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London open: Stocks in the red as oil giants hit by falling prices
London stocks fell in early trade on Tuesday, with oil giants under the cosh as oil prices retreated.
At 0835 BST, the FTSE 100 was down 0.3% at 8,236.04.
Investors were mulling industry data showing that UK retail sales inched higher in May, staging a minor rebound after a disappointing performance in April.
According to figures from the British Retail Consortium and KPMG, total sales were up 0.7% year-on-year last month, following a 4.0% annual decline in April, as a 3.6% increase in food sales managed to outweigh a 2.4% decline in non-food.
While non-food sales were down, the BRC noted that the two bank holidays in May helped drive growth in purchases of DIY and gardening equipment, as well as clothing, while computing sales reached their highest levels since the pandemic.
The overall growth rate was higher than the three-month average of 0.3%, but still came in below the 12-month average gain of 2.0%.
“Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month,” said the BRC’s chief executive Helen Dickinson.
“Retailers remain optimistic that major events such as the Euros and the Olympics will bolster consumer confidence this summer,” she said.
In equity markets, BP and Shell both gushed lower as oil prices fell. Darren Nathan, head of equity research at Hargreaves Lansdown, said: “Brent crude is down about another 0.5% today, to under $78 per barrel following prices cratering to four-month lows yesterday, after Opec+ nations revealed they would gradually phase out production cuts after September.”
British American Tobacco lost ground even as it said it remains on track to hit guidance this year after first-half trading met expectations.
Chemring was weaker after it hailed a record interim order book but posted a drop in underlying profit as its Tennessee countermeasures business was hit by adverse weather conditions.
On the upside, budget carrier Wizz Air nudged higher as it said May passenger numbers rose 2.1% although capacity was still impacted by the grounding of 45 Airbus aircraft due to issues with their Pratt & Whitney GTF engines. The airline carried 5.1 million passengers with a load factor of 91%, up from 90% from 2023. Capacity rose 1.2% year on year to 5.6 million seats.
Tritax Eurobox rallied after Brookfield Asset Management said it was in the early stages of assessing a possible cash offer for the company. Tritax confirmed in a statement late on Monday that it had not received a proposal from Brookfield.
Media group Future was boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg, which hiked its price target to 1,310p from 850p following “positive” first-half results.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | +4.84% | +53.00 | 1,147.00 |
| 2 |  |
Tui Ag | +2.09% | +12.00 | 587.50 |
| 3 |  |
National Grid Plc | +1.92% | +17.00 | 903.00 |
| 4 |  |
Melrose Industries Plc | +1.73% | +10.60 | 624.80 |
| 5 |  |
Severn Trent Plc | +1.57% | +37.00 | 2,394.00 |
| 6 |  |
United Utilities Group Plc | +1.19% | +12.00 | 1,018.00 |
| 7 |  |
Marks And Spencer Group Plc | +0.98% | +3.00 | 309.10 |
| 8 |  |
Dcc Plc | +0.96% | +55.00 | 5,770.00 |
| 9 |  |
Unilever Plc | +0.88% | +38.00 | 4,345.00 |
| 10 |  |
Smith & Nephew Plc | +0.85% | +8.40 | 992.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -4.52% | -17.30 | 365.40 |
| 2 |  |
Bp Plc | -3.70% | -17.80 | 463.40 |
| 3 |  |
Fresnillo Plc | -3.57% | -22.00 | 594.50 |
| 4 |  |
St. James’s Place Plc | -3.54% | -18.50 | 504.50 |
| 5 |  |
Anglo American Plc | -3.44% | -86.00 | 2,417.00 |
| 6 |  |
Standard Chartered Plc | -3.09% | -24.00 | 752.40 |
| 7 |  |
Crh Plc | -2.63% | -164.00 | 6,080.00 |
| 8 |  |
Antofagasta Plc | -2.62% | -58.00 | 2,157.00 |
| 9 |  |
Shell Plc | -2.43% | -67.50 | 2,715.00 |
| 10 |  |
Rolls-royce Holdings Plc | -2.34% | -10.80 | 450.10 |
US close: Stocks mixed following Dow’s big day
Wall Street stocks delivered a mixed performance on Monday after a big day for the blue-chip Dow Jones in the previous session.
At the close, the Dow Jones Industrial Average was down 0.30% at 38,571.03, while the S&P 500 advanced 0.11% to 5,283.40 and the Nasdaq Composite saw out the session 0.56% firmer at 16,828.67.
The Dow closed 115.29 points lower on Monday, taking a bite out of solid gains recorded in the previous session.
Optimism regarding a potential Joe Biden-led ceasefire in Gaza drove oil prices lower on Monday, with West Texas Intermediate down 3.60% and Brent Crude 3.69% lower, giving the president a boost as his predecessor and main rival Donald Trump was recently found guilty in the New York courts. However, the impact this will have on the polls remains to be seen.
On the macro front, S&P Global‘s manufacturing index was revised higher to 51.3 in May, up from a preliminary reading of 50.9 and last month’s 50 print, pointing to a modest improvement in the state of the manufacturing sector, while the Institute for Supply Management‘s manufacturing PMI unexpectedly edged lower to 48.7 in May from 49.2 in April, below forecasts of 49.6 and showing another contraction for the manufacturing activity as demand was soft again.
Elsewhere, construction spending fell by 0.1% month-on-month in April to a seasonally adjusted rate of $2.09bn, according to the Census Bureau, as public spending shrank by 0.2% and private spending fell by 0.1% – driven by a 0.3% decline in the non-residential segment.
In the corporate space, Nvidia shares were in the green after it announced new AI chips on Sunday before its latest model even shipped, while GameStop stock was up more than 20% amid speculation that the seller who inspired the 2021 short squeeze may be holding yet another big position in the retailer.
Tuesday newspaper round-up: Consumer spending, Nick Train, Sam Altman
Consumer spending growth is at its weakest in more than three years as higher council tax bills and the rising cost of broadband and mobile phones eat into household budgets, a report has said. The monthly snapshot of credit and debit card activity from Barclays found an improvement in consumer confidence as a result of falling inflation was not leading to a pickup in spending. – Guardian
Lawyers and HR experts expect an increase in employment tribunal cases as companies increasingly clamp down on working from home and staff become resentful that the flexibility they have enjoyed since the pandemic is being slowly rolled back. A number of companies are now advocating a full five-day return to the office, with others enforcing a minimum number of days in the workplace. Administrative staff at Boots, who previously worked in the office three days a week, will return to the office five days a week from September. Many US banks, such as Goldman Sachs, also expect senior staff to come in for the full week, and its chief executive, David Solomon, labelled remote working an “aberration”. – Guardian
Star fund manager Nick Train has paid himself an estimated £14m dividend despite apologising last month for a recent run of poor stock-picking. Accounts for Lindsell Train, the investment firm founded by Mr Train and Mike Lindsell, showed its founders shared a dividend pot worth £39m in the year to January. Mr Train and Mr Lindsell, with their spouses, each own around 36pc of the business. – Telegraph
The US owner of Channel 5 has agreed to a $8bn (£6.3bn) merger deal with a billionaire tech heir’s production company, signalling an end to a months-long takeover saga. Paramount, the TV and film studio formerly known as ViacomCBS, has reportedly agreed to the terms of a merger with Skydance, a company set up by David Ellison, whose father is the Silicon Valley mogul Larry Ellison. – Telegraph
London must not become a listings venue of “last resort” for companies with “dubious human rights records”, one of London’s leading fund managers has warned in a broadside against the City’s bid to host the $70 billion float of Shein. Peter Hugh Smith, chief executive of CCLA Investment Management, which oversees about £14 billion of assets and is an investor in Amazon, said reports that the Chinese fast fashion group was eyeing a float in the UK were “worrying”. – The Times
Sam Altman, chief executive of OpenAI, has quietly built up a portfolio of personal investments valued at almost $3 billion in technology companies, some of which do business with his artificial intelligence firm. Altman, 39, has become one of Silicon Valley’s most prolific investors with holdings in more than 400 companies, including Airbnb, Stripe and Reddit, managed by his family office. The scale of his investment empire was first reported by The Wall Street Journal. – The Times
