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London open: Stocks edge up as oil giants rally
London stocks edged higher in early trade on Thursday following a positive close on Wall Street, and helped along by a strong showing from oil giants BP and Shell.
At 0855 GMT, the FTSE 100 was up 0.2% at 7,485.89, with the session likely to be quiet as US markets will be closed for Thanksgiving.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 has opened on the front foot buoyed by the feel-good holiday vibe emanating from the US, as Wall Street headed into the Thanksgiving weekend.
“With worries about another hike from the Fed now largely put to bed, and the economy showing fresh signs of resilience, there is hope that a soft landing will be achieved despite interest rates scaling such heights. As turkey dinners take centre stage today, trading will be thin.”
On home shores, the S&P Global/CIPS preliminary manufacturing and services PMIs for November are due at 0930 GMT.
In equity markets, BP and Shell were among the top performers on the FTSE 100 as oil prices bounced back.
Product inspection, testing and certification company Intertek gained as it said it’s on track to deliver on targets for 2023 after a solid third quarter, though currency movements were limiting growth more than expected.
BAE Systems was on the rise as JPMorgan lifted its price target on the shares to 1,300p from 1,150p.
“BAE faces a decade of growth and visibility,” JPM said. “It has strong free cash flow, which should mean it continues to pay an attractive dividend and buy back stock every year (which we assume in our forecast through to 2027).”
On the downside, Vodafone, British Land, Land Securities, Liontrust Asset Management, National Grid and Great Portland Estates were all weaker as they traded without entitlement to the dividend.
Transport operator FirstGroup fell even as it posted a jump in first-half profit and revenue and hailed a strong performance in both bus and rail.
Virgin Money was in the red as it reported a drop in full-year profits after it set aside £309m for credit card impairment charges.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | +1.23% | +17.50 | 1,435.00 |
| 2 |  |
Smurfit Kappa Group Plc | +1.18% | +32.00 | 2,744.00 |
| 3 |  |
Bp Plc | +1.18% | +5.50 | 471.65 |
| 4 |  |
Sse Plc | +1.06% | +19.00 | 1,809.00 |
| 5 |  |
Hsbc Holdings Plc | +1.05% | +6.40 | 613.10 |
| 6 |  |
Anglo American Plc | +1.03% | +23.00 | 2,261.00 |
| 7 |  |
Bae Systems Plc | +0.99% | +10.50 | 1,071.50 |
| 8 |  |
Barratt Developments Plc | +0.93% | +4.60 | 497.20 |
| 9 |  |
Intertek Group Plc | +0.91% | +35.00 | 3,864.00 |
| 10 |  |
Ashtead Group Plc | +0.89% | +42.00 | 4,767.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | -5.02% | -3.76 | 71.16 |
| 2 |  |
British Land Company Plc | -3.48% | -12.60 | 349.60 |
| 3 |  |
Easyjet Plc | -3.01% | -12.70 | 409.30 |
| 4 |  |
National Grid Plc | -2.71% | -28.00 | 1,005.50 |
| 5 |  |
Imperial Brands Plc | -2.45% | -46.00 | 1,832.50 |
| 6 |  |
Tui Ag | -2.20% | -11.00 | 490.00 |
| 7 |  |
International Consolidated Airlines Group S.a. | -1.89% | -3.00 | 155.80 |
| 8 |  |
Carnival Plc | -1.64% | -17.00 | 1,022.00 |
| 9 |  |
Land Securities Group Plc | -1.49% | -9.60 | 635.40 |
| 10 |  |
Whitbread Plc | -1.47% | -49.00 | 3,295.00 |
US close: Stocks rise ahead of Thanksgiving holiday
Wall Street finished with gains on Wednesday, driven by the release of the Federal Reserve’s latest policy meeting minutes overnight, which indicated a cautious approach to interest rate cuts.
Investors also considered fresh economic data, including jobless claims and consumer sentiment figures, in anticipation of the Thanksgiving holiday.
The Dow Jones Industrial Average closed with a 0.53% increase, reaching 35,273.03 points.
Similarly, the S&P 500 saw a 0.41% rise, closing at 4,556.62 points, while the Nasdaq Composite gained 0.46%, finishing the day at 14,265.86 points.
In the currency market, the dollar was last up 0.01% on both sterling and the euro, trading at 80.05p and 91.85 euro cents, respectively.
Conversely, the greenback decreased 0.04% against the yen to change hands at JPY 149.48.
“Historically, US stocks tend to do well in the run-up to Thanksgiving, and this upward bias continues to exhibit itself despite the huge gains made over the past month,” said IG chief market analyst Chris Beauchamp.
“Traders on Wall Street can skip off to their turkey and pumpkin pie with satisfaction, having restored the bullish trend of the half of the year, exemplified by the Nasdaq 100 hitting its highest level since January 2022.
“While the Fed minutes did not deliver any reasons to hope for early rate cuts, investors can be thankful that no more rate hikes appear likely.”
Job market shows unexpected strength, consumer confidence dips
In economic news, the US job market displayed unexpected strength last week.
According to the Department of Labor’s latest report, when adjusted for seasonal factors, initial unemployment claims saw a notable decline of 24,000 during the week ended 18 November, reaching a total of 209,000.
That figure defied consensus expectations, which had projected 226,000 initial claims.
Furthermore, the four-week moving average decreased by 750, settling at 220,000.
In addition to the positive trend, secondary unemployment claims, representing those not filing for the first time and referencing the week ended 11 November, dropped by 22,000, with approximately 1.84 million such claims.
“One undershoot is not enough to determine if the rising trend in claims is starting to flatten,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“That said, leading indicators suggest claims will level off again soon.
“Layoff announcements and WARN notices – the best near-term leading indicators of jobless claims – have risen from their summer lows, but aren’t clearly trending higher.”
Contrasting that improvement in the job market, Americans’ overall confidence in the economy saw a dip in November, though there was a silver lining in their sentiments regarding personal finances.
According to a highly-watched survey by the University of Michigan, the consumer confidence index slipped from October’s reading of 63.8 to 61.3.
Within the index, a sub-category reflecting views on current economic conditions also declined, moving from 70.6 to 68.3.
Meanwhile, expectations regarding future economic conditions decreased from 59.3 to 56.8.
One noteworthy aspect was persistent concern among consumers regarding rising inflation.
Despite the mixed sentiment, the survey highlighted that Americans continued to anticipate higher inflation rates in the foreseeable future.
“More favourable current assessments and expectations of personal finances were offset by a notable deterioration in expected business conditions,” said the survey’s director, Joanne Hsu.
“In particular, long-run business conditions plunged by 15% to its lowest since July 2022.
“Younger and middle-aged consumers exhibited strong declines in economic attitudes this month, while sentiment of those aged 55 and older improved from October.”
Meanwhile, expectations for inflation one year ahead rose from 4.2% for October to 4.5% – their highest level since April 2023.
For the longer term, they increased from 3.0% to 3.2%.
“These expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation – consumers appear worried that the softening of inflation could reverse in the months and years ahead,” Hsu added.
Nvidia and Deere decline, HP rises on results
In equity markets, chipmaker Nvidia declined 2.46% after it reported third-quarter adjusted earnings and revenue that surpassed expectations but also issued a cautionary note.
The company warned that export restrictions related to China would impact its performance in the fourth quarter.
Agricultural equipment manufacturer Deere & Company also faced a downturn, with its shares falling by 3.11%.
The drop came after Deere issued guidance for fiscal year 2024 that fell short of market expectations.
On the upside, computing giant HP added 2.83% after it reported generally strong financial results and announced plans to introduce its first AI-powered PCs in the latter half of next year.
Thursday newspaper round-up: Energy bills, electric cars, oil prices
Households will begin the new year with a 5% increase in energy bills after the regulator raised the price cap to an average of £1,928 a year for the typical gas and electricity bill. Ofgem raised the maximum price that energy suppliers can charge their customers from £1,834 a year for the typical household between October to December, after a rise in global gas market prices after the start of the Israel-Hamas war last month. – Guardian
Britain has downgraded its forecasts for the takeup of electric cars over the next seven years as higher financing costs and rising energy prices threaten to cut the incentive for drivers to replace combustion engines. The latest forecast from the Office for Budget Responsibility (OBR), released alongside the chancellor’s autumn statement, said that just 38% of new vehicles sold in the UK in 2027 would be electric, down from the 67% it predicted in March. – Guardian
Bank losses across the Eurozone are beginning to mount as high interest rates hammer households and businesses, the European Central Bank has warned. ECB vice-president Luis de Guindos said lenders were beginning to see “early signs of strain” across balance sheets, fuelled by an increase in loan defaults and late repayments. – Telegraph
Oil prices slumped by as much as 5 per cent yesterday after the Opec+ alliance of big producer nations postponed a planned meeting amid an apparent disagreement over the extent of continued output curbs. Brent crude dipped as low as $78.41 at one stage before recovering some of its losses to trade down 1 per cent at about $81.58 a barrel last night. – The Times
Scottish ministers have been accused of ignoring the plight of hundreds of workers whose jobs have been threatened by the closure of the country’s only oil refinery. The energy giant Petroineos announced on Wednesday that its oil refinery in Grangemouth will close in spring 2025 because it could no longer compete with overseas rivals. – The Times
