ADVFN Morning London Market Report: Wednesday 24 November 2021

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London open: FTSE rises as energy, mining stocks rally


London stocks rose in early trade on Wednesday, underpinned by a strong showing in the energy and mining sectors, as investors eyed the latest US initial jobless claims and GDP data.

At 0900 GMT, the FTSE 100 was up 0.5% at 7,305.81.

Victoria Scholar, head of investment at Interactive Investor, said: “European markets are enjoying a reprieve, snapping a four-day losing streak with oil & gas and technology leading the gains.

“The FTSE 100 in inching closer to key resistance at 7,300 with Intertek’s trading statement lifting shares to the top of the basket. Investors are weighing up a deteriorating picture for Covid cases in Europe against a revival in bullish sentiment in the oil markets.”

Scholar also noted that US President Biden’s efforts to curtail the recent oil market rally by increasing supply to the market has in fact had the opposite effect.

“After mobilising emergency reserves, Brent saw its biggest percentage gain since August, rallying by over 3%. Biden’s decision to release 50m barrels from December was sharply below expectations and certainly does not go far enough to address the imbalance between demand and supply. The shortfall in supply has lifted brent for the fourth consecutive session, rallying by more than 6% to push above resistance at $80 and is potentially on track to test the October highs once again around $85 a barrel.”

Oil giants Shell and BP rallied along with oil prices, while miners gained in tandem with metals prices.

Elsewhere, Intertek pushed higher after saying it was it was on track for solid annual growth as the product testing company reported revenue up 6.7% in the most recent four-month period.

On the downside, Entain and Flutter lost ground following a Telegraph report suggesting that gamblers could be limited to a maximum £2 bet online and £100 spending a month.

Genus tumbled as the animal genetics company said that based on current trading, especially in China, pre-tax profit for 2022 was set to be “moderately lower” than its previous expectation.

Brewin Dolphin slid even as the wealth manager reported record full-year discretionary fund inflows.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Intertek Group Plc +6.59% +340.00 5,500.00
2 Bp Plc +2.06% +7.00 346.40
3 Land Securities Group Plc +1.97% +14.60 755.00
4 Crh Plc +1.74% +66.00 3,849.00
5 Bhp Group Plc +1.67% +33.50 2,034.50
6 Bunzl Plc +1.50% +42.00 2,835.00
7 Royal Dutch Shell Plc +1.42% +23.20 1,662.00
8 Segro Plc +1.40% +19.00 1,378.00
9 Experian Plc +1.35% +45.00 3,381.00
10 Royal Dutch Shell Plc +1.29% +21.20 1,659.40


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Easyjet Plc -2.27% -12.60 542.80
2 Flutter Entertainment Plc -1.81% -200.00 10,840.00
3 Tui Ag -1.69% -3.60 209.50
4 International Consolidated Airlines Group S.a. -1.39% -2.10 149.36
5 Johnson Matthey Plc -1.10% -24.00 2,158.00
6 Sage Group Plc -1.07% -8.40 774.80
7 Ocado Group Plc -0.89% -16.00 1,788.00
8 Intercontinental Hotels Group Plc -0.85% -42.00 4,889.00
9 Marks And Spencer Group Plc -0.73% -1.80 245.50
10 Next Plc -0.68% -56.00 8,130.00


Europe open: Shares rebound; Telecom Italia soars on higher bid talk

European shares bounced back from losses at the open on Wednesday on the back of higher commodity prices which offset nerves over rising Covid cases in the region.

The pan-European Stoxx 600 was up 0.47% with all major regional bourses higher. Germany is expected to make a decision on stricter measures on Wednesday amid a surge in cases there, and France recorded more than 30,000 new daily infections on Tuesday for the first time since August.

Oil stocks rose 0.9%, with crude prices edging ahead as investors remained sceptical about the effectiveness of a US.-led release of oil from strategic reserves. Miners gained, tracking higher copper prices due to easing concerns over Chinese demand.

In equity news, Telecom Italia jumped 8.3% on news reports that private equity crowd KKR is considering boosting its offer for the company after its top investor Vivendi called the initial bid too low.

Intertek shares were higher after the product testing company said it was on track for solid annual growth and reported revenue up 6.7% in the most recent four-month period.

French catering company Elior Group rose after announcing new targets for its next fiscal year and posting its best quarter since the pandemic began.

AutoStore gained after the Norwegian robotics company posted a 95% surge in third-quarter revenue.

Animal genetics company Genus slumped as it said pre-tax profit for 2022 is set to be “moderately lower” than its previous expectations based on current trading, especially in China.


US close: Stocks mixed as rising Covid-19 cases in Europe remain in focus

Wall Street stocks put on a mixed performance on Tuesday as rising international Covid-19 cases remained in focus ahead of the Thanksgiving break.

At the close, the Dow Jones Industrial Average was up 0.55% at 35,813.80, while the S&P 500 was 0.17% stronger at 4,690.70 and the Nasdaq Composite saw out the session 0.50% softer at 15,775.14.

The Dow closed 194.55 points higher on Tuesday, building on modest gains recorded in the previous session as market participants monitored rising Covid-19 cases across Europe and rising bond yields fuelled a tech sell-off.

Trading was somewhat slow on Tuesday given the Thanksgiving holiday-shortened week. However, traders still digested a number of earnings reports and the odd data point.

On the macro front, a flash reading of IHS Markit‘s November manufacturing PMI revealed that business activity growth slowed down a touch in November but still increased month-on-month, coming in bang on estimates at 59.1, up from 58.4 a month ago, as labour and raw material shortages weighed on production.

Elsewhere, the Richmond Federal Reserve‘s November manufacturing index inched down from 12 in October to 11 but remained in expansionary territory but all three component indexes continued to reflect growth.

In the corporate space, Abercrombie & Fitch posted a 10% year-on-year improvement in quarterly net sales on strong in-store sales, while American Eagle Outfitters said both sales and inventory levels had increased ahead of the all-important holiday trading season.

Shares in US electronics retailer Best Buy fell sharply on Tuesday despite the retailer reporting net earnings of $499.0m, or $2.00 per share, for the 13 weeks to 30 October, a year-on-year improvement that came in ahead of expectations, while Dollar Tree quarterly sales topped expectations as the discount retailer stated it would move to a $1.25 price point across all its stores.

Investors were also still firmly focussed on international Covid-19 woes after German Chancellor Angela Merkel warned that the European nation was now experiencing a spike in new cases.


Wednesday newspaper round-up: LV=, Bulb, Asda

The insurer LV= will be taken over by a company based offshore in Jersey if members agree to deal orchestrated by US private equity firm Bain Capital that would see it lose its historic mutual status. Bain has established a Jersey-based company called BCC Blake Bidco Ltd to carry out the takeover, according to correspondence between an independent expert and Gareth Thomas, a Labour MP and shadow minister of international trade. – Guardian

French fishers are set to take action within days, including blocking road and sea freight bound for the UK through Calais and other Channel ports, as a months-long dispute over licences to operate in British waters intensifies. French media reported on Tuesday that with talks between the two governments and the European Commission over post-Brexit fishing rights seemingly deadlocked, angry fishers in northern France would decide on Thursday what steps to take. – Guardian

Companies are ordering food from special city centre kitchens in a bid to attract workers back to the office without having to run canteens. Catering giant Compass has set up 12 remote kitchens in the UK and Ireland, mostly in London and Dublin, to cook meals and deliver them to its corporate clients. It is a similar format to so-called “dark kitchens” used by some restaurants to sell food via apps such as Deliveroo, except in this case the food needs to be pre-ordered in bulk. – Telegraph

Google and Facebook must not be regulated “only by outrage”, the chief executive of Ofcom has said, in comments that will be received as a retort to criticisms from the former Daily Mail editor Paul Dacre. Dame Melanie Dawes said the “time has come for strong, external oversight” of web search and social media as she underscored her commitment to tackling harmful online content, days after Mr Dacre questioned if she had the “wherewithal” to do the job. – Telegraph

Only four months ago, the government regarded Bulb as such a totem of British enterprise that it granted the energy supplier a prime ministerial visit. “I’m here at a wonderful company called Bulb in their Bishopsgate headquarters,” Boris Johnson said as he met apprentices in a glowing Downing Street video. Now the jobs of those apprentices and 1,000 other Bulb staff are at risk after the supplier said on Monday that it had failed to secure the investment it needed to survive and was entering the government-backed special administration regime. – The Times

The former boss of Marks & Spencer has been appointed chairman of Asda as the supermarket chain searches for a replacement chief executive. Lord Rose of Monewden, 72, was hired by Mohsin and Zuber Issa, who own Asda, after the abrupt departure in August of Roger Burnley as the chain’s chief executive. Rose is already chairman of EG Group, the Issa brothers’ petrol station and store business, after it moved to allay concerns about its corporate governance earlier in the year. – The Times


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