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London open: Stocks nudge lower ahead of key US, UK data; GSK tumbles
London stocks nudged lower in early trade on Thursday as investors eyed the release of a key US inflation reading and the latest UK GDP data at the end of the week.
At 0950 BST, the FTSE 100 was down 0.1% at 8,221.48
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 is off to a weak start, just about holding off from extending Wednesday’s losses. This follows a relatively choppy trading session in the US, ahead of President Joe Biden and Donald Trump’s closely watched debate in Atlanta later today.
“There’s also news of a marked slowdown in China’s industrial profits for May, adding fuel to concerns over a protracted slowdown in this important economy.”
In equity markets, DS Smith jumped to the top of the FTSE 100 after Brazilian pulp maker Suzano said it had ended talks to buy International Paper. DS Smith agreed to be bought by International Paper in April for $7.2bn.
According to Reuters, a deal between Suzano and IP would have depended on IP abandoning its DS Smith bid. Mondi also gained.
Bunzl advanced as it upgraded its profit guidance for the year, citing improved margin performance and successful acquisitions.
Luxury timepiece seller Watches of Switzerland was in the black as it held current-year guidance and said it was “cautiously optimistic” after annual profits fell amid a wind-back of discretionary spending.
Moonpig shares sparked after the online greeting card retailer posted a jump in annual sales and profits.
Serco pushed higher as it upgraded its full-year profit guidance following “good” progress in the first half.
On the downside, GSK tumbled after the US Centers for Disease Control and Prevention (CDC) said late on Wednesday that it was narrowing its usage recommendation for all respiratory syncytial virus (RSV) vaccines and did not recommend their use for the under-60s.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smith (ds) Plc | +5.81% | +21.40 | 389.80 |
| 2 |  |
Direct Line Insurance Group Plc | +3.57% | +7.20 | 208.60 |
| 3 |  |
Mondi Plc | +3.01% | +44.50 | 1,522.50 |
| 4 |  |
Admiral Group Plc | +2.23% | +58.00 | 2,655.00 |
| 5 |  |
Auto Trader Group Plc | +1.37% | +11.00 | 813.80 |
| 6 |  |
Barclays Plc | +1.19% | +2.45 | 208.30 |
| 7 |  |
Relx Plc | +1.17% | +42.00 | 3,646.00 |
| 8 |  |
Bunzl Plc | +1.12% | +34.00 | 3,072.00 |
| 9 |  |
Bae Systems Plc | +1.09% | +14.50 | 1,342.50 |
| 10 |  |
Halma Plc | +1.08% | +29.00 | 2,709.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | -4.72% | -75.50 | 1,524.00 |
| 2 |  |
Burberry Group Plc | -3.14% | -30.20 | 931.60 |
| 3 |  |
3i Group Plc | -2.82% | -87.00 | 3,002.00 |
| 4 |  |
Associated British Foods Plc | -2.61% | -66.00 | 2,458.00 |
| 5 |  |
British American Tobacco Plc | -2.27% | -57.00 | 2,454.00 |
| 6 |  |
Anglo American Plc | -1.64% | -41.50 | 2,486.00 |
| 7 |  |
Ashtead Group Plc | -1.35% | -72.00 | 5,258.00 |
| 8 |  |
Severn Trent Plc | -1.19% | -29.00 | 2,413.00 |
| 9 |  |
Prudential Plc | -0.96% | -7.20 | 739.40 |
| 10 |  |
Sse Plc | -0.94% | -17.00 | 1,791.50 |
US close: Stocks end slightly higher, Whirlpool jumps
US stocks finished moderately higher on Wednesday with the S&P 500 and Nasdaq inching back towards their recent record highs on what was a relatively quiet day for data and earnings.
The second-quarter earnings season has officially begun, but doesn’t really ramp up for a couple of weeks when the heavyweight banking sector reports.
“With the second-quarter earnings season upon us, it is almost time for traders to take stock and seek clarity over whether equity market valuations are currently justified,” said Joshua Mahony, chief market analyst at Scope Markets.
The S&P 500 finished the session up 0.2% at 5,477.9, coming close to last week’s all-time closing high of 5,487.03, while the Nasdaq gained 0.5% to 17,805.16, a whisper below its peak of 17,862.23. The Dow meanwhile rose just 0.04% to 39,127.8.
In economic news on Wednesday, data showed that new-home sales plunged by 11.3% in May to an annualised rate of 619,000, down from a revised 698,000 the month before. This was well below the 640,000 expected by the market and the worst level since November.
The figures followed much worse-than-expected housing starts and existing home sales for May released last week. Nancy Vanden Houten, lead US economist at Oxford Economics, said that while upward revisions to prior months took mitigated the downside slightly, “sales for Q2 are tracking below our estimate, increasing the odds that we will make a downward revision to our forecast for Q2 residential investment”.
All eyes will now turn towards inflation data later in the week, with the US core personal consumption expenditures index – the Federal Reserve’s preferred gauge of inflation – due out on Friday morning. The annual rate of core PCE inflation is expected to have eased to 2.6% in May from 2.8% the month before.
Market movers
The biggest riser on the S&P 500 was home appliances group Whirlpool Corp which jumped 17% on the back of reports that German giant Bosch was considering a takeover big for the firm.
FedEx was also standout performer, surging 15% after the logistics group beat forecasts with its fourth-quarter results on both a profit and revenue basis, while next year’s guidance was more or less in line with estimates. UPS also rose in sympathy.
Amazon was providing a big lift as the stock rose nearly 4% to surpass the $2trn market cap mark for the first time in its history. Others in the tech sector like Apple, Microsoft, Salesforce and Tesla were also on the rise.
Please note, according to our data below, Chipotle‘s shares were down 98%, though it was the effect of a 50-for-1 stock split – one of the NYSE’s largest in history. Shares are now worth $65.86 each, compared with Tuesday’s closing price of $3,283.04.
Thursday newspaper round-up: Betting advertising, Ferrari, Mike Ashley
The UK’s current trade deal with the EU is not working and the country must stop “walking on eggshells” around the issue of building closer ties with its biggest trading partner, the director general of the British Chambers of Commerce (BCC) is expected to say. At the annual BCC global conference in London on Thursday, Shevaun Haviland will say that the UK must forge closer ties with the EU and the next government should focus on improving trading relations to grow the economy. – Guardian
The UK’s leading gambling charity has called on the next government to ban betting advertising at sports events and on pre-watershed television, citing research that indicates strong public support for stricter controls. The survey, for GambleAware, which comes amid the usual marketing frenzy that accompanies a major football tournament such as Euro 2024, found that two-thirds of people in the UK think there are too many betting adverts. – Guardian
Ferrari is to charge customers a €7,000 (£5,900) annual subscription fee in exchange for free battery replacements amid fears of burnout in its supercars. The luxury car maker will reportedly offer an extended warranty service for its next generation of electric and hybrid vehicles in a bid to allay concerns about ageing battery packs. The subscription will entitle drivers of supercars such as the €418,000 plug-in hybrid SF90 Stradale to a replacement battery after eight years, while defects will also be covered. – Telegraph
Mike Ashley, the billionaire founder of Sports Direct, is in talks with the Crown Estate to take full ownership of the Princesshay shopping centre in Exeter. Through his Frasers Group retail empire, Ashley is already the frontrunner to buy a 50 per cent stake in Princesshay from Nuveen, a US-based asset manager that invests the retirement savings of American teachers. – The Times
Car manufacturing output in the UK fell by nearly 12 per cent in May as assembly lines continued to retool for electric vehicles. The latest figures from the Society of Motor Manufacturers and Traders, the trade body, show production was down 11.9 per cent to 69,652 units last month. Almost three quarters of all cars built in Britain were exported to global markets, with 52.5 per cent going to the European Union followed by the US, on 18.2 per cent, and Turkey, which took 8 per cent of shipments. – The Times
