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London open: FTSE nudges up ahead of services data
London stocks nudged up in early trade on Thursday following a mostly firmer US session, as investors eyed the latest reading on the UK services sector.
At 0830 BST, the FTSE 100 was up 0.1% at 7,941.93.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has squeezed out some gains following a mixed trading day yesterday. There’s limited corporate news to move the dial, with Federal Reserve comments from yesterday a main driver of sentiment today.
“Jerome Powell once again said that there was no rush to cut interest rates, although he did signal a cut would be coming this year, but that this is wholly dependent on economic progress.”
On the macro front, the S&P Global/CIPS UK services PMI for March is due at 0930 BST. Investors will also be eyeing the latest US initial jobless claims at 1330 BST, ahead of Friday’s all-important non-farm payrolls release.
In equity markets, Future surged as it reported a return to organic revenue growth in the second quarter, largely attributed to robust performances in Go.Compare, B2B sectors, and resilient magazine sales.
Vodafone was in focus after the Competition and Markets Authority said it was launching an in-depth investigation into its planned £15bn merger with CK Hutchison’s Three after they failed to provide solutions to address competition concerns.
InterContinental Hotels Group, Mondi, Rentokil Initial, IMI, Direct Line, Domino’s Pizza, Games Workshop, Hammerson and OSB Group were all in the red as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | +3.44% | +18.00 | 542.00 |
| 2 |  |
Antofagasta Plc | +2.95% | +62.00 | 2,162.00 |
| 3 |  |
Anglo American Plc | +2.66% | +54.50 | 2,102.50 |
| 4 |  |
Standard Chartered Plc | +2.59% | +18.00 | 711.80 |
| 5 |  |
Bt Group Plc | +2.58% | +2.70 | 107.40 |
| 6 |  |
Barclays Plc | +2.35% | +4.44 | 192.98 |
| 7 |  |
Legal & General Group Plc | +1.95% | +4.90 | 255.80 |
| 8 |  |
Astrazeneca Plc | +1.89% | +200.00 | 10,762.00 |
| 9 |  |
Lloyds Banking Group Plc | +1.79% | +0.94 | 53.32 |
| 10 |  |
Tui Ag | +1.72% | +11.00 | 651.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Mondi Plc | -2.22% | -30.50 | 1,343.00 |
| 2 |  |
Croda International Plc | -1.66% | -79.00 | 4,667.00 |
| 3 |  |
Rolls-royce Holdings Plc | -1.56% | -6.60 | 417.40 |
| 4 |  |
Intercontinental Hotels Group Plc | -1.43% | -116.00 | 7,992.00 |
| 5 |  |
Ocado Group Plc | -1.41% | -6.20 | 433.10 |
| 6 |  |
Rentokil Initial Plc | -1.37% | -6.40 | 461.10 |
| 7 |  |
Sage Group Plc | -1.12% | -14.00 | 1,235.00 |
| 8 |  |
Scottish Mortgage Investment Trust Plc | -1.01% | -8.80 | 865.20 |
| 9 |  |
Compass Group Plc | -0.98% | -22.00 | 2,227.00 |
| 10 |  |
Hargreaves Lansdown Plc | -0.94% | -7.00 | 741.60 |
US close: Stocks mixed as investors weigh data, Powell comments
US stocks finished mixed on Wednesday and were rangebound for most of the session as investors continued to pour over economic data and assess its impact on monetary policy.
The Dow finished 0.1% lower, while the S&P 500 gained 0.1% and the Nasdaq rose 0.2%, with little separating the benchmark’s intraday highs and lows.
Comments from Federal Reserve chair Jerome Powell were dominating newsflow in afternoon trade, after he downplayed concerns that a recent pick-up in economic activity has changed the Fed’s inflation outlook.
“The recent data do not […] materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down to 2% on a sometimes bumpy path,” Powell said.
Data released during the session showed that expansion in the American services sector slowed to a three-month low. The ISM’s non-manufacturing PMI declined to 51.4 in March from 52.6 in February, surprising economists who pencilled in an increase to 52.7. The lesser-followed S&P Global US services PMI meanwhile was unchanged at 51.7.
“Taken together, the data is relatively weak despite still showing modest signs of growth,” said Ryan Brandham, head of global capital markets, North America at Validus Risk Management. “It will be interesting to see if this will offset the market impact from the surprisingly strong ISM Manufacturing number released on Monday, which has been contributing to a sharp rise in US yields this week. It’s likely today’s figures could at least slow the pace of the rise in US yields, with focus now turning to Friday’s US NFP data to guide the market’s direction.”
In other macro news, the ADP employment report showed that 184,000 private-sector jobs were added in March, following a revised 155,000 the month before and ahead of the 148,000 consensus forecast. Eyes will now turn to the all-important non-farm payrolls report on Friday.
“We expect the March employment report to show moderating job growth, adding to the Federal Reserve’s confidence that the labor market is rebalancing and that wage growth has slowed,” said Nancy Vanden Houten, lead US economist at Oxford Economics. “However, given recent inflation data, the jobs data will not be enough to keep the Fed on track for a May rate cut.”
Market movers
Entertainment giant Disney closed 3% lower after prevailing in its proxy fight against Trian Partners, run by activist investor Nelson Peltz who had campaigned for change at the top of the company, with shareholders voting to reelect its full board.
“With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” chief executive Bob Iger said in a statement.
Intel dropped more than 8% after reporting an operating loss of $7bn at its chip-making unit last year, compared with a $5.2bn loss in 2022, on revenues that were 31% lower at $18.9bn.
Music-streaming service Spotify surged 8% on reports it is raising prices for its premium subscription in a number of markets – the second time it has upped prices in a year.
Thursday newspaper round-up: Elon Musk, Dr Martens, HSBC
Delivery app riders pedalling through cities and tailbacks at drive-throughs were familiar signs of Britain’s hunger for takeaway food at the peak of the Covid pandemic. Now a study suggests it became an enduring habit. After a boom in orders on Deliveroo, Just Eat and other platforms by locked-down consumers, research by the Institute for Fiscal Studies (IFS) suggests the popularity of takeaways, meal deliveries and food-on-the-go bought from retailer such as sandwiches and crisps has remained above pre-pandemic levels after the removal of Covid restrictions. – Guardian
Holidaymakers will continue to face limits on the amount of liquid they can carry on flights out of the UK this summer after the government extended the deadline for airports to install new security scanners by a year. The Department for Transport had previously set a target for the introduction of 3D scanners in all UK airports by 1 June, but this has now been extended by 12 months because some major airports will not be ready in time. – Guardian
Elon Musk’s Tesla is exploring constructing a multibillion dollar electric vehicle factory in India as the country’s prime minister seeks to put the brakes on China’s dominance. Tesla is planning to send a team to India later this month to hunt for possible locations for the plant which could be worth as much as $3bn (£2.4bn), the Financial Times reported. – Telegraph
An activist investor in Dr Martens has urged the troubled boot brand to consider a sale or merger amid concerns about its “deeply discounted” valuation. Marathon Partners Equity Management, the New York-based investment company, said it had “serious concerns” about the retailer’s stagnant growth and the 80 per cent slide in share price since it listed in London three years ago. – The Times
A break up of HSBC through a spin-off of its Asian business “will not happen,” the bank’s chairman Mark Tucker has insisted, as bosses seek to move on from a campaign by activist investors to split the lender in two. The future of the London-listed bank became the subject of intense debate in the City two years ago after it emerged that Ping An, a Chinese insurer that is HSBC’s biggest shareholder, was agitating for the lender to hive off its Asian operations as a separately listed company based in Hong Kong. – The Times
