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London open: Stocks edge lower as investors eye US inflation reading
London stocks edged lower in early trade on Monday following a mostly downbeat Asian session, as investors eyed the release of the latest US inflation reading this week.
At 0820 GMT, the FTSE 100 was down 0.2% at 7,673.98.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Wariness has returned at the start of the week, as investors assess the risks of geo-political conflict, amid fresh signs of global economic slowdown and uncertainty about the trajectory of inflation.
“Such are the risks of the Israel-Gaza conflict widening, US Secretary of State Antony Blinken has embarked on a whistlestop diplomatic tour, in an attempt to calm inflamed tensions. It comes after Israel’s defence minister described the hostilities the country is facing as an axis rather than a single enemy. Concerns are rising that this could lead to fresh violence, particularly in Lebanon.”
Looking ahead to the rest of the week, all eyes will be on the US consumer price index for December, due on Thursday.
CMC Markets analyst Michael Hewson said the numbers have the potential to put the speculation about a March rate cut “firmly back in its box”.
On home shores, a survey out earlier from Make UK and PwC showed that manufacturers are more bullish about the sector’s prospects than they were 12 months ago.
The survey, which featured responses from over 200 senior manufacturing executives, found that 44.4% of companies see a moderate to significant improvement in industry conditions in 2024, compared with just 20.5% that expect conditions to worsen.
However, executives weren’t so rosy about economic conditions at home and abroad: 41% expect UK conditions to deteriorate, while 38% foresee a worsening of the landscape overseas.
Nevertheless, 53% said they see opportunities in new products in 2024, while 27% are expanding into new markets.
Manufacturers are also confident about the impact that digital technologies will have on productivity and operational efficiency, with 23% of leaders citing opportunities in net zero, digital tech, cloud and artificial intelligence.
“The last few years have been a rollercoaster of emotions for manufacturers, yet they have more than demonstrated their resilience time after time. We are now seeing some hope that conditions may be improving, amid a more supportive and stable policy environment, but this must be cemented within a long term industrial strategy,” said Stephen Phipson, chief executive of Make UK.
“While undoubted challenges remain, the accelerating use of digital technologies, our strength in innovation and expansion into new markets sets the scene for manufacturing to be at the heart of efforts to boost growth.”
In equity markets, Plus500 rallied as it said that for the year ended 31 December 2023, it generated revenue of about $725m and EBITDA of $340m, both of which are “significantly” ahead of current market expectations.
Online trading platform CMC Markets surged after it lifted its full-year net operating income guidance as it hailed a strong performance in the third quarter. The company now expects FY24 net operating income of between £290m and £310m, up from previous guidance of £250m to £280m.
In broker note action, housebuilders were in focus as Barclays upped Bellway to ‘overweight, but cut Barratt Developments and Berkeley to ‘equalweight’.
Legal & General gained after an upgrade to ‘buy’ from ‘hold’ at Berenberg, while Ashtead fell after a downgrade to ‘hold’ at HSBC.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | +1.76% | +9.80 | 567.20 |
| 2 |  |
Rolls-royce Holdings Plc | +1.35% | +4.00 | 300.60 |
| 3 |  |
Legal & General Group Plc | +1.23% | +3.00 | 246.80 |
| 4 |  |
Persimmon Plc | +1.04% | +14.50 | 1,411.50 |
| 5 |  |
Hargreaves Lansdown Plc | +0.89% | +6.40 | 728.60 |
| 6 |  |
Taylor Wimpey Plc | +0.87% | +1.25 | 145.65 |
| 7 |  |
Hsbc Holdings Plc | +0.77% | +4.90 | 639.20 |
| 8 |  |
Centrica Plc | +0.73% | +1.10 | 152.80 |
| 9 |  |
Easyjet Plc | +0.68% | +3.40 | 502.60 |
| 10 |  |
Relx Plc | +0.58% | +18.00 | 3,118.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Shell Plc | -2.04% | -52.50 | 2,518.50 |
| 2 |  |
Glencore Plc | -1.43% | -6.60 | 456.40 |
| 3 |  |
Ashtead Group Plc | -1.41% | -72.00 | 5,026.00 |
| 4 |  |
Wpp Plc | -1.25% | -9.60 | 760.60 |
| 5 |  |
Vodafone Group Plc | -1.16% | -0.82 | 69.58 |
| 6 |  |
Tui Ag | -1.11% | -6.50 | 581.00 |
| 7 |  |
Anglo American Plc | -1.10% | -20.60 | 1,850.20 |
| 8 |  |
Bhp Group Limited | -1.10% | -28.50 | 2,570.50 |
| 9 |  |
United Utilities Group Plc | -0.99% | -10.50 | 1,047.00 |
| 10 |  |
Fresnillo Plc | -0.99% | -5.40 | 538.60 |
Monday newspaper round-up: Post Office, Channel 4, Rolls-Royce
The Post Office is suspected of wrongly prosecuting dozens more operators who took part in a pilot scheme of the faulty Horizon system, the Guardian has been told. Amid growing anger over the treatment of postmasters whose lives have been ruined in the scandal, Whitehall sources have confirmed that a precursor scheme was rolled out in 1995 and 1996 to hundreds of branches in north-east England. – Guardian
Channel 4 is drawing up plans to cut potentially as many as 200 jobs in its biggest round of layoffs in more than 15 years, as it seeks to make savings to weather the worst TV advertising downturn since 2008. The broadcaster, which has undergone a rapid expansion in recent years with staff numbers swelling to a record level of more than 1,200, aims to dramatically reduce a wage bill that now stands at more than £108m a year. – Guardian
Britain is more attractive than Europe for manufacturing firms, factory bosses have said, as “a newfound sense of optimism” sweeps the industry. Most manufacturing chiefs believe the UK is now a competitive location for their business, according to a new report from industry group Make UK and PwC, and is set to pull further ahead of European rivals. The majority of bosses also believe Britain’s competitive edge over Germany, France, Italy and Spain will grow rather than shrink this year, the report found. – Telegraph
The record rise in the national living wage in April is taking Britain into a new era of government-directed pay deals, a leading retailer has warned. James Timpson, chief executive of the family-owned Timpson retail group, employs 5,600 people in its 2,100 shops, including 10 per cent who are ex-offenders with criminal convictions. – The Times
More people than ever before were prepared to splash out several hundred thousand pounds on a new Rolls-Royce last year, despite the cost of living crisis. Initial deliveries of its first zero-emission vehicle helped Rolls-Royce Motor Cars to another record, selling 6,032 cars last year, beating the 6,021 record achieved in 2022. – The Times
