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ADVFN Morning London Market Report: Monday 16 January 2023

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London open: Stocks edge up as FTSE nears record highs

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London stocks nudged higher in early trade on Monday, heading towards a new record high, but the session could be fairly quiet as US markets are closed for Martin Luther King day.

At 0900 GMT, the FTSE 100 was up 0.1% at 7,852.38.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The attractiveness of the FTSE 100 is undimmed, with the index set to flirt again with record highs in early trade. The record closing high of 7,877 is in reach, and another surge in buying could see stocks surpass the best level of 7903, seen on May 22, 2018.

“Hopes that inflation will keep descending from its peak in the US, after encouraging data last week, saw Wall Street end on a Friday high, with positive vibes spilling over to Monday trades in Asia.

“With British consumers flexing their spending muscle over the Christmas period and the country looking more likely to have escaped falling into recession in 2022, the waves of optimism have been lapping over the London market.

“Investors appear to have fallen back in love with UK assets, after a difficult period when FTSE 100 was the wallflower among global indices. Confidence has rebounded as investors eye up China’s reopening, helping commodity stocks. A stronger than expected appetite from consumers has boosted the retail, travel and hospitality sectors, while banks are still riding the wave of higher interest rates.”

In corporate news, Qinetiq ticked up after saying it had won an £80m contract with the UK’s Ministry of Defence (MOD).

Marks & Spencer was in the black after it announced the opening of 20 new stores and the creation of 3,400 jobs.

Ashmore fell even as it posted a 2% rise in second-quarter assets under management to $57.2bn, with the investment manager hailing a strong performance from emerging markets.

Healthcare property investor and developer Assura was also weaker after a trading update.

Outside the FTSE 350, guarantor lender Amigo tumbled after saying it had failed to secure a commitment from a cornerstone investor to underwrite the whole of its £45m capital raise and that it is now looking for a syndicate of investors.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Halma Plc +1.55% +33.00 2,158.00
2 Taylor Wimpey Plc +1.31% +1.50 116.25
3 Marks And Spencer Group Plc +1.27% +1.85 147.75
4 Sainsbury (j) Plc +1.12% +2.70 243.70
5 Melrose Industries Plc +1.00% +1.50 151.55
6 Ocado Group Plc +0.99% +7.60 775.80
7 Prudential Plc +0.93% +12.00 1,305.00
8 Associated British Foods Plc +0.89% +16.00 1,811.00
9 Hsbc Holdings Plc +0.79% +4.70 595.90
10 International Consolidated Airlines Group S.a. +0.78% +1.22 158.5

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Rolls-royce Holdings Plc -2.00% -2.18 106.58
2 Admiral Group Plc -1.88% -41.00 2,143.00
3 Rio Tinto Plc -1.32% -82.00 6,137.00
4 Flutter Entertainment Plc -1.28% -160.00 12,310.00
5 Intercontinental Hotels Group Plc -1.22% -66.00 5,356.00
6 Compass Group Plc -1.19% -23.00 1,902.50
7 Bhp Group Limited -1.16% -32.50 2,781.00
8 Severn Trent Plc -0.90% -25.00 2,738.00
9 Johnson Matthey Plc -0.90% -20.00 2,198.00
10 National Grid Plc -0.77% -8.00 1,025.00

 

US close: Stocks rise as consumer inflation cools in December

Wall Street trading finished in positive territory on Thursday, as investors digested last month’s all-important consumer price index.

At the close, the Dow Jones Industrial Average was up 0.64% at 34,189.97, as the S&P 500 added 0.34% to 3,983.17 and the Nasdaq Composite was 0.64% firmer at 11,001.10.

The Dow closed 216.96 points higher on Thursday, extending the gains it recorded in Wednesday’s session.

“While the job picture remains strong, the Fed will be pleased to see that the inflation outlook is getting better too,” said IG chief market analyst Chris Beauchamp.

“Steady declines in the rate of price increases might not be too much comfort for consumers, but they are music to the ears of stock investors.

“For the dollar, however, it sets the scene for further declines, continuing the trend from the end of last year.”

December’s CPI print was in focus, with the data revealing that the cost of living in the US had slipped a tad more than expected last month.

According to the Department of Labor, the annual rate of headline consumer prices fell from 7.1% for November to 6.5% in December, beating consensus estimates for a print of 6.6%.

At the core level, which strips out the volatile food and energy components, CPI was up by 5.7% year-on-year, versus 6.0% in the month before and in line with economists’ forecasts.

Investors would be using the report to assess the outlook for the Federal Reserve’s rate-hiking campaign, with declining inflation likely to lead the central bank to halt its rate-rising campaign in the spring.

Elsewhere on the macro front, Americans filed unemployment claims at a decelerated clip in the seven days ended 7 January, hitting their lowest level in more than three months.

According to the Labor Department, initial jobless claims fell by 1,000 to 205,000, well and truly short of the 215,000 figures expected on the Street, adding to recent evidence of a tight labour market.

In equities, floundering retailer Bed Bath & Beyond rocketed 50.14%, extending the meme stock’s gains after it recorded its biggest single-day rise ever on Wednesday.

Walt Disney was ahead 3.61% after it announced Nike executive chairman Mark Parker would become its new chairman.

American Airlines Group ascended 9.71% after saying it expected profits to rise further in the fourth quarter.

The other legacy carriers were in the green as well, with Delta Air Lines up 3.72% and United Airlines 7.52% firmer.

 

Monday newspaper round-up: Prepayment meters, Revolut, Marks & Spencer

Leading energy suppliers have stopped reclaiming debts from some prepayment meter customers amid calls for an industry moratorium on clawing back money owed through the devices. The Guardian understands that ScottishPower, which has nearly five million customers, has stopped recovering outstanding debts from people who have been moved on to prepayment meters in recent weeks. – Guardian

Britain’s most valuable fintech company, Revolut, is assembling a team to track whether staff are being “approachable” and “respectful”, as it tries to address criticism about an aggressive corporate culture and secure a UK banking licence. While the crypto trading to payments company is valued at $33bn (£27bn) and boasts 25 million customers and 6,000 staff in offices stretching from London to Tokyo to São Paulo, it has so far lacked a UK licence that would bring the firm within regulated customer protection schemes. – Guardian

Buy now, pay later payments are to impact the credit scores of millions of people for the first time, The Telegraph can reveal. Zilch, a British buy now pay later business with three million users, is to start sharing data on customers’ balances and repayments with credit rating agencies in a move that could see people’s ability to borrow restricted if they fall behind on payments. – Telegraph

Marks & Spencer is stepping up its store opening programme with the launch of 20 “bigger and better” new shops throughout Britain and the creation of 3,400 jobs. While other retailers are switching online or are disappearing from the high street, Stuart Machin, the chain’s co-chief executive, said he was committed to offering “great shops”, in spite of previously announcing plans to close 67 underperforming branches. – The Times

Profits at Crispin Odey’s hedge fund business halved in its last financial year after a sharp drop in performance fees. Partners at Odey Asset Management shared in £18.8 million profits in the year to April 5, 2022, down from a bumper £39.7 million a year earlier, according to accounts filed at Companies House at the weekend. – The Times

 

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