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London open: Stocks edge up ahead of PMIs
London stocks edged higher in early trade on Thursday as investors awaited the latest readings on the UK manufacturing and services sectors and a summit on the Ukraine crisis.
At 0855 GMT, the FTSE 100 was up 0.3% at 7,482.28.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Traders are on tenterhooks ahead of a meeting of G7 leaders and a NATO summit, with expectation that the military response will be beefed up through fresh weapons supply to Ukraine and that sanctions will also be tightened.
“But splits remain over deploying a serious blow to Moscow’s economic resilience by bringing in a European embargo to energy supplies, although an offer of more liquefied natural gas from the US would ease the transition away from reliance on Russia.
“In the UK concerns stay elevated about the knock-on effect that soaring commodity prices will have on business resilience and consumer confidence, after the government’s fiscal plan was criticised for not offering enough medicine to ease the financial pain of higher prices. The small steps taken are individually welcome but together they don’t ease do much to ease the increasing burden of the cost of living and cost of commerce crises.
“Investors will be keeping a keen eye on the closely watched PMI numbers coming out this morning, giving a snapshot of activity in the private sector after a marked improvement in February as global supply issues eased. The worry is that these problems have ratcheted up again in recent weeks, although the effect of the easing of Covid restrictions across the economy should provide some support.”
Markit’s services and manufacturing PMIs for March are due at 0930 GMT.
In equity markets, gambling software maker Playtech was a high riser after it reported a jump in annual profits as it continued to talk to a group of Asia-based investors about a takeover after the collapse of Aristocrat Leisure’s bid earlier this year.
Bridgepoint rallied after well-received results, while Games Workshop was trading higher after an update.
On the downside, Next slumped after it reduced its profit guidance and predicted selling prices would rise by 8% in the second half of the year, as the fashion retailer reported a more than doubling of annual profit.
XP Power tumbled after saying it may have to cough up $40m in damages after US-based Comet won a trade secret misappropriation lawsuit against the London-listed critical power solutions developer. It didn’t help that the stock was trading without entitlement to the dividend.
Schroders, Pearson, Prudential, Ferguson, Greggs and Close Brothers were also ex-dividend.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +2.45% | +27.50 | 1,151.50 |
| 2 |  |
United Utilities Group Plc | +2.15% | +22.50 | 1,067.50 |
| 3 |  |
Fresnillo Plc | +2.04% | +14.80 | 740.80 |
| 4 |  |
Burberry Group Plc | +1.85% | +30.50 | 1,680.50 |
| 5 |  |
Bhp Group Limited | +1.84% | +50.50 | 2,791.00 |
| 6 |  |
Imperial Brands Plc | +1.59% | +25.50 | 1,627.50 |
| 7 |  |
Severn Trent Plc | +1.53% | +44.00 | 2,918.00 |
| 8 |  |
Rio Tinto Plc | +1.31% | +76.00 | 5,876.00 |
| 9 |  |
National Grid Plc | +1.16% | +12.80 | 1,120.80 |
| 10 |  |
Sse Plc | +1.14% | +19.00 | 1,689.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Schroders Plc | -3.81% | -124.00 | 3,128.00 |
| 2 |  |
Next Plc | -3.57% | -228.00 | 6,156.00 |
| 3 |  |
Glencore Plc | -2.80% | -14.30 | 496.90 |
| 4 |  |
Pearson Plc | -2.51% | -19.60 | 760.00 |
| 5 |  |
International Consolidated Airlines Group S.a. | -1.82% | -2.52 | 136.28 |
| 6 |  |
Carnival Plc | -1.77% | -22.60 | 1,256.80 |
| 7 |  |
Marks And Spencer Group Plc | -1.73% | -2.75 | 155.90 |
| 8 |  |
Informa Plc | -1.32% | -7.80 | 581.00 |
| 9 |  |
Halma Plc | -1.00% | -25.00 | 2,478.00 |
| 10 |  |
Ferguson Plc | -0.94% | -105.00 | 11,120.00 |
Europe open: Shares edge higher ahead of Western summit on Ukraine
European shares made slight gains at the open on Thursday as the war in Ukraine worsened and investors eyed more sanctions against the Russian regime as world leaders prepared to meet in Brussels.
The pan-European Stoxx 600 index was up 0.23% with all major bourses following suit after a weaker performance overnight on Wall Street and mixed markets in Asia.
US President Joe Biden arrived in Brussels for meetings of the NATO alliance, G7 and European Union to discuss future steps on assistance for Ukraine and potential measures to hinder Moscow’s ability to fund its unprovoked war on its neighbour.
Splits have emerged among EU leaders over an embargo on Russian energy exports. European gas prices surged after Russian President Vladimir Putin demanded payment in roubles for gas sold to “unfriendly” countries.
”There is little sign the pedal is coming off the accelerator for energy prices, amid a fresh round of volatility that has hit markets after Russia moved to retaliate in the economic war being waged. Oil has climbed upwards again, with Brent crude marching back above $122 a barrel earlier as trade stays highly sensitive to the repercussions of the Ukraine conflict,” said Hargreaves Lansdown analyst Susannah Streeter.
In equity news, shares in UK fashion retailer Next fell as the company cut profit guidance and predicted selling prices would rise by 8% in the second half of the year as it reported a more than doubling of annual profit.
Games Workshop shares soared by 6% as the company lifted its dividend and said trading was in line with expectations.
Shares in Renault, the Western carmaker which has the most exposure to the Russian market, fell after the company suspend operations at its Moscow plant and started reviewing options on its majority stake in Avtovaz, the country’s No. 1 carmaker.
Daimler Truck rose after it said it expected little impact on its business in 2022 from the Covid-19 pandemic and Russia’s invasion of Ukraine, and forecast revenue growth of at least 14%.
US close: Profit-taking sees stocks finish weaker
Wall Street stocks closed weaker on Wednesday, as both oil prices and elevated bond yields remained in focus.
At the close, the Dow Jones Industrial Average was down 1.29% at 34,258.50, the S&P 500 lost 1.23% to 4,456.24, and the Nasdaq Composite was off 1.32% at 13,922.60.
The Dow closed 448.96 points lower on Wednesday, more than erasing the gains it recorded in the previous session.
“US markets have slipped back on the back of the weakness in European markets and some profit-taking after decent gains in five days out of the last six,” said CMC Markets chief market analyst Micharl Hewson.
“Yesterday saw the Nasdaq 100 and S&P 500 both hit their best levels since 10 February, so it’s likely what we’re seeing today is nothing more than some modest profit-taking.
“The firmer oil price is helping to support the likes of Chevron, while on the downside Boeing shares are still under pressure after Chinese authorities said they had recovered one of the flight data recorders from the crash scene in China.”
Oil prices pulled back from their earlier gains by dinnertime in New York, with West Texas Intermediate futures last down 0.44% on NYMEX at $114.43 per barrel, while Brent crude’s ICE quote was unchanged at $121.60.
The yield on the benchmark 10-year Treasury note eased off slightly from the previous session, but remained elevated at 2.303%.
Market participants also continued to digest the latest headlines on the Ukraine-Russia conflict, with Ukrainian president Volodymyr Zelenskyy calling for more pressure on Russia from other nations as the invasion looked set to be entering a stalemate.
On the macro front, mortgage applications sank 8.1% in the week ended 18 March, according to the Mortgage Bankers Association, as mortgage rates surged to their highest level in three years.
Applications to refinance a home loan declined 14.4%, while those to purchase slipped 1.5% as the average fixed 30-year mortgage rate increased by 23 basis points to 4.50% – the highest since early 2019.
Elsewhere, sales of new US single-family homes unexpectedly fell in February, according to figures released on Wednesday by the Commerce Department.
New home sales declined by 2% from January to a seasonally-adjusted annual rate of 772,000.
Analysts had been expecting a level of 810,000.
The median price of a new home, meanwhile, fell to $400,600 from $427,400 in January.
In the corporate space, Cheerios pusher General Mills was up 2.47% after it raised full-year sales and profit forecasts on the back of higher prices and elevated demand for food at home.
Meme stock GameStop was in focus again, rocketingg 14.5% after its chairman Ryan Cohan bought another 100,000 shares in the company, taking his holding to 11.9%.
On the downside, camper giant Winnebago plunged 11.77%, even after it reported a 39% jump in second-quarter revenues.
Moderna was off 4.28%, despite finding that its Covid-19 vaccine is effective on children aged under six, and announcing it would apply for emergency use authorisation in the US and Europe.
Thursday newspaper round-up: Cost of living crisis, economic growth, flexible working
Some food bank users are declining items such as potatoes as they cannot afford the energy to boil them, the boss of the supermarket Iceland has said, as the soaring cost of living pushes vulnerable groups to the financial brink. Richard Walker, who says the 1,000-stores in the budget chain are in the “poorest communities in the UK”, also called on the government to help businesses that are being forced to increase prices significantly as their own costs dramatically increase. – Guardian
The war in Ukraine is to slash economic growth in Britain this year as inflation wrecks household budgets and taxes rise, the fiscal watchdog has warned. The Office for Budget Responsibility delivered a slew of downgrades in its forecasts after the Chancellor warned the conflict risks “significantly” worsening the economy and public finances. – Telegraph
Rising energy costs threaten to sabotage Boris Johnson’s plans for an electric vehicle revolution, car industry chiefs have warned. Manufacturing electric cars requires large amounts of energy, while higher bills could also deter drivers from switching from petrol-powered models. – Telegraph
Flexible working is a deciding factor for young employees in choosing whether to accept a job or look for a new one. Research by the Kantar consultancy found that 86 per cent of “Generation Z”, aged 18 to 24, and 85 per cent of millennials, aged 25 to 39, said that flexible home working policies are one of the main factors they consider when deciding whether to accept a job compared with 66 per cent of boomers, aged 56 to 75. The online survey of 7,985 employees across eight countries including the UK was conducted in January. – The Times
The Russian stock market was set to reopen early this morning after being shut for almost a month following the invasion of Ukraine. Trading on the Moscow Exchange has been suspended since the end of February in an effort to stabilise the market. On February 24, the day of the invasion, the Moex index of leading Russian stocks dropped by as much as 45 per cent, the most on record, as investors rushed to sell their holdings. The index clawed back some of those losses the following day — the last session before it was closed. – The Times
