities and the manager of a number of strongly performing authorised funds, has left with immediate effect. – The Times
