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London open: Stocks dip as investors mull general election, Nvidia results
London stocks dipped in early trade on Thursday as investors got their first chance to react to news of a general election on 4 July and blowout earnings from US chip giant Nvidia.
At 0900 BST, the FTSE 100 was down 0.1% at 8,361.96.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Following a couple of days of moving in reverse, the FTSE 100 just about held its ground at the open, shedding fewer than ten points.
“Some positivity will be coming from confirmation that a general election is on the way in a matter of weeks. While political upheaval does have the potential to upset markets, the uncertainty around next steps in recent days will have been holding sentiment back.
“The UK market is also reacting to a slightly more hawkish tone from the Federal Reserve, after the latest minutes showed recent data hadn’t increased their confidence in progress towards inflation targets.
“Better news was to be found from Nvidia, whose shares popped 6% after beating expectations. The group’s expected to ring the bell on a new all-time high, exceeding $1000 per share, when the US market opens. The chip specialist reported a 262% increase in revenue, as AI chip demand reached record levels.”
In equity markets, Hargreaves Lansdown surged after confirming it had rejected a 985p per share takeover offer from a consortium comprising CVC, Nordic Capital and Platinum Ivy, which is a wholly-owned subsidiary of Abu Dhabi Investment Authority.
It said: “The board confirms that it unanimously rejected the proposal on the basis it substantially undervalues Hargreaves Lansdown and its future prospects.”
AJ Bell went along for the ride, with an additional boost from encouraging results which saw the investment platform hike its dividend as it hailed a “very strong” interim performance, posting a jump in profits and revenue as platform customers reached a milestone.
FTSE 100 peer St James’s Place also rallied.
Scottish Mortgage Investment Trust gained as it reported a positive return over the past year following two years of negative returns in both NAV and share price terms. The shares were also likely boosted by well-received results overnight from shareholding Nvidia.
Budget airline Wizz Air flew higher after saying it swung to a profit of €365.9m in the year to the end of March from a loss of €531.1m the year earlier amid “sustained” demand.
On the downside, National Grid slumped after results and as it announced a £7bn equity raise through a rights issue. Severn Trent and United Utilities also lost ground.
Pets at Home took a hit after the Competition and Markets Authority announced a full investigation into the UK vet market.
Johnson Matthey declined as it posted a fall in full-year underlying profit as it was hit by lower metals prices.
Whitbread and DDC fell as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hargreaves Lansdown Plc | +12.05% | +118.00 | 1,097.00 |
| 2 |  |
St. James’s Place Plc | +4.68% | +21.80 | 487.60 |
| 3 |  |
Scottish Mortgage Investment Trust Plc | +1.95% | +17.00 | 887.00 |
| 4 |  |
Bae Systems Plc | +1.75% | +24.00 | 1,397.50 |
| 5 |  |
Schroders Plc | +1.62% | +6.20 | 388.80 |
| 6 |  |
Hikma Pharmaceuticals Plc | +1.55% | +30.00 | 1,969.00 |
| 7 |  |
Persimmon Plc | +1.43% | +20.50 | 1,455.00 |
| 8 |  |
Tui Ag | +1.20% | +6.50 | 547.50 |
| 9 |  |
Unilever Plc | +1.19% | +51.00 | 4,326.00 |
| 10 |  |
3i Group Plc | +1.07% | +31.00 | 2,929.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
National Grid Plc | -8.96% | -101.00 | 1,026.50 |
| 2 |  |
Severn Trent Plc | -5.38% | -142.00 | 2,497.00 |
| 3 |  |
United Utilities Group Plc | -5.15% | -55.50 | 1,021.50 |
| 4 |  |
Carnival Plc | -2.31% | -26.00 | 1,100.00 |
| 5 |  |
Smith & Nephew Plc | -2.15% | -21.80 | 993.20 |
| 6 |  |
Centrica Plc | -2.10% | -3.10 | 144.20 |
| 7 |  |
Bt Group Plc | -1.97% | -2.55 | 126.60 |
| 8 |  |
Dcc Plc | -1.92% | -110.00 | 5,630.00 |
| 9 |  |
Sse Plc | -1.68% | -30.50 | 1,786.00 |
| 10 |  |
Rentokil Initial Plc | -1.50% | -6.20 | 407.00 |
US close: Stocks lower following FOMC minutes
Wall Street stocks closed lower on Wednesday as investors digested minutes from the FOMC’s latest policy meeting and earnings from chipmaker Nvidia.
At the close, the Dow Jones Industrial Average was down 0.51% at 39,671.04, while the S&P 500 had lost 0.27% to 5,307.01 and the Nasdaq Composite saw out the session 0.18% weaker at 16,801.54.
The Dow closed 201.95 points lower on Wednesday after recording some solid gains in the previous session.
Wednesday’s primary focus was quarterly earnings from Nvidia after the close of trading, with the tech giant reporting a 262% jump in sales to $26.61bn and earnings per share of $5.95 each, pointing to a continuing AI boom. It also announced a ten-to-one stock split.
Elsewhere in the corporate space, retailer Target missed expectations with its latest set of earnings, while Urban Outfitters beat on both the top and bottom line with its quarterly numbers and homebuilder Toll Brothers surpassed analysts’ estimates with its fiscal performance and raised full-year delivery guidance.
On the macro front, mortgage applications jumped 1.9% week-on-week in the seven days ended 17 May, adding to the 0.5% increase in the prior week and marking the third weekly growth in mortgage demand, according to the Mortgage Bankers Association of America. The increase comes alongside a drop in average mortgage rates that saw financing costs hit a seven-week low. Applications to refinance a mortgage, jumped by 7%, offsetting a 1% drop in mortgage applications to purchase a home.
On another note, existing home sales declined 1.9% month-on-month in April to a seasonally adjusted annualised rate of 4.14m, the lowest reading in three months and short of expectations for a print of 4.21m. “Home sales changed little overall, but the upper-end market is experiencing a sizable gain due to more supply coming onto the market,” said National Association of Realtors‘ chief economist Lawrence Yun.
Finally, minutes from the Federal Open Market Committee‘s latest two-day policy meeting indicated that the central bank had grown more concerned about inflation, with members stating they weren’t confident in moving forward with interest rate reductions just yet.
“Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2% objective,” the minutes said. “The recent monthly data had showed significant increases in components of both goods and services price inflation.”
Thursday newspaper round-up: Mike Lynch, smart meters, Very Group
San Francisco federal courthouse on Thursday as a key witness in his own criminal fraud trial, which began in March. US authorities have charged the former software tycoon with 16 counts of wire fraud, securities fraud and conspiracy relating to his company’s acquisition deal with Hewlett-Packard in 2011. If convicted, Lynch faces up to 25 years in prison. He has pleaded not guilty. – Guardian
The number of gas and electricity smart meters that are not working properly is likely to be higher than government figures suggest – possibly 20% to 30% of the total – according to research from Citizens Advice. The charity said millions of households were missing out on the promised benefits from smart meters due to “problems with technology” and poor supplier customer service. – Guardian
The Barclay family have been forced to put their online retailer Very Group up for sale in a bid to tackle its mounting debts, including hundreds of millions owed to Abu Dhabi’s ruling family. Brothers Aidan and Howard, who oversee the Barclays’ dwindling business empire, have had to agree to either sell the entire company or a stake in the business as part of a complex rescue refinancing deal hammered out with its biggest creditors earlier this month. – Telegraph
Plans for a highly anticipated “Tell Sid” sale of NatWest shares owned by the government to the public are expected to be put on hold after Rishi Sunak called a general election. Advisers working on the deal had been poised to begin the sale process as soon as next month, but the prime minister’s decision to hold a snap election on July 4 means that a retail offer in June is now highly unlikely to go ahead, according to sources. – The Times
The Crown Estate is to spend £1.5 billion over the next decade building more laboratories nationwide and will start by redeveloping the old Debenhams store in Oxford city centre. The King’s property company, which looks after the royal family’s £16 billion historic land portfolio, will invest £125 million to buy the former department store and will turn it into laboratory space. – The Times
