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London open: FTSE nudges up ahead of US inflation reading
London stocks nudged higher in early trade on Wednesday, steadying after heavy losses in the previous session, but with gains muted ahead of the latest US inflation reading.
At 0830 GMT, the FTSE 100 was up just 0.1% at 8,032.97.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “There’s some relief for the FTSE 100, with the index making gains in early trade after a disappointing start to the week. However, it’s still hovering around three-month lows as concerns linger about global growth. China’s economy continues to be a worry, with the authorities’ attempts to inject the economy with stimulus seen as underwhelming.
“The impact of a second Trump term and its implications for global trade is also being mulled over. Brent Crude is trading close to two-week lows, as investors digest OPEC’s re-assessment of demand for energy across the world next year. The hot enthusiasm which powered Wall Street higher following Trump’s re-election has cooled off. Investors are assessing the realities of governing for Trump’s second term, while the control of the House of Representatives is yet to be decided, with critical votes still being counted.”
On the macro front, all eyes will be on the US consumer price index for October, which is due at 1330 GMT.
Streeter said: “The CPI report is expected to show an uptick in price pressures, bumping the annual rate back to 2.6% for October. Although the Fed’s preferred measure of inflation is the Core PCE reading, from the Personal Consumption Expenditures report, todays data is still expected to indicate how stubborn inflation might prove to be.
“It’s particularly pertinent given concerns that Trump’s tariff policies will be inflationary, increasing costs for American consumers, so if prices are already looking unruly, expectations will rise for Trump’s threats to be watered down.”
In equity markets, Smiths Group jumped to the top of the FTSE 100 as it raised its growth and margin guidance and beefed up its share buyback programme after an “outstanding” first quarter.
Flutter Entertainment was a high riser as it slightly lifted its full-year revenue and EBITDA guidance. Ladbrokes owner Entain also gained.
SSE was in the black as it posted a rise in half-year earnings and said its long-standing chief executive was standing down. SSE posted adjusted operating profits of £860.2m in the six months to September end, up on last year’s £693.2m. On a reported basis, operating profit rose 40% to £902.8m.
Weapons maker Babcock surged as it reported a sharp jump in half-year profits and held annual guidance as geopolitical tensions increased demand from governments for military hardware.
Trainline advanced on the back of an upbeat ‘Tempus’ column in The Times.
On the downside, Intermediate Capital and Experian were both weaker after results.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smiths Group Plc | +14.19% | +216.00 | 1,738.00 |
| 2 |  |
Flutter Entertainment Plc | +4.26% | +820.00 | 20,090.00 |
| 3 |  |
Astrazeneca Plc | +2.84% | +284.00 | 10,274.00 |
| 4 |  |
Jd Sports Fashion Plc | +2.09% | +2.45 | 119.70 |
| 5 |  |
Marks And Spencer Group Plc | +1.86% | +6.80 | 372.00 |
| 6 |  |
Antofagasta Plc | +1.48% | +24.00 | 1,646.50 |
| 7 |  |
Banco Santander S.a. | +1.37% | +5.00 | 369.00 |
| 8 |  |
Carnival Plc | +1.31% | +22.50 | 1,738.00 |
| 9 |  |
Wise Plc | +1.25% | +10.50 | 851.50 |
| 10 |  |
Rio Tinto Plc | +1.22% | +58.00 | 4,803.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Intermediate Capital Group Plc | -4.82% | -108.00 | 2,132.00 |
| 2 |  |
Bae Systems Plc | -1.45% | -20.00 | 1,361.50 |
| 3 |  |
Experian Plc | -1.24% | -48.00 | 3,814.00 |
| 4 |  |
Sage Group Plc | -1.09% | -11.50 | 1,046.50 |
| 5 |  |
Dcc Plc | -1.06% | -60.00 | 5,610.00 |
| 6 |  |
Segro Plc | -0.98% | -7.60 | 769.20 |
| 7 |  |
Prudential Plc | -0.95% | -5.80 | 602.20 |
| 8 |  |
Pearson Plc | -0.91% | -11.00 | 1,201.00 |
| 9 |  |
Smurfit Westrock Plc | -0.85% | -34.00 | 3,963.00 |
| 10 |  |
Bp 8%pf | -0.69% | -1.00 | 144.00 |
US close: Stocks retreat from record highs as post-election rally stalls
US stocks snapped a five-day winning streak on Tuesday, pulling back from record levels as the post-election rally ran out of steam with bond yields at a four-month high.
The Dow fell 0.9%, the S&P 500 declined 0.3% while the Nasdaq slipped 0.1%.
All three Wall Street benchmarks hit fresh record highs on Monday following five straight days of gains in the aftermath of last Tuesday’s presidential election – with sentiment also lifted by another rate cut by the Federal Reserve on Thursday.
As of Monday’s close, the S&P 500 had risen 5.1% over the past week, the Dow gained 6% and the Nasdaq jumped 6.2%.
However, a big surge in yields prompted investors to take profits on Tuesday, with the yield on a 10-year US Treasury up 13 basis points at 4.44%, trading at levels not seen since July.
“There’s a dark cloud approaching as bond yields continue to hold at elevated levels. The Federal Reserve may have got the short end covered, to some extent, but investors decide what goes on further out,” said David Morrison, senior market analyst at Trade Nation.
“The recent pick-up in yields can suggest many things, including a strengthening economy which has no need of aggressive rate cuts, or fears of a renewed bout of inflation, given Trump’s promised tax cuts and tariffs, along with the prospect of trillions being added to the national debt.”
On the macro front, the National Federation of Independent Business’ small business optimism index increased to 93.7 in October, up from 91.5 in September and beating forecasts of 91.9 with the highest reading in three months.
Tom Barkin, the president of the Richmond Federal Reserve, was making headlines after saying that the economy looks “pretty good” but the jobs market needs to be closely monitored. He said the labour market “might be fine or it might continue to weaken”.
Market movers
Home improvement retailer Home Depot was subdued despite beating forecasts with an increase in profits in the third quarter as lower margins were offset by higher sales. The company also raised its outlook for the full year ending January 2025, predicting a bigger-than-expected increase in annual sales.
Shares in Shopify surged by around a quarter after the ecommerce platform beat forecasts for the third quarter in a row and raised full-year revenue guidance. Third-quarter net income doubled to $344m, ahead of the $332m consensus forecast, on the back of strong growth in subscriptions.
Industrial conglomerate Honeywell was in demand after Elliott Management diclosed a $5bn stake and called for a break-up of the company, saying the company should pursue a separation of its Aerospace and Automation divisions.
In contrast, media and internet conglomerate IAC fell sharply after revealing it was looking into a spinoff of its listed online home improvement marketplace Angi, causing shares in the latter to plummet.
Wednesday newspaper round-up: Post Office, Spirit AeroSystems, Flutter
The Post Office is expected to announce the closure of dozens of branches and cut up to 1,000 head office jobs as it seeks to reduce costs to secure its financial future. There are about 11,500 Post Office branches across the UK, of which 115 are wholly centrally owned. The rest are operated by independent post office operators under contract and partners such as WH Smith and Tesco. – Guardian
Young people from working-class backgrounds are being “blocked” from entering the creative industries, which remain “elitist” and inaccessible, according to research. A report from the Sutton Trust found stark overrepresentation in the arts for those from the most affluent backgrounds, which it defines as those from “upper middle-class backgrounds”. – Guardian
Rachel Reeves’s inheritance tax raid will deliver a “fatal blow” to farming, the boss of one of Britain’s biggest food producers has warned. Ranjit Singh Boparan, the tycoon nicknamed the “Chicken King”, blasted the Chancellor’s Budget as a “disaster for business” and said it risked pushing up inflation further for households. – Telegraph
Spirit AeroSystems, one of the largest private-sector employers in Northern Ireland, is to receive about $450 million in advance payments from Boeing and Airbus after the supplier raised the alarm about its finances. The struggling company has agreed up to $350 million in advance payments from Boeing, the American aerospace company. Airbus, the European planemaker, will pay up to $107 million. – The Times
Strong demand for sports betting in the US at the start of the National Football League season helped Flutter Entertainment surpass analyst expectations to report 27 per cent quarterly sales growth. The world’s largest online betting company, which moved its primary listing from London to New York this year, recorded revenue of $3.25 billion for the three months to the end of September, up from $2.56 billion a year earlier and ahead of analyst expectations of $3.03 billion. Revenue in the US rose 51 per cent year-on-year to $1.25 billion. In the UK and Ireland, revenue grew 18 per cent to $846 million. – The Times
