ADVFN Morning London Market Report: Tuesday 29 November 2022

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London open: Stocks rally amid China easing hopes


London stocks rose in early trade on Tuesday, with commodities pacing the gains amid hopes China will ease Covid restrictions.

At 0850 GMT, the FTSE 100 was up 0.9% at 7,539.68.

Victoria Scholar, head of investment at Interactive Investor, said: “Risk-on sentiment has lifted European equities this morning boosted by a rally overnight in China after the health authorities held a briefing this morning in response to the recent rare protests.

“After Monday’s losses, Chinese markets are staging gains with the Hang Seng surging more than 5%, the Shanghai Composite rallying over 2% and the Hang Seng Tech Index up by more than 5.5%.

“Markets were pushing higher overnight in anticipation of this morning’s Covid briefing held by China’s health authorities at 3pm local time in which they announced plans to increase vaccinations for the elderly and to reduce the time gap between basic vaccination and boosters to three months for those aged 80 and above.

“The authorities insisted that people’s complaints are about extra covid measures and a one size fits all approach rather than the measures themselves.”

In equity markets, Asia-focused Prudential surged to the top of the FTSE 100 following strong gains in Chinese equity markets.

Miners – which are heavily dependent on demand from China – also gained, with RioAnglo AmericanGlencore and Antofagasta all up.

West End landlord Shaftesbury was higher after saying it swung to a full-year profit as it returned to pre-pandemic occupancy. In the year to 30 September, the company swung to a profit after tax of £119.1m from a loss of £194.9m the year earlier. However, this was below consensus expectations of £348.5m.

Budget airline easyJet flew lower even as it said it narrowed full-year losses and that it was ramping up preparations for next summer as travellers looked for value for money during the cost-of-living crisis. The company posted an annual pre-tax loss of £208m compared with a £1bn loss during the Covid pandemic which shut down air travel.

In broker note action, Admiral was knocked lower by a downgrade to ‘hold’ at HSBC, while Sage was weaker after an initiation at ‘sell’ by GoodbodyIMI was down after a cut to ‘sell’ at UBS.

On the upside, Rotork rose after an upgrade to ‘buy’ at UBS.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Prudential Plc +4.70% +43.60 972.00
2 Rio Tinto Plc +3.17% +170.00 5,533.00
3 Anglo American Plc +3.17% +100.50 3,274.00
4 Standard Chartered Plc +2.45% +14.20 594.00
5 Bhp Group Limited +2.13% +52.50 2,519.50
6 Dcc Plc +1.68% +74.00 4,484.00
7 Bp Plc +1.58% +7.65 491.20
8 Shell Plc +1.57% +37.00 2,397.50
9 Glencore Plc +1.54% +8.30 546.60
10 Antofagasta Plc +1.43% +19.00 1,346.50


Top 10 FTSE 100 Fallers

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79% of retail CFD accounts lose money.
# Name Change Pct Change Cur Price
1 Easyjet Plc -4.50% -17.70 375.30
2 Halma Plc -2.82% -64.00 2,207.00
3 Admiral Group Plc -2.19% -44.50 1,989.50
4 Ocado Group Plc -1.89% -12.00 621.80
5 Ferguson Plc -1.74% -170.00 9,604.00
6 Tui Ag -1.72% -2.55 145.35
7 Direct Line Insurance Group Plc -1.58% -3.40 212.30
8 Croda International Plc -1.45% -100.00 6,804.00
9 Ashtead Group Plc -1.22% -62.00 5,028.00
10 Experian Plc -1.19% -35.00 2,911.00


US close: Stocks head south on news of Chinese unrest

Wall Street stocks closed lower on Monday amid social unrest in China stemming from the nation’s ongoing Covid-19 restrictions.

At the close, the Dow Jones Industrial Average was down 1.45% at 33,849.46, while the S&P 500 lost 1.54% to 3,963.94 and the Nasdaq Composite saw out the session 1.58% weaker at 11,049.50.

The Dow closed 497.57 points lower on Monday, reversing gains recorded on Friday’s holiday-shortened trading session.

Demonstrations across mainland China were in focus on Monday, with people lashing out against Beijing’s zero-Covid policy after local governments doubled down on measures amid surging cases, even after certain policies were loosened earlier in November.

The developments saw oil futures drop to new lows for the year, before eventually reclaiming around half of their earlier losses, while shares in Apple, which has major operations in China, slipped more than 2.6% in after a report revealed that turmoil in the tech giant’s key manufacturing hub of Zhengzhou would likely lead to a production shortfall of roughly 6.0m iPhone Pro units this year.

Bucking the wider trend, retailers traded higher after reports revealed that Black Friday sales had smashed an online shopping record in 2022, with consumers spending an all-time high of $9.12bn online over the holiday, according to Adobe.

On the macro front, the Dallas Federal Reserve‘s manufacturing index increased to -14.40 points in November, up from -19.40 points in October. Prices paid for raw materials fell sharply to 22.6 from 32 in October, supporting lower inflation for prices, while, on the other hand, the production index fell to 0.8 points from 6 in the prior month, suggesting further deceleration in output growth.

On another note, a top US central bank official predicted that inflation will recede over the course of 2023, but said the Federal Reserve would still have its work cut out for it as price growth might not yet be headed towards its 2% target. In remarks prepared for a speech, New York Federal Reserve chief, John Williams, said that “there is still more work to do”. Williams said he believed that the annual rate of increase in the personal consumption expenditures price index would ease to between 5-5.5% at the end of 2022, versus 6.2% in September, and to between 3-3.5% by the end of 2023.

Elsewhere, one of the US Federal Open Market Committe’s most hawkish members made the case for interest rates to remain “elevated” throughout 2023 and into 2024. In a question and answer event hosted by, the head of the Federal Reserve Bank of St Louis, James Bullard, said that the central bank must maintain downward pressure on inflation until it was “clear” that it was going to achieve its 2% target for inflation. He added that in the current environment it would be a “terrible” idea for the Fed to abandon the 2% target.

While Q3 earnings season is now mostly under wraps, Salesforce will report earnings on Wednesday.


Tuesday newspaper round-up: Retailers, Elon Musk, LME

UK retailers have launched a barrage of discounts to try to clear stock after a month of falling sales as soaring inflation and bills hit households’ budgets and a warm autumn reduced demand for coats and boots. On Monday, New Look was offering a 50% discount off all products, Asos up to 80% off almost all lines and Boohoo 30% off everything, with many other fashion retailers – including Marks & Spencer, River Island and Matalan – offering between 20% and 30% cuts. – Guardian

Campaigners have called for an immediate ban on pre-payment meter (PPM) installations made under court warrants because of fears that energy suppliers are using them to disconnect the poorest, most indebted customers “by the back door”. Energy firms’ licence conditions protect many vulnerable people from formal disconnection over the winter, but the End Fuel Poverty Coalition said transferring households on to PPMs, which require regular top-ups and charge for energy at a higher rate, often prompted people in debt to “self-disconnect”. – Guardian

Elon Musk has threatened to “go to war” with Apple after accusing the iPhone-maker of stifling free speech on Twitter and threatening to block its app. Tesla and Twitter chief executive Mr Musk launched a tirade against Apple and its chief executive Tim Cook, pitting the world’s richest man against the world’s most valuable company. – Telegraph

The petrol forecourts business owned by the billionaire Issa brothers has been accused of profiteering after gross fuel profits rose by 20 per cent to $1.7 billion. EG Group, run by Mohsin and Zuber Issa, reported that total revenues rose by 29 per cent to $25 billion for the year to September 30. – The Times

The London Metal Exchange feared that a record rise in the price of nickel in March would cause $20 billion of margin calls that would drive a wave of defaults across the market, it has emerged. Documents filed by the exchange at the High Court yesterday have shed light on the scale of the chaos that gripped its nickel market in the early hours of March 8 when the price of its benchmark three-month futures contract on the metal briefly hit an all-time high of more than $100,000 a tonne. – The Times


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