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London open: FTSE nudges lower as gambling stocks tank
London stocks nudged down in early trade on Monday as investors eyed the release of key UK data points this week, with gambling shares under the cosh amid reports of a potential £3bn tax raid on the sector.
At 0830 BST, the FTSE 100 was down 0.1% at 8,243.46.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Stocks are largely set to tread water at the start of the week as investors look for a sense of direction as US earnings season builds, and the latest stimulus plan from China comes under scrutiny.
“The FTSE 100 has opened lower, following a volatile session for Chinese stocks after another underwhelming announcement from authorities about further steps to boost the economy. Although investors have largely welcomed the reiteration that more support would be on the way for consumers and the property sector, the lack of detail about how this would be achieved and the numbers involved, held back gains. Oil prices also eased off, with Brent Crude falling back to $78 a barrel, as hopes for a faster rebound of demand in China dissipate.
“Wall Street is set to waver near the top of its two-year bull market run, as investors await more results from corporate America, with more big banks set to report. The season has set off on the right foot, with JP Morgan and Wells Fargo reporting better-than-expected earnings. Consumer resilience is shining through and that’s set the bar high for Bank of America, Goldman Sachs and Morgan Stanley which are reporting this week. The US retail sales snapshot will also be in focus, and investors will be keen to see how solid spending in the third quarter, reported by the banks, will have propped up custom on main street.
“Investors will be keeping a close eye on UK labour market data out tomorrow and the latest CPI inflation snapshot due on Wednesday for clues about how determined policymakers may be to cut interest rates next month. With inflation staying steady in August there are hopes that prices will have remained calm in September.”
In equity markets, Entain, Flutter, Evoke and Rank Group all tanked following reports the government is planning a tax raid of up to £3bn on the gambling sector in this month’s Budget.
Recruiter PageGroup nudged lower as it reported a 13.5% drop in third-quarter gross profit to £201.4m, with challenging market conditions and declining confidence affecting client and candidate decision-making across all regions.
On the upside, TI Fluid Systems surged as it said it would be minded to recommend an improved takeover proposal from ABC Technologies at 200p a share, should a firm offer be made. TI Fluid has already rejected offers of 165p a share, 188p a share and 195p a share.
The latest proposal, made on 10 October, represents a premium of about 53.4% to the closing share price on 21 August, which was the last business day prior to ABC Technologies submitting its first proposal to the group.
Ashmore was also a high riser as it said assets under management rose by $2.5bn in the first quarter, with emerging markets delivering strong returns.
Luxury handbag maker Mulberry surged as it said it was considering its position after major shareholder Challice said it had no intention of selling its 56% stake to Mike Ashley’s Frasers Group despite an increased bid for the company.
The statement came after Frasers, which already holds 37% of Mulberry, upped its offer for the rest of the firm to 150p a share from 130p late on Friday.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bunzl Plc | +1.67% | +58.00 | 3,524.00 |
| 2 |  |
Severn Trent Plc | +1.46% | +37.00 | 2,573.00 |
| 3 |  |
United Utilities Group Plc | +1.21% | +12.50 | 1,043.00 |
| 4 |  |
Banco Santander S.a. | +1.06% | +4.00 | 383.00 |
| 5 |  |
Anglo American Plc | +1.02% | +23.50 | 2,318.50 |
| 6 |  |
Gsk Plc | +1.01% | +15.00 | 1,495.00 |
| 7 |  |
Sse Plc | +0.96% | +17.50 | 1,847.50 |
| 8 |  |
Bae Systems Plc | +0.91% | +11.50 | 1,281.50 |
| 9 |  |
South32 Limited | +0.90% | +1.70 | 190.90 |
| 10 |  |
Sainsbury (j) Plc | +0.81% | +2.20 | 273.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | -7.36% | -1,365.00 | 17,175.00 |
| 2 |  |
Carnival Plc | -2.42% | -35.00 | 1,411.00 |
| 3 |  |
Jd Sports Fashion Plc | -2.21% | -2.90 | 128.20 |
| 4 |  |
Croda International Plc | -1.83% | -74.00 | 3,973.00 |
| 5 |  |
Woodside Energy Group Ltd | -1.65% | -22.00 | 1,314.00 |
| 6 |  |
Scottish Mortgage Investment Trust Plc | -1.25% | -10.80 | 852.60 |
| 7 |  |
Kingfisher Plc | -1.19% | -3.70 | 308.50 |
| 8 |  |
Barclays Plc | -1.14% | -2.70 | 233.15 |
| 9 |  |
Wise Plc | -1.13% | -7.50 | 655.50 |
| 10 |  |
Rolls-royce Holdings Plc | -1.08% | -5.80 | 531.40 |
US close: Stocks higher following PPI, bank earnings
Wall Street stocks were in the green at the close of trading on Friday as market participants digested quarterly earnings reports from some of the biggest names in US banking and better-than-expected inflation data.
At the close, the Dow Jones Industrial Average was up 0.97% at 42,863.86p, while the S&P 500 advanced 0.61% to 5,815.03 and the Nasdaq Composite saw out the session 0.33% firmer at18,342.94.
The Dow closed 409.74 points higher on Friday, easily reversing losses recorded in the previous session as last month’s consumer price index led to fears that inflation hasn’t quite cooled off as initially hoped.
However, Friday’s producer price index from the Bureau of Labor Statistics eased some of those fears as it revealed PPI was flat month-on-month and up 1.8% on an annualised basis. Excluding volatile food and energy costs, the so-called core reading was 0.2% higher month-on-month. Economists expected to see headline PPI growth slow from 0.2% to 0.1% on a monthly basis.
Elsewhere on the macro front, a preliminary reading of the University of Michigan‘s consumer sentiment index declined to 68.9 in October, down from a five-month high of 70.1 in September and missing forecasts of 70.8.
In the corporate space, JPMorgan Chase said quarterly profits had slipped on the back of increased costs but still came in ahead of estimates, while Wells Fargo said its investment banking unit had helped offset the impact of reduced interest rates in Q3.
Monday newspaper round-up: Harland & Wolff, Post Office, top rate taxpayers
Spanish shipbuilding firm Navantia is in exclusive negotiations to buy Harland & Wolff, the owner of the Belfast shipyard that built the Titanic, in a deal that could rescue up to 1,000 jobs. It is understood the group could take control of the group’s four yards – in Belfast; Appledore, Devon; Arnish on the Isle of Lewis; and Methil, Fife – as early as next month. – Guardian
The Post Office has recently explored resuming the practice of taking branch owner-operators to court, as mounting losses from shortfalls in its network of 11,500 outlets hit £12m a year. During the Horizon IT scandal more than 900 operators were wrongly prosecuted over discrepancies caused by the faulty accounting software, many of them brought privately by the Post Office, a practice it stopped in 2015 and has promised not to restart. – Guardian
Top rate taxpayers now pay more than two fifths of all income tax, according to official data that lays bare how reliant Britain is on just 1m workers. Taxpayers subject to the 45p rate are expected to contribute £124bn to the Treasury’s coffers this year, according to HM Revenue and Customs (HMRC) data. This is more than is raised from corporation tax, as well as the amount that the Treasury receives annually from fuel duties, council tax and business rates combined. – Telegraph
Red tape brought in by regulators after the financial crisis to protect consumers has gone too far and is poorly targeted, a bank boss has warned. The chief executive of Saxo UK said the growing regulatory burden on banks since the crash has come with “significant costs” that harm competition. Andrew Bresler, who heads up the UK subsidiary of Danish-headquartered Saxo Bank, said: “If I think about how many people pre-financial crisis versus post-financial crisis I would need, there are probably 30pc to 40pc more people to meet the regulatory requirements. That’s a lot more people than beforehand. – Telegraph
The UK’s largest private pension fund has pushed back on government proposals to require more investment in domestic assets, amid concerns that the policy could disadvantage pensioners. The Universities Superannuation Scheme (USS) has warned the Treasury that forcing schemes to increase allocations forUK assets would be “wholly inconsistent” with trustees’ duties to provide the best outcomes for pension savers. – The Times
