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London open: Stocks gain after US tech rally
London stocks rose in early trade on Wednesday, taking their cue from a tech rally on Wall Street, which saw the Nasdaq end 1.3% higher.
At 0845 BST, the FTSE 100 was up 0.4% at 8,279.71.
Susannah Streeter head of money and markets at Hargreaves Lansdown, said: “An uptick in confidence has sent the FTSE 100 higher, after US tech staged a rebound, particularly the chipmaker Nvidia.
“Fears of a big imminent market wobble are now receding. However, there are still concerns hanging around about stubborn inflation, with a hotter than expected reading in Australia sending the ASX 200 in Sydney lower. Brent Crude has edged up slightly above $85 a barrel, amid continued geo-political concerns, even though there was an uptick in US crude stockpiles. This has raised questions about demand for energy across the vast economy given expectations higher interest rates are going to linger for longer.”
In equity markets, online electricals retailer AO World rose as it posted a big jump in full-year profit, topping its own guidance range as its plan to pivot the business to focus on profit and cash generation bore fruit.
In the year to the end of March 2024, adjusted pre-tax profit increased 186% to £34.4m even as revenue dipped 9% to £1.04bn. AO World had guided to profit coming in at the top end of a range of £28m to £33m.
Future rocketed after a double upgrade to ‘buy’ at Jefferies, which hiked the price target to 1,280p from 635p.
Deliveroo shares sparked following a report that US meal delivery group Doordash flagged interest in a takeover of the UK company last month. Reuters cited sources as saying that that San Francisco-based Doordash made the approach to Deliveroo, but talks ended after disagreement on valuation. It was understood there are no talks ongoing.
PZ Cussons was in the black after it said trading for the final quarter of the financial year met management expectations, with anticipated full-year revenue of £528m.
Insurance and pensions group Phoenix nudged lower as it said it was looking to offload its SunLife business after deciding it was no longer core to operations. Phoenix said it had received a “a number of initial expressions of interest from third parties”, but warned there could be no certainty at this stage that a disposal will occur.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | +2.72% | +34.00 | 1,285.00 |
| 2 |  |
Fresnillo Plc | +2.50% | +14.00 | 573.50 |
| 3 |  |
Rio Tinto Plc | +1.72% | +90.00 | 5,329.00 |
| 4 |  |
Bhp Group Limited | +1.69% | +38.00 | 2,284.00 |
| 5 |  |
Spirax Group Plc | +1.69% | +145.00 | 8,740.00 |
| 6 |  |
Associated British Foods Plc | +1.64% | +41.00 | 2,539.00 |
| 7 |  |
Burberry Group Plc | +1.62% | +15.80 | 988.40 |
| 8 |  |
Glencore Plc | +1.61% | +7.30 | 461.80 |
| 9 |  |
Centrica Plc | +1.51% | +2.05 | 138.00 |
| 10 |  |
Smith & Nephew Plc | +1.49% | +14.60 | 993.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | -1.32% | -195.00 | 14,605.00 |
| 2 |  |
Phoenix Group Holdings Plc | -1.23% | -6.50 | 520.00 |
| 3 |  |
Smurfit Kappa Group Plc | -1.00% | -36.00 | 3,580.00 |
| 4 |  |
Easyjet Plc | -0.93% | -4.30 | 459.30 |
| 5 |  |
Mondi Plc | -0.47% | -7.00 | 1,488.00 |
| 6 |  |
Admiral Group Plc | -0.42% | -11.00 | 2,616.00 |
| 7 |  |
Diageo Plc | -0.35% | -9.00 | 2,563.50 |
| 8 |  |
Smith (ds) Plc | -0.32% | -1.20 | 369.60 |
| 9 |  |
Itv Plc | -0.31% | -0.25 | 80.95 |
| 10 |  |
Vodafone Group Plc | -0.28% | -0.20 | 70.46 |
US close: Nvidia pushes S&P 500 and Nasdaq higher, but Dow drops
The Dow finished lower on Tuesday while the S&P 500 and Nasdaq rebounded after a three-day losing streak as Nvidia’s recent falls came to an end.
With just eight stocks in positive territory, the Dow finished down 0.8% at 39,113, suffering its worst daily performance in nearly a month, with Boeing among the worst performers after hitting headlines for a trio of negative reasons.
However, the S&P 500 rose 0.4% to 5,469, while the Nasdaq surged 1.3% to 17,718, as both indices recovered after recent losses, spurred by a 13% drop in the price of Nvidia since last Tuesday. The stock finished nearly 7% higher.
“Just as investors were starting to get worried about Nvidia’s share price entering a fourth day of declines, the chip giant has managed to shake off negative sentiment and bounce back,” said Dan Coatsworth, investment analyst at AJ Bell.
“What looked like a bout of profit taking in Nvidia now seems to have reversed, with investors potentially using recent share price weakness to load up on stock.”
In economic news, the S&P/Case-Shiller 20-city home price index showed annual growth slowing to 7.2% in April from 7.5% in March, though still well above the 6.9% consensus forecast as prices hit yet more record highs.
Meanwhile, the national consumer confidence index by the Conference Board fell to 100.4 from 101.3, but came in marginally ahead of the 100 reading expected. Dana M. Peterson, chief economist at The Conference Board, said confidence “remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future”.
Boeing drops, Carnival jumps
News that a Korean Air Boeing aircraft heading for Taiwan dropped 25,000 feet in five minutes following a fault with its pressurisation system was among the things to weigh on Boeing’s share price on Tuesday.
Separately, US prosecutors recommended overnight that the Department of Justice bring criminal charges against Boeing for violating a settlement related to two fatal crashes in 2018 and 2019.
Meanwhile, Boeing reportedly changed the offer terms for its takeover of Spirit AeroSystems from an all-cash offer to a mostly stock deal, with shareholders of the jet parts manufacturer expressing dissatisfaction with the stock falling 4%.
Also weighing on sentiment in the aerospace sector was an update from French giant Airbus which slashed its full-year earnings and delivery targets for the year as a result of a “degraded operating environment”.
Cruise line operator Carnival ended the session up nearly 9% after posting better-than-expected second-quarter results and raising its full-year guidance on the back of a record cumulative booked position for 2024.
Microsoft gained despite the EU accusing the company of violating competition regulations, through the “abusive” bundling of its Teams and Office products.
Tesla rose despite the news it is to recall more than 23,000 Cybertrucks after issues were found with its wipers and trunk-bed trims.
Wednesday newspaper round-up: Post Office, Aston Martin, Stellantis UK
The UK needs a system for recording misuse and malfunctions in artificial intelligence or ministers risk being unaware of alarming incidents involving the technology, according to a report. The next government should create a system for logging incidents involving AI in public services and should consider building a central hub for collating AI-related episodes across the UK, said the Centre for Long-Term Resilience (CLTR), a thinktank. – Guardian
A former IT engineer has admitted he changed crucial expert court testimony at the request of the Post Office during wrongful prosecutions of branch operators. Gareth Jenkins, a former senior engineer at the contractor Fujitsu, on Tuesday told the public inquiry into one of the biggest miscarriages of justice in British history that lawyers had asked him to change witness statements. – Guardian
Aston Martin has unveiled the design of a new limited-edition supercar for petrolheads as the British brand resists a push to scrap combustion engines. Marek Reichman, Aston Martin’s executive vice president and chief creative, said the Valiant would “honour the internal combustion [engine]”. Just 38 of the new vehicles which cost around £2m apiece will be manufactured and they have all already been allocated. – Telegraph
Europe’s richest man Bernard Arnault has bought personal shares in a rival to his luxury empire LVMH, in a move expected to fuel speculation over a possible takeover. Mr Arnault, the chairman and chief executive of LVMH, is understood to have taken a small stake in Richemont, which owns Cartier. The position, which was not available on public registers on Tuesday afternoon, was described by sources as a personal investment by the LVMH boss. – Telegraph
The boss of Stellantis UK has said the automotive powerhouse could stop production at its Luton and Ellesmere Port van factories unless a future government provides cash and tax incentives to stimulate demand for electric vehicles. Maria Grazia Davino, head of Stellantis UK, also said the UK must reduce zero emission volume targets for manufacturers. – The Times
The British subsidiary of Atos, the French tech giant that is a big UK government contractor, has warned in its accounts that there is a “material uncertainty” about its ability to continue as a going concern. In the accounts for Atos UK’s holding company for the year ending December 2022, Grant Thornton, the company’s auditor, said that the UK subsidiary was reliant on cash from its French parent company that may not arrive, given the French business’s growing problems. – The Times
