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ADVFN Morning London Market Report: Tuesday 20 February 2024

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London open: Stocks fall as miners slump; Barclays rallies after results


London stocks fell in early trade on Tuesday, with miners under pressure amid worries about China’s economy, but Barclays powered ahead after well-received results.

At 0840 GMT, the FTSE 100 was down 0.3% at 7,706.33.

Investors were mulling the latest policy announcement from China, where the PBoC kept the one-year loan prime rate (LPR) unchanged at 3.45%, as expected. However, it surprised markets by cutting the five-year LPR by 25 basis points to 3.95%. This marked the first time the five-year rate was cut since May 2023.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The fragility of China’s economy is weighing on minds as the country remains mired in a real estate slump with the latest attempt to stimulate demand highlighting the depths of the problems.

“The sharper-than-expected cut hasn’t done the trick of shoring up confidence yet. It’s concentrated minds on the collision of concerns about the economy, from real estate debts to deflation to falling foreign investment. Iron ore prices are trading around three-month lows, as hopes that demand for steel could rebound have ebbed away.

“Asian stocks dipped back again as worries continued about the economy, setting the scene for a lacklustre start to trading for the FTSE 100, with investors also mindful that high interest rates may be sticking around for longer in the United States.”

In equity markets, BHP was under the cosh as annual profits at the Australian mining giant slid after it took a massive hit on its nickel operations and the financial after-effects of the 2015 Samarco dam disaster in Brazil continued to dog the company.

Miners more generally were weak as metals prices fell, with Anglo AmericanRio TintoAntofagasta and Glencore all down.

National Express owner Mobico was in the red but off earlier lows after saying its results would be delayed by an accounting review of the German rail business. It also said an onerous contract provision was set to rise by between £40m and £70m.

On the upside, Barclays Bank surged as it reported a fall in annual earnings after fourth-quarter profits dropped by 92%, but said it plans to return at least £10bn of capital to shareholders between 2024 and 204, through dividends and share buybacks. The bank also announced a £2bn cost-cutting drive.

Kathleen Brooks, research director at XTB, said: “Barclays’ strategic review was punchy, and it essentially boils down to two things: cut costs aggressively and boost profits and continue to return capital to shareholders, to the tune of £10bn by 2026.

“This is exactly the type of message that shareholders love at the moment, and it is why the market has reacted with glee on Tuesday morning.”

InterContinental Hotels nudged up after full-year results, while Plus500 rallied as its full-year results came in “significantly ahead” of market expectations and the online trading platform announced plans for $175m in shareholder returns.

Domino’s Pizza gained after an upgrade to ‘buy’ from ‘hold’ at Jefferies, which lifted its price target on the shares to 430p from 410p.

Superdry rose sharply following a Sky News report that prominent US investor Davidson Kempner is among the parties being courted by founder Julian Dunkerton as he assembles an offer to take the struggling fashion chain private.


Top 10 FTSE 100 Risers

Sponsored by Plus500
# Name Change Pct Change Cur Price
1 Barclays Plc +4.31% +6.42 155.42
2 Aviva Plc +2.18% +9.40 439.70
3 Intercontinental Hotels Group Plc +2.00% +158.00 8,068.00
4 Centrica Plc +1.64% +2.15 132.95
5 Tui Ag +1.36% +7.50 558.50
6 Hsbc Holdings Plc +0.78% +5.00 643.20
7 Dcc Plc +0.76% +44.00 5,804.00
8 Marks And Spencer Group Plc +0.67% +1.60 240.10
9 Coca-cola Hbc Ag +0.61% +15.00 2,493.00
10 Relx Plc +0.56% +19.00 3,431.00


Top 10 FTSE 100 Fallers

Sponsored by Plus500
# Name Change Pct Change Cur Price
1 Rio Tinto Plc -2.39% -130.00 5,298.00
2 Anglo American Plc -2.28% -40.60 1,737.40
3 Bhp Group Limited -2.25% -53.50 2,324.50
4 Glencore Plc -1.97% -7.80 387.60
5 Rightmove Plc -1.60% -8.80 541.60
6 Carnival Plc -1.44% -15.50 1,062.50
7 Fresnillo Plc -1.28% -6.10 471.40
8 Ocado Group Plc -1.27% -6.80 527.80
9 Scottish Mortgage Investment Trust Plc -1.13% -9.00 788.00
10 Antofagasta Plc -0.99% -17.50 1,747.50


Tuesday newspaper round-up: Workers’ rights, Severn Trent, Superdry

Union leaders have warned business groups against pushing Keir Starmer to water down Labour’s plans to introduce sweeping reforms of workers’ rights and a ban on zero-hours contracts. As the Labour leader comes under pressure from industry to scale back its shake-up of employment laws, the Trades Union Congress (TUC) said the plans were “extremely popular” with voters and good for the economy. – Guardian

Severn Trent has been fined more than £2m for polluting the River Trent near Stoke, with the Environment Agency calling its storm contingency plans “woefully inadequate”. Huge amounts of raw sewage were discharged into the river from Strongford wastewater treatment works near Stoke-on-Trent, Staffordshire, between November 2019 and February 2020. – Guardian

The universities’ pension scheme has rejected a demand from academics to dump its investments in Israel, in a row over whether the conflict in Gaza can be branded “genocide”. The University and College Union (UCU), which represents more than 120,000 academics and support staff, wrote to the Universities Superannuation Scheme (USS) at the end of last month, urging “an immediate review” of assets linked to Israel’s administration. – Telegraph

The London restaurant owned by viral chef Salt Bae has defied the cost of living crisis as wealthy diners continue to splash out on steaks worth hundreds of pounds. Nusr-Et Steakhouse in Knightsbridge raked in millions of pounds in 2022 as the business cashed in on the popularity of owner Nusret Gökçe, otherwise known as Salt Bae. The celebrity chef has built a global restaurant empire ever since a viral video in 2017 showed him extravagantly cutting meat and sprinkling salt. – Telegraph

A prominent US investor is among the parties being courted by Superdry’s founder as he assembles an offer to take the struggling fashion chain private. Sky News has learnt that Davidson Kempner, which has backed a number of UK retailers, is in discussions with Julian Dunkerton about backing an offer for Superdry. – Sky News


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