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London open: Stocks gain ahead of UK manufacturing data
London stocks rose in early trade on Monday, taking their cue from a positive session in Asia, as investors eyed the latest UK manufacturing reading.
At 0845 BST, the FTSE 100 was up 0.3% at 8,297.08.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Positive vibes are powering the FTSE 100 higher, as fresh hopes swirl that interest rate cuts are not as far off as feared.
“Strong trading in Asia has laid the groundwork for an upbeat session, as investors take took cues from gains on Wall Street on Friday. Signs of weaker consumer spending patterns have lifted expectations that upwards price pressures could ease off and that the Fed may be less inclined to keep interest rates higher for longer.
“With lower borrowing costs spied on the horizon, it may start to give a little lift to oil prices, which are languishing around three-month lows. Brent Crude is trading around $81 dollars a barrel despite an agreement by OPEC+ to extend output cuts into 2025.”
On the macro calendar, all eyes will be on the S&P Global CIPS manufacturing PMI for May, which is due out at 0930 BST.
On the corporate front, investors were mulling reports that online fashion giant Shein was edging closer to a London stock market flotation.
It was understood that Shein – which was founded in China and is headquartered in Singapore – is planning to file a confidential prospectus with regulators this month.
Elsewhere, JD Sports jumped to the top of the FTSE 100, having slumped on Friday after full-year results.
St James’s Place rallied after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan Cazenove, which cited an attractive valuation and reducing uncertainty.
“Whilst we believe that negative news is largely behind us, this has not been reflected in valuation, with St James’s Place trading at 7x FY25e,” it said. “We expect that sentiment will improve given the resilience in gross flows, and we see upside to consensus net flow estimates.”
Quilter was also in the black as JPM lifted the shares to ‘overweight’ from ‘neutral’, saying it was “looking beyond the redress”.
Hipgnosis traded up after it agreed the terms of an improved cash offer from US private equity firm Blackstone, at $1.31 a share, up from $1.30.
Streeter said: “Although there may be a little disappointment that another suitor had not charged in with a much higher offer following the bidding war, the deal still marks a turn up for the books for investors. It follows a volatile run which saw shares sink to a low after the value of the fund’s music portfolio was slashed by more than 25%.”
On the downside, GSK tumbled as the pharma giant said it would be appealing against a US court decision allowing jury trials in cases brought by cancer sufferers claiming its heartburn drug caused their condition.
A judge in the Delaware State Court ruled that scientific experts would be able to testify there is a link between the plaintiffs’ illnesses and their exposure to probable human carcinogens, through the Zantac drug. GSK and other companies who marketed Zantac, including Boehringer Ingelheim and Sanofi dispute the claims.
Baltic Classifieds lost ground after Antler, which is controlled by funds advised by Apax, sold 40m shares in a placing.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Crh Plc | +5.49% | +336.00 | 6,454.00 |
| 2 |  |
St. James’s Place Plc | +4.18% | +20.90 | 520.50 |
| 3 |  |
Marks And Spencer Group Plc | +2.62% | +7.90 | 309.90 |
| 4 |  |
Easyjet Plc | +2.61% | +12.00 | 472.00 |
| 5 |  |
Tui Ag | +2.60% | +14.00 | 552.00 |
| 6 |  |
Rolls-royce Holdings Plc | +2.38% | +10.80 | 464.20 |
| 7 |  |
Burberry Group Plc | +2.27% | +23.50 | 1,058.50 |
| 8 |  |
Coca-cola Hbc Ag | +2.11% | +56.00 | 2,704.00 |
| 9 |  |
Rightmove Plc | +2.03% | +10.80 | 544.00 |
| 10 |  |
International Consolidated Airlines Group S.a. | +2.01% | +3.45 | 174.85 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | -9.28% | -164.00 | 1,602.50 |
| 2 |  |
Severn Trent Plc | -1.38% | -33.00 | 2,353.00 |
| 3 |  |
Anglo American Plc | -1.23% | -31.00 | 2,482.50 |
| 4 |  |
United Utilities Group Plc | -0.84% | -8.50 | 1,007.50 |
| 5 |  |
Rio Tinto Plc | -0.57% | -31.00 | 5,445.00 |
| 6 |  |
Smith & Nephew Plc | -0.55% | -5.40 | 985.00 |
| 7 |  |
Glencore Plc | -0.30% | -1.45 | 479.30 |
| 8 |  |
Bhp Group Limited | -0.30% | -7.00 | 2,314.00 |
| 9 |  |
Croda International Plc | -0.29% | -13.00 | 4,527.00 |
| 10 |  |
Pearson Plc | -0.19% | -1.80 | 946.20 |
US close: Dow, S&P 500 jump after data hints at economic slowdown
US stocks rallied into the close on Friday with the Dow and S&P 500 rising strongly after economic data showed a moderation in consumer spending growth and the slowest monthly gain in prices so far this year – two factors that could increase the pressure on the Federal Reserve to start cutting interest rates.
After a tentative start as investors digested a flurry of datapoints, both the Dow and S&P 500 gained rapidly in afternoon trade, with the Dow jumping 1.5% and the S&P 500 advancing 0.8%. The Nasdaq, however, remained flat.
The Dow in particular was rebounding after a three-day skid during which it lost 2.5% of its value.
According to the US Department of Commerce, personal income rose at a monthly rate of 0.3% in April, down from 0.5% in March and in line with forecasts, but personal spending growth slowed to 0.2% from 0.7%, coming in below the 0.3% expected by the market.
Meanwhile, the monthly increase in the price deflator for personal consumption expenditures was unchanged from the previous month at 0.3%, as expected. However, at the core level, PCE price gains clocked in at just 0.2%, the slowest month-on-month gain so far this year and slightly below the 0.3% consensus forecast.
“The weaker tone of both the spending and PCE inflation data in April are the first of a series of softer reports needed for the Fed to begin cutting interest rates later this year,” said Michael Pearce, deputy chief US economist at Oxford Economics.
“With four more inflation reports to go between now and the September FOMC meeting, we still think there is a good chance the Fed will cut rates at that meeting.”
In other news, the Chicago business-activity index unexpectedly fell to its lowest level in four years, dropping from 37.9 to 35.4, significantly below the 40.8 predicted by economists.
Looking ahead to next week, investors’ attention will be squarely on the US May non-farm payrolls report due out on Friday. Those figures may help gauge to what extent April’s slowdown in hiring was more a correction attributable to various seasonal and weather-related quirks or something more enduring.
Thursday meanwhile will bring with it a reading on first quarter growth in US labour productivity and unit labour costs, both of which are key to the inflation picture and outlook for prices.
Market movers
Dell shares tanked 18% despite the tech group beating both revenue and profit forecasts with its first-quarter results after the bell on Thursday. This was the biggest single-day decline the stock has seen since 2018, with profit taking likely after the shares have more than doubled in price since the start of 2024.
Heading the other way was fashion brand Gap which soared 29% after smashing first-quarter profit forecasts, reporting earnings of 41 cents per share, compared with the 14 cents expected.
Another retailer impressing the market was department-store group Nordstrom, which gained 5% after delivering a 5.1% increase in first-quarter net sales, with its budget chain Nordstrom Rack seeing a 13.8% jump in sales.
Elsewhere in the fashion-retail space, conglomerate VF Corporation jumped 8% after appointing the chief product officer at Lululemon as Vans’s new brand president.
Monday newspaper round-up: HSBC, Shein, Nvidia
Union leaders are preparing to ramp up industrial action at two south Wales steelworks, in a further escalation of a row over almost 3,000 job losses that threatens to become a big general election issue. Unite said such moves at the Port Talbot and Llanwern works are planned after the sites’ Indian owner, Tata Steel, threatened to cut redundancy pay as a response to members voting for an overtime ban. – Guardian
Britain’s councils are preparing a record £1.4bn record fire sale in assets and cancelled investments as they scramble to plug a debt black hole ahead of the election. The Government has given 18 councils the green light to sell-off assets and mothball projects to release cash in a bid to avoid another wave of council bankruptcies before the nation heads to the polls on July 4. – Telegraph
HSBC faces steep losses from the unravelling of the Barclay family’s sprawling business empire, new documents show. The British banking giant is owed £143m by the Barclay family’s delivery business, which fell into administration in March. Restructuring experts at Teneo overseeing the administration have warned that, based on the current outlook, the bank “will not be repaid in full”. – Telegraph
The Labour Party has held talks with the boss of Shein to try to persuade the Chinese-founded fast-fashion company to opt for a blockbuster London float. Jonathan Reynolds, the shadow business secretary, Sarah Jones, the shadow minister for industry, and Chris Bryant, the shadow minister for creative industries, are understood recently to have met Donald Tang, the executive chairman of Shein, to discuss a potential initial public offering in London. – The Times
Nvidia has revealed its latest suite of artificial intelligence products, saying it is on an “accelerated road map” for new launches. Addressing the Computex conference in Taipei, Jensen Huang, Nvidia’s founder and chief executive, said the company would release a next-generation processor platform called Rubin. His comments came less than three months after the announcement of Blackwell in March. – The Times
