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London open: Stocks nudge lower; Diploma surges on acquisition
London stocks nudged lower in early trade on Wednesday following a slightly weaker close on Wall Street.
At 0825 GMT, the FTSE 100 was down 0.1% at 7,925.25.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Caution continues to reign after another day of decline on Wall Street with the FTSE 100 not expected to make significant moves in early trade.
“Many investors seem a little wary as New York indices hang near record levels, trade tensions between the US and China bubble and key data out on Friday threatens to show US inflation is still stubborn.”
In equity markets, Diploma shot to the top of the FTSE 100 after saying it had bought Peerless Aerospace Fastener, a distributor of specialty fasteners into the US and European aerospace markets, for £236m.
DS Smith – which recently agreed to be taken over by Mondi – also racked up strong gains after confirming late on Tuesday that it was in talks with New York-listed International Paper about a possible takeover offer.
Under the terms of the proposal, DS Smith shareholders would receive 0.1285 shares in International Paper for each of theirs, meaning they would own around 33.8% of the combined entity.
Based on International Paper’s share price of $40.85 at the close on Monday, this represents 415p and a premium of 45% to the closing DS Smith share price on 7 February, which was the last day before the start of the offer period with Mondi.
BA and Iberia owner IAG flew higher as JPMorgan Cazenove placed the shares on ‘positive catalyst watch’ ahead of first-quarter results.
It said the Q1 results could be a catalyst to spur consensus 2024E EBIT upgrades on the stock, given a more positive pricing backdrop both for Q1 and into the summer.
CMC Markets surged after saying that FY 2024 net operating income was set to exceed the top end of the previously-guided range of £290m to £310m as positive momentum continued into the fourth quarter after a strong performance in Q3.
North Sea oil and gas producer Ithaca Energy was higher after saying it was looking at a potential tie-up with Italy’s Eni covering its UK assets. It also reported a slump in annual profits, blaming the British government’s energy tax and project impairments.
Elsewhere, Travis Perkins was in the black as it said chief executive Nick Roberts was stepping down from his position and the company’s board after serving for five years.
On the downside, TI Fluid Systems slumped after BC Omega Holdco sold 50m ordinary shares in the company in a placing. BC Omega Holdco is an entity indirectly controlled by investment funds advised by Bain Capital, LP or its affiliates.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smith (ds) Plc | +6.78% | +24.40 | 384.20 |
| 2 |  |
Sainsbury (j) Plc | +2.97% | +7.80 | 270.30 |
| 3 |  |
International Consolidated Airlines Group S.a. | +1.90% | +3.15 | 169.15 |
| 4 |  |
Associated British Foods Plc | +1.50% | +37.00 | 2,510.00 |
| 5 |  |
Astrazeneca Plc | +1.25% | +130.00 | 10,570.00 |
| 6 |  |
Carnival Plc | +1.15% | +14.00 | 1,230.00 |
| 7 |  |
Coca-cola Hbc Ag | +0.92% | +23.00 | 2,533.00 |
| 8 |  |
Marks And Spencer Group Plc | +0.87% | +2.30 | 266.20 |
| 9 |  |
Crh Plc | +0.61% | +42.00 | 6,940.00 |
| 10 |  |
Rentokil Initial Plc | +0.51% | +2.40 | 468.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
St. James’s Place Plc | -2.89% | -13.40 | 449.80 |
| 2 |  |
Flutter Entertainment Plc | -2.72% | -465.00 | 16,630.00 |
| 3 |  |
Bp Plc | -1.63% | -8.15 | 491.65 |
| 4 |  |
Kingfisher Plc | -1.60% | -4.00 | 245.80 |
| 5 |  |
Smiths Group Plc | -1.42% | -24.00 | 1,666.00 |
| 6 |  |
Hsbc Holdings Plc | -1.42% | -8.90 | 618.40 |
| 7 |  |
National Grid Plc | -1.37% | -14.50 | 1,043.00 |
| 8 |  |
Ocado Group Plc | -1.28% | -6.00 | 461.30 |
| 9 |  |
Anglo American Plc | -1.26% | -24.20 | 1,893.40 |
| 10 |  |
Severn Trent Plc | -1.19% | -30.00 | 2,496.00 |
US close: Stocks continue their retreat from record highs
A late dive sent US stock markets into the red on Tuesday, extending their recent losing streak into its third day, as investors continued to take profits following last week’s record highs.
Economic data released during the session was relatively positive, but that wasn’t enough to keep equities above water following early gains, with eyes turning to additional key indicators due in the coming days.
The Dow slipped 0.1%, the S&P 500 fell 0.3% while the Nasdaq declined 0.4%, with all three benchmarks continued to pull back after hitting fresh closing highs last Thursday.
“US stocks faced challenges as market participants grappled with reigniting the previous rally,” said Stephen Innes, managing partner at SPI Asset Management. “Investors remained cautious as they awaited economic data in a holiday-shortened week, seeking clues about the Federal Reserve’s future policy direction.”
Economic data comes in strong
US durable goods orders rose more than expected last month. According to the U.S. Department of Commerce, in seasonally adjusted terms, orders increased 1.4% over the month of February to $277.9bn, ahead of the 1% rise predicted.
The S&P/Case-Shiller 20-City Composite index showed prices in January were up 6.6% on last year, picking up from the 6.2% annual growth seen in December. This was slightly below the 6.7% increase expected by economists but the highest rate of growth since November 2022.
Lastly, the Conference Board’s US consumer confidence index came in at 104.7 this month, more or less unchanged from a downwardly revised 104.8 in February, but slightly under the 107 expected by analysts. Improving perceptions about the current economic climate were offset by rising anxiety about future conditions.
Later in the week, we’ll see revisions to fourth-quarter GDP figures on Thursday and the all-important PCE price index – the Federal Reserve’s preferred measure of inflation – on Friday, though markets will be closed that day for the Good Friday holiday.
Market movers
Truth Social parent company Trump Media & Technology Group surged on its debut on the Nasdaq, but pared earlier gains by the close of play. The stock was up 40% early on, but finished the session up 16%, giving the company a market value of around $7bn.
Food company McCormick & Co jumped 10.5% after impressing with its fiscal first-quarter results, as a rise in prices and fall in costs managed to make up for falling sales.
Transport and logistics giant UPS fell 8% as the market reacted to comments made by the company on an investor day. UPS largely beat consensus forecasts with its forward guidance for 2026, but warned of short-term headwinds affecting trading in the current quarter.
UK-listed packaging company DS Smith – which recently agreed to be taken over by Mondi – confirmed it was in talks with US-listed International Paper about a possible takeover offer, causing shares in the latter to slide 6.5%.
Wednesday newspaper round-up: AI, CBI, US government debt
Almost 8 million UK jobs could be lost to artificial intelligence in a “jobs apocalypse”, according to a report warning that women, younger workers and those on lower wages are at most risk from automation. The Institute for Public Policy Research (IPPR) said that entry level, part-time and administrative jobs were most exposed to being replaced by AI under a “worst-case scenario” for the rollout of new technologies in the next three to five years. – Guardian
The CBI has used gagging clauses to prevent staff from discussing their experiences of sexual misconduct and bullying at the organisation, the Guardian can reveal. Up to 10 non-disclosure agreements (NDAs) have been signed in the past year after the lobbying group’s sexual misconduct scandal, in which more than a dozen staff alleged they had been victims of sexual harassment, assault and rape. Those agreements have been accompanied by substantial financial settlements from the CBI. – Guardian
Europe plans to build enough new gas power stations to supply 60 million homes despite a target of decarbonising electricity grids by the middle of the 2030s. About 72 gigawatts-worth of new gas-fired power stations are planned across the Continent, according to a report from pressure group Beyond Fossil Fuels. Gas power capacity across the Continent is on track to rise by 27pc under current proposals, despite a promise among G7 nations to decarbonise electricity grids by 2035. – Telegraph
The boss of the world’s biggest investment group has warned that “snowballing” US government debt has reached “very dangerous” levels. Larry Fink, the chairman and chief executive of BlackRock, raised the alarm in his annual letter to investors, saying that “in America, the situation is more urgent than I can ever remember”. – The Times
Two Nottingham-based entrepreneurs have banked more than £100 million after they sold their graphic design software company to Canva, of Australia, in a deal worth “several hundred million pounds”. Gary Bates, 54, and Jim Bryce, 59, owned about two thirds of Serif, which is known for its Affinity range of software for professional designers. – The Times
