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London open: Informa paces the gains after guidance upgrade; fiscal statement eyed
London stocks rose in early trade on Monday as investors looked ahead to Chancellor Jeremy Hunt’s fiscal statement this week, with Informa surging ahead after a guidance upgrade.
At 0830 GMT, the FTSE 100 was up 0.4% at 7,346.11, while sterling was down 0.2% against the dollar at 1.1807.
All eyes were on the fiscal statement due on Thursday.
Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown, said: “The UK government is still on a report card, being closely monitored after the perceived economic bad behaviour of the short-lived Truss administration. That’s why Prime Minister Rishi Sunak and his Chancellor Jeremy Hunt have been priming the nation this weekend to expect widespread tax increases, and a cut back of spending in the Autumn Statement.
“Exploiting fiscal drag is set to be a big part of the plan, with the Treasury planning to recoup a big chunk of money by extending a freeze to tax brackets. Bringing more stealth taxes out of the red box, rather than wielding an even bigger axe to public spending would be more politically palatable.
“Increases to inheritance tax and Capital Gains tax will be particularly difficult for a Conservative government to put on the table but even so the expectation is that they will feature in the plan. It also looks increasingly likely that the Government will uprate benefits and pensions in line with inflation.”
Investors were also mulling the latest survey from Rightmove, which showed that house prices fell last month as sellers rushed to secure deals against a backdrop of mounting financial uncertainty.
According to the Rightmove house price index, house prices fell 1.1% in November, taking the average asking price to £366,999. That compares to a 0.9% rise the month before. Year-on-year, house prices grew by 7.2%, compared to annual growth of 7.8% in October.
In equity markets, Informa was the standout gainer on the FTSE 100 as the events organiser lifted its full-year guidance, pointing to an improvement in demand.
The company now expects full-year revenue of between £2.3bn and £2.35bn and adjusted operating profit of £490m to £505m. Previously, it had guided to revenues of £2.15bn to £2.25bn and adjusted operating profit of between £470m and £490m.
Victoria Scholar, head of investment at Interactive Investor, said: “The post-pandemic return to physical events has helped spur growth for Informa with B2B demand and academic markets enjoying impressive growth.
“It continues to target the US as a key growth area with the completion of its US data business acquisition Industry Dive. Informa also continued to return cash to shareholders with over £450m of its £725m share buyback programme now completed and the resumption of its ordinary dividend.
“Shares in Informa are outperforming the market this year, gaining almost 10% year-to-date and are enjoying particularly strong gains in today’s session.”
Miners were also on the rise, with Anglo American, Antofagasta and Glencore all up.
Cybersecurity firm Darktrace rallied after it highlighted strong demand for its new ‘Prevent’ product family.
IT provider Kainos gained as it posted a jump in first-half profit and revenue amid strong underlying demand.
On the downside, housebuilder Redrow was knocked lower by a downgrade to ‘neutral’ at Citi, which cited a less attractive risk/reward.
Outside the FTSE 350, Joules was in focus as the fashion and lifestyle retailer said it had decided to call in administrators after failing to raise new funding, putting around 1,700 jobs at risk.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Informa Plc | +5.03% | +27.80 | 580.40 |
| 2 |  |
Imperial Brands Plc | +2.68% | +53.50 | 2,047.00 |
| 3 |  |
British American Tobacco Plc | +2.24% | +71.50 | 3,258.50 |
| 4 |  |
Bhp Group Limited | +2.11% | +51.50 | 2,492.50 |
| 5 |  |
Astrazeneca Plc | +2.00% | +212.00 | 10,810.00 |
| 6 |  |
Glencore Plc | +1.91% | +9.60 | 511.60 |
| 7 |  |
Bae Systems Plc | +1.57% | +11.20 | 725.20 |
| 8 |  |
Bt Group Plc | +1.54% | +1.85 | 121.65 |
| 9 |  |
Pearson Plc | +1.54% | +14.40 | 952.20 |
| 10 |  |
Unilever Plc | +1.51% | +59.50 | 3,999.00 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Marks And Spencer Group Plc | -3.57% | -4.45 | 120.25 |
| 2 |  |
Tui Ag | -2.72% | -4.25 | 151.75 |
| 3 |  |
Johnson Matthey Plc | -2.38% | -52.00 | 2,135.00 |
| 4 |  |
3i Group Plc | -2.31% | -30.00 | 1,267.50 |
| 5 |  |
Taylor Wimpey Plc | -2.11% | -2.20 | 102.10 |
| 6 |  |
Persimmon Plc | -1.95% | -26.50 | 1,332.50 |
| 7 |  |
Melrose Industries Plc | -1.93% | -2.45 | 124.65 |
| 8 |  |
Barratt Developments Plc | -1.92% | -7.90 | 403.30 |
| 9 |  |
Segro Plc | -1.90% | -16.20 | 837.00 |
| 10 |  |
St. James’s Place Plc | -1.70% | -20.50 | 1,186.50 |
US close: Major indices extend CPI-fuelled rally
Wall Street stocks closed higher on Friday as investors continued to digest yesterday’s cooler-than-expected CPI reading and mulled over a series of international headlines.
At the close, the Dow Jones Industrial Average was up 0.10% at 33,747.86, while the S&P 500 advanced 0.92% to 3,992.93 and the Nasdaq Composite saw out the session 1.88% stronger at 11,323.33.
The Dow closed 32.49 points higher on Friday, modestly extending gains recorded in the previous session and helping major indices register a winning week.
Stocks delivered their biggest one-day rally since 2020 on Thursday following the revelation from the Bureau of Labor Statistics that consumer prices had risen softer than expected in October, giving traders some hope that inflation may be slowing down. Treasury yields dropped on the news, while tech stocks surged.
Underlining sentiment on Friday was news that Chinese stocks and the renminbi had pushed higher after the Politburo Standing Committee issued new guidance aimed at better implementing its Zero-Covid policy. China has shortened quarantine times for close contacts of coronavirus cases and for inbound travellers, and also scrapped a penalty on airlines that bring in infected passengers. Casino stocks rallied on the news.
Also in focus, America’s top general believes he sees scope for diplomatic talks between Kyiv and Moscow. Chairman of the Joint Chiefs of Staff, Mark Milley, reportedly said: “we don’t know what the future holds, but we think there are some possibilities here for some diplomatic solutions.” He also said that Russia’s withdrawal, possibly in preparation for a spring offensive, together with the G-20 summit scheduled for the following week, presented “a window of opportunity for negotiation”.
On the macro front, a preliminary reading of the University of Michigan‘s consumer sentiment index fell from 59.9 in October to 54.7 in November.
In the corporate space, Real Good Food said its net loss had widened by $1.3m to $13.1m in the third quarter as it reaffirmed full-year guidance for net sales to be at the lower end of its $155.0m-160.0m range.
Cryptocurrencies also struggled after FTX chief executive Sam Bankman-Fried retired and the group announced that it was filing for bankruptcy.
Monday newspaper round-up: Immigration rules, FTX, Twitter, Gieves & Hawkes
Britain’s foremost business lobby group has urged Jeremy Hunt to use this week’s autumn statement to shake up immigration rules to support companies struggling with chronic staff shortages and a looming recession. The head of the Confederation of British Industry (CBI) said urgent action was required from the chancellor on Thursday to bolster the economy, including “tough political choices” to allow more overseas workers in Britain as employers struggle with a desperate lack of staff. – Guardian
Bus services will not survive without sustained Treasury funding, campaigners and industry groups have warned the chancellor after the cutting of hundreds of routes in recent months. Transport charities and trade bodies have written to Jeremy Hunt asking for support before this week’s autumn statement urging him to guarantee short-term funding, give targeted help to local authorities, and bring in better long-term financial settlements. – Guardian
Embattled cryptocurrency exchange FTX has been rebuked by regulators in the Bahamas after it claimed local laws meant it had to allow customers in the Caribbean to make withdrawals even as others around the world were locked out. The Securities Commission of The Bahamas said it had “not directed, authorised or suggested” that Bahamian clients be given priority and allowed to withdraw their cash last week, as the company was teetering on the brink. – Telegraph
Mike Ashley’s Frasers Group is close to agreeing a deal to buy Gieves & Hawkes, an ailing Savile Row tailor. Frasers is in advanced talks to buy the brand after its Hong Kong-based owner collapsed into liquidation, according to Sky News. Mr Ashley’s group has been considering the acquisition of Gieves & Hawkes – which was put up for sale earlier this year – since September. – Telegraph
Twitter culled thousands of contractors at the weekend, according to reports, a week after halving its full-time workforce following Elon Musk’s $44 billion takeover. Some realised they no longer worked for the social media group when they struggled to log on to its computers. – The Times
