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London open: FTSE edges down ahead of Autumn Statement
London stocks edged lower in early trade on Thursday following losses in the US and Asia, as investors eyed Chancellor Jeremy Hunt’s Autumn Statement.
At 0840 GMT, the FTSE 100 was down 0.2% at 7,335.91.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The FTSE 100 has opened marginally lower, with investors largely treading water, waiting to find out exactly what will pop out of the Chancellor’s red box.
“The end of the era of cheap money has been particularly painful for the UK. As rates have been ramped up to fight the enemy of inflation, the costs of debt repayments for the UK have escalated, with £22 billion more paid in interest this year than last. For consumers the march upwards of prices has been painful, and budgets, particularly for those on lower incomes, have been squeezed to breaking point during this cost-of-living crisis, which has had a big knock-on effect on discretionary spending.
“That’s why help for the poorest households is expected to be the centrepiece for this budget, through a rise in benefits and pensions in line with double digit inflation, which will mount to a big bill for the Treasury. To try and re-coup that, stealth taxes on higher income earners are rumoured to be brought in through a freezing of tax thresholds.
“Help with energy bills is expected to be extended, at a lower rate, paid for by a grab on the windfall profits on electricity generating firms, in addition to North Sea oil and gas producers. It has been estimated that taxing generators could raise around £4 billion.
“The UK government’s Autumn Statement will mark a complete about turn from the Truss administration’s plans for a sugar rush boost to growth through tax cuts which sparked mayhem on bond markets and saw the UK’s risk premium shoot up.”
In equity markets, safety equipment firm Halma slumped despite reporting record half-year revenue and profit.
Spirax-Sarco Engineering was in the red even as it reiterated guidance for full-year operating profits and reported continued strong demand despite a weakening outlook for global industrial production.
Great Portland Estates fell as it said it swung to a pre-tax loss in the first half, while Investec was weaker as it said funds under management declined 7.6% in H1.
Hargreaves Lansdown and Rathbones were both knocked lower by rating downgrades at RBC Capital Markets.
On the upside, Burberry edged up after the luxury fashion brand posted a jump in first-half profits and set new medium-term guidance for sales. In the 26 weeks to 1 October, adjusted operating profit rose 6% at constant exchange rates to £238m, while revenues grew 5% to £1.35bn.
Mitie rallied after the outsourcer lifted its full-year operating profit guidance as it posted a rise in interim revenues but a drop in profit amid fewer Covid-related contracts.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Admiral Group Plc | +2.01% | +41.00 | 2,082.00 |
| 2 |  |
Informa Plc | +1.06% | +6.20 | 591.60 |
| 3 |  |
Sainsbury (j) Plc | +1.04% | +2.20 | 213.20 |
| 4 |  |
Smiths Group Plc | +1.02% | +16.00 | 1,591.00 |
| 5 |  |
Itv Plc | +0.64% | +0.48 | 74.92 |
| 6 |  |
Imperial Brands Plc | +0.58% | +12.00 | 2,065.00 |
| 7 |  |
Pearson Plc | +0.43% | +4.20 | 974.60 |
| 8 |  |
Whitbread Plc | +0.41% | +10.00 | 2,477.00 |
| 9 |  |
Direct Line Insurance Group Plc | +0.39% | +0.80 | 207.00 |
| 10 |  |
British Land Company Plc | +0.36% | +1.40 | 393.10 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -5.37% | -39.00 | 687.00 |
| 2 |  |
Halma Plc | -5.28% | -124.00 | 2,225.00 |
| 3 |  |
Spirax-sarco Engineering Plc | -4.96% | -575.00 | 11,025.00 |
| 4 |  |
Smurfit Kappa Group Plc | -3.07% | -95.00 | 2,997.00 |
| 5 |  |
Hargreaves Lansdown Plc | -2.98% | -26.00 | 845.20 |
| 6 |  |
Sse Plc | -2.10% | -34.50 | 1,609.50 |
| 7 |  |
Sage Group Plc | -2.00% | -16.20 | 795.00 |
| 8 |  |
Experian Plc | -1.85% | -54.00 | 2,870.00 |
| 9 |  |
Bunzl Plc | -1.69% | -51.00 | 2,960.00 |
| 10 |  |
Crh Plc | -1.60% | -53.00 | 3,255.50 |
US close: Stocks finish weaker after deluge of data
Wall Street stocks finished weaker on Wednesday, as market participants digested a number of key data points.
At the close, the Dow Jones Industrial Average was down 0.12% at 33,553.83, as the S&P 500 lost 0.83% to 3,958.79 and the Nasdaq Composite was off 1.54% at 11,183.66.
The Dow closed 39.09 points lower on Wednesday, biting into the gains it recorded on Tuesday as market participants digested another softer-than-expected inflation report.
“Stocks have pushed to the downside in lacklustre trading, as the positive momentum established by last week’s CPI figure disappears,” said IG chief market analyst Chris Beauchamp.
“This may well only be a temporary development, and the gains of the past week or so certainly suggest that the market is in a mood to push higher into the end of the year.
“While not exactly beating the drum on a pivot, Fed speakers have not been too zealous in talking about the need for higher rates, thus helping to avoid a resumption of the downtrend in equities for now.”
Wednesday’s primary focus was October’s retail sales data, which revealed sales grew more quickly than anticipated last month.
According to the Department of Commerce, in seasonally adjusted terms, retail sales volumes expanded at a month-on-month clip of 1.3% to reach $694.5bn.
Economists had pencilled in a rise of 0.9%.
Also on the macroeconomic front, mortgage applications rose 2.70% in the week ended 11 November, according to the Mortgage Bankers Association of America, the first increase in eight weeks.
The purchase index was up 4.4%, while applications to refinance a home loan fell by 1.6%.
On another note, the cost of imported goods in the States fell a bit less than expected last month, according to the Department of Labor, with the US import price index slipping at a month-on-month pace of 0.2% in October in seasonally adjusted terms.
Consensus estimates were for a 0.5% drop.
Elsewhere, US industrial production undershot forecasts by a wide margin amid declines in mining and utilities output.
According to the Department of Commerce, total production ticked lower by one-tenth of a percentage point month-on-month in October.
Headlines from across the pond were also in focus, after UK inflation again surged in October, coming in well above expectations.
According to the Office for National Statistics, consumer price inflation rose 11.1% in October year-on-year, up from 10.1% in September and the highest rate since 1981.
Most analysts had been expecting CPI to print at around 10.7%.
In equities, ‘cheap-chic’ discount retailer Target tumbled 13.14% after it posted a more-than-50% drop in third-quarter profits ahead of the all-important holiday trading period, leading the company to lower expectations for the final 12 weeks of the year.
Cruise operator Carnival was 13.71% lower in US trading after it said it was planning to issue further debt, while Advance Auto Parts plunged 15.06% after an earnings miss, as cash-strapped customers turned to its less profitable own brand products rather than the bigger-margin brand name products.
On the upside, DIY chain Lowe’s was ahead 3.01% after it beat expectations with its latest set of quarterly revenues.#
Thursday newspaper round-up: Nexperia, face-to-face banking, ULEZ
The British government has blocked the takeover of the UK’s largest producer of semiconductors by a Chinese-owned manufacturer, citing “a risk to national security”. The business department’s decision on Wednesday comes more than a year after semiconductor company Nexperia first announced that it had taken control of Newport Wafer Fab in south Wales in July 2021, in a £63m deal. – Guardian
Labour is planning to force a vote on guaranteeing in-person banking across the country, following swathes of branch closures that have left local communities without face-to-face services. The party’s amendment to the financial services and markets bill would give City regulators the power to ensure communities have regular access to “essential” in-person services, including opening new accounts, applying for loans, making and receiving payments and setting up standing orders. – Guardian
The average price of used cars fell for the first time in over two years, as supply chain problems started to ease for manufacturers. New inflation figures from the Office for National Statistics show that the price of second-hand cars fell by 2.7pc in the year to October. This is the first month that it has gone negative since the onset of the pandemic. However, it follows 23pc growth in the year to October 2021, meaning that prices are still much higher than before Covid. – Telegraph
Sadiq Khan is under fresh pressure to drop his controversial expansion of the ultra-low emission zone (Ulez) as new polling reveals the majority of Londoners oppose the mayor’s flagship policy. Around 60pc of Londoners said they oppose Ulez expansion across all of Greater London, according to a YouGov survey conducted on behalf of Conservative party members of the Greater London Assembly. – Telegraph
The head of the financial regulator has warned the City that the way in which financial firms treat consumers during the looming recession “will determine the industry’s reputation for decades ahead”. In a speech to industry bosses at the annual UK Finance dinner in London last night, Nikhil Rathi urged banks to ensure they passed on the Bank of England’s interest rate increases to savers. – The Times
The media regulator has sounded the alarm over the amount of power and influence that Silicon Valley’s biggest companies have over the news that people consume online. Two thirds of UK adults get their news from social media companies including Facebook and Twitter, search engines such as Google and apps including Apple News, up from 18 per cent in 2005. Facebook is the third most popular news source in Britain, after the BBC and ITV, while among younger teenagers Instagram, TikTok and YouTube come top. – The Times
