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London open: Stocks nudge up ahead of ECB announcement
London stocks nudged up in early trade on Thursday following an upbeat close on Wall Street, as investors awaited an expected 25 basis points rate cut from the European Central Bank.
At 0900 BST, the FTSE 100 was up 0.1% at 8,252.26.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has a spring in its step this morning, after taking its cue from Wall Street, where technology stocks rose sharply overnight. Closer to home, there’s renewed optimism that the ECB will cut interest rates in its decision later today, which is adding additional enthusiasm into equities.
“The lingering question, however, is what the interest rate roadmap looks like after June. Even if a cut arrives today, markets will be more interested in understanding expectations for the rest of the year.”
The ECB announcement is due at 1315 BST. On home shores, the S&P Global/CIPS construction PMI for May is scheduled for release at 0930 BST.
In equity markets, JD Sports was the standout riser on the FTSE 100 after US sportswear retailer Lululemon lifted its profit outlook.
Wood Group surged as it said late on Wednesday that it had decided to “engage” with Sidara after the Dubai-based engineering and consulting firm made an improved and final takeover proposal last week at 230p a share.
“The board remains confident in Wood’s strategic direction and its fundamental prospects,” it said.
“However, having now weighed all relevant factors including, in particular, feedback received from Wood shareholders, the board has decided to engage with Sidara to determine if a firm offer can be made on the same financial terms as the final proposal. Accordingly, the board will grant Sidara access to due diligence materials.”
Elsewhere, Mitie gained as the outsourcer said annual profits surged as revenues hit a record £4.5bn – in line with company expectations.
On the downside, Vodafone, WPP, Sainsburys, National Grid, Informa, Johnson Matthey, Assura and Energean were all weaker as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sage Group Plc | +1.97% | +20.50 | 1,059.00 |
| 2 |  |
Fresnillo Plc | +1.82% | +10.50 | 588.00 |
| 3 |  |
Burberry Group Plc | +1.80% | +18.50 | 1,045.50 |
| 4 |  |
Rightmove Plc | +1.58% | +8.80 | 566.60 |
| 5 |  |
Rolls-royce Holdings Plc | +1.35% | +6.10 | 459.40 |
| 6 |  |
Rentokil Initial Plc | +1.31% | +5.70 | 440.70 |
| 7 |  |
Anglo American Plc | +1.28% | +30.50 | 2,405.00 |
| 8 |  |
Melrose Industries Plc | +1.24% | +7.80 | 637.60 |
| 9 |  |
Crh Plc | +1.22% | +74.00 | 6,120.00 |
| 10 |  |
Antofagasta Plc | +1.16% | +25.00 | 2,176.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | -5.58% | -4.28 | 72.36 |
| 2 |  |
Wpp Plc | -4.51% | -36.40 | 770.20 |
| 3 |  |
National Grid Plc | -4.17% | -37.60 | 864.00 |
| 4 |  |
Johnson Matthey Plc | -3.44% | -59.00 | 1,657.00 |
| 5 |  |
Sainsbury (j) Plc | -3.28% | -9.00 | 265.00 |
| 6 |  |
Easyjet Plc | -1.60% | -7.80 | 479.50 |
| 7 |  |
Informa Plc | -1.17% | -10.00 | 841.40 |
| 8 |  |
Marks And Spencer Group Plc | -1.00% | -3.10 | 306.00 |
| 9 |  |
Hikma Pharmaceuticals Plc | -0.96% | -19.00 | 1,957.00 |
| 10 |  |
International Consolidated Airlines Group S.a. | -0.83% | -1.45 | 172.80 |
US close: S&P 500, Nasdaq hit new highs as Nvidia leads tech stocks higher
US stocks rose strongly on Wednesday with the S&P 500 and Nasdaq both finishing at new record highs on the back a big surge in the share price of chipmaker Nvidia, which topped a new market cap $3 trillion.
The S&P 500 rose 1.2% to a new high of 5,354.03, while the Nasdaq jumped 2.0% to 17,187.90, with Nvidia rising more than 5% to set a new record high, while stocks across tech sector performed well. The Dow, however, only gained 0.3% to 38,807.33.
Markets were bolstered by a less-than-expected rise in private-sector payrolls in May. According to ADP, job creation was 152,000 – the smaller reading this year – down from April’s revised 188,000 increase and versus expectations for a 173,000 jump.
“Stock indices are a sea of green on Wednesday and risk sentiment has improved markedly, as the market weighs up a plethora of bad economic news from the US and what this means for the Fed,” said Kathleen Brooks, research director at XTB. “Right now, this means a 62% chance of a first rate cut in the US in September; one week ago there was only a 42% chance that the first rate cut could come in September.”
Elsewhere on the macro front, mortgage applications sank by 5.2% in the last week of May, according to the Mortgage Bankers Association, extending the three-month high decline of 5.7% from the previous week.
S&P Global’s final reading for its services sector purchasing managers’ index for May was unchanged versus a preliminary reading at 54.8, but up from the preliminary print of 51.3.
The ISM’s service PMI surged to 53.8 in May, the highest reading in nine months, and well above estimates for a print of 50.8. Economic activity in the services sector rebounded after contracting in April for the first time since December 2022.
In other news, the Bank of Canada became the first of the central banks in the G7 to cut interest rates in the current monetary tightening cycle. As expected, the BoC reduced its benchmark interest rate from 5% to 4.75%.
Nvidia becomes second-largest public stock
Nvidia‘s big gains saw it overtake Apple to become the second-largest publicly listed stock in the world, with a market cap of $3.01trn. That’s ahead of Apple’s value of $3.0trn and second only to Microsoft, which is valued at $3.15trn.
Apple, Microsoft and a host of other tech stocks were putting in decent gains on Wednesday, including Amazon, Meta and Alphabet.
Also in the tech sector, Hewlett Packard was up double-digits after surpassing Wall Street expectations on both the top and bottom lines, driven by strong demand for its AI servers.
“Investors continue to seek new ways to play the red-hot AI theme and week after week they are finding more companies that are reaping the benefits of this modern tech revolution,” said Dan Coatsworth, investment analyst at AJ Bell. “In Hewlett Packard’s case, it also helps that it is keeping a lid on costs and free cash flow has been better than expected. Bundle up all these pieces of good news and it’s no wonder the shares are on fire.”
Elsewhere, cybersecurity firm CrowdStrike traded higher after reporting better-than-expected earnings and issuing strong guidance, while discount retailer Dollar Tree missed on estimates with its latest quarterly earnings and sales performances.
Thursday newspaper round-up: Nvidia, Rishi Sunak, M&S
Shares of Nvidia rallied to record highs on Wednesday, with the artificial-intelligence chipmaker’s stock market valuation hitting the $3tn mark and overtaking Apple to become the world’s second most valuable company. The chipmaker’s stock was up 5.16% at $1,224.40, giving Nvidia a market value of $3.01tn at market close. Apple’s market capitalization was at $3.00tn at market close as its stock climbed 0.78%. – Guardian
The UK’s statistics watchdog has opened an investigation into remarks made by Rishi Sunak about the economy “going gangbusters” amid concerns that politicians could misuse economic data in the run-up to the election. Sir Robert Chote, chair of the UK Statistics Authority, will examine whether the prime minister repeated comments that were “taken out of context” and exaggerated the Conservative party’s economic record. – Guardian
Germany has announced €23bn (£20bn) in income tax cuts to help struggling households with inflation. Christian Lindner, the German finance minister, on Wednesday laid out plans to raise income tax thresholds. The move will be worth €430 for every working adult in Germany over the next two years. – Telegraph
A decision to award the contract to run the National Lottery was “unfairly favourable” to Czech bidder Allwyn, lawyers for former Daily Express owner Richard Desmond have claimed. In the High Court on Wednesday, lawyers for the media mogul’s Northern & Shell alleged there were conflicts of interest during the bidding process to run the prize for the next decade and that the competition was “seriously flawed”. – Telegraph
A director of Marks & Spencer Group (M&S) is quitting the retailer’s board after being blindsided about the poaching of its new finance chief from another company he chairs. Sky News has learnt that Andrew Fisher, a long-serving M&S non-executive director, only discovered late in the recruitment process that M&S intended to hire Alison Dolan from Rightmove, the listed digital property portal, as its chief financial officer. – Sky News
