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London open: Stocks edge up as heavily-weighted miners rally
London stocks edged up in early trade on Monday, with sentiment boosted by China reopening hopes and last week’s US non-farm payrolls report.
At 0835 GMT, the FTSE 100 was up 0.2% at 7,712.42.
Victoria Scholar, head of investment at Interactive Investor, said: “The FTSE 100 is extending gains this morning having hit a three-year high on Friday. Miners like Antofagasta, Glencore and Anglo American are outperforming, thanks to a rally in China overnight as Beijing continues to ease its covid-era restrictions.
“European currencies are also strengthening on the back of a weaker US dollar thanks to a pickup in sentiment towards the US economy. Friday’s December US jobs report outpaced analysts’ expectations while wage growth was below forecasts, sparking a rally on Wall Street, lifting the major averages by more than 2% each with US futures pointing to a higher open at lunchtime.”
Aside from miners, BT was also a big riser after an upgrade to ‘buy’ at Citi, while LSE was lifted by a resumption of coverage at ‘buy’ at Citi.
Elsewhere, AstraZeneca lost ground as it announced the acquisition of US-based clinical-stage biopharmaceutical company CinCor in a $1.8bn deal.
Ground engineering contractor Keller Group slumped as it issued a profit warning after uncovering financial fraud at its Australia business that resulted in two directors being sacked.
In what it called a “deliberate and sophisticated” reporting fraud at Austral, a civil, mining and marine contractor, profits from 2019 onwards had been overstated. The impact of the fraud on historical operating profits is currently estimated to be £6m related to the first half of 2022, and £8m to £10m relating to prior years.
Rathbones lost ground after a downgrade to ‘underperform’ at Jefferies.
Vodafone nudged down after saying it had entered into binding terms in relation to the sale of its Hungary unit to local IT company 4iG and state-owned Corvinus for €1.8bn.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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|||||||
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +2.61% | +9.70 | 381.90 |
| 2 |  |
Antofagasta Plc | +2.45% | +40.50 | 1,695.50 |
| 3 |  |
Itv Plc | +1.93% | +1.54 | 81.14 |
| 4 |  |
Glencore Plc | +1.88% | +9.90 | 535.80 |
| 5 |  |
Prudential Plc | +1.87% | +23.00 | 1,253.00 |
| 6 |  |
Legal & General Group Plc | +1.63% | +4.20 | 262.60 |
| 7 |  |
Rightmove Plc | +1.52% | +8.20 | 546.60 |
| 8 |  |
Anglo American Plc | +1.40% | +49.00 | 3,558.00 |
| 9 |  |
Bp Plc | +1.29% | +6.15 | 483.20 |
| 10 |  |
Shell Plc | +1.28% | +30.00 | 2,380.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | -1.95% | -18.80 | 946.20 |
| 2 |  |
Bae Systems Plc | -1.73% | -14.80 | 843.00 |
| 3 |  |
Standard Chartered Plc | -1.43% | -10.00 | 687.80 |
| 4 |  |
Gsk Plc | -1.13% | -16.20 | 1,416.00 |
| 5 |  |
Diageo Plc | -1.03% | -37.50 | 3,609.00 |
| 6 |  |
British American Tobacco Plc | -0.94% | -31.50 | 3,312.00 |
| 7 |  |
Vodafone Group Plc | -0.94% | -0.83 | 87.88 |
| 8 |  |
Astrazeneca Plc | -0.92% | -108.00 | 11,674.00 |
| 9 |  |
Severn Trent Plc | -0.86% | -24.00 | 2,768.00 |
| 10 |  |
United Utilities Group Plc | -0.86% | -9.00 | 1,039.00 |
US close: Stocks fall despite better-than-expected jobs data
US stocks were in the red by the close on Thursday, as investors continued to digest hawkish minutes from the Federal Reserve and sifted through a number of labour market reports.
The Dow Jones Industrial Average ended the session down 1.02% at 32,930.08, as the S&P 500 lost 1.16% to 3,808.10 and the Nasdaq Composite was off 1.47% at 10,305.24.
“US markets have slipped back after the latest ADP employment numbers and weekly jobless claims came in better than expected,” said CMC Markets chief market analyst Michael Hewson.
“The resilience of these numbers has lent support to the idea that we will probably see the Fed hike rates by another 50-basis points at the start of February pushing the funds rate up to 5%.
“Despite today’s resilience in the jobs data, we’ve seen further announcements of job losses in the tech sector, although they remain small when compared to their hiring seen since the start of the pandemic.”
In economic news, unemployment claims were stronger than expected in the US during the final week of 2022, reflecting lower layoffs and only slightly decreased hiring over holidays.
According to the US Department of Labor, initial jobless claims fell by a seasonally-adjusted 19,000 to 204,000 over the week ended 31 December.
Economists had been expecting a reading of 223,000.
Private sector employment in the US rose more than expected in December, however, according to the latest data from ADP.
Employment increased by 235,000 from November, versus expectations for a 150,000 jump, with the figures also showing that annual pay was up 7.3% on the year.
Small businesses with fewer than 50 employees added 195,000 jobs, while medium businesses with between 50 and 499 employees added 191,000 jobs.
Large businesses with more than 500 employees shed 151,000 jobs.
Still on data, US job cut announcements fell at the end of 2022 closing off a year that saw the second-lowest total tally since 1993, according to a closely-followed employment survey.
Challenger, Gray and Christmas said lay-off announcements dropped by 43% month-on-month in December to reach 43,651.
In the same month one year earlier they rose by 19,000.
On the corporate front, Amazon fell 2.37% after the e-commerce and cloud computing giant said it would axe 18,000 jobs in a bid to cut costs.
“The biggest reduction in Amazon’s workforce in its history is worth keeping in perspective for several reasons,” said Russ Mould, investment director at AJ Bell.
“While 18,000 job cuts sound like a lot, in the context of a workforce of more than 1.5 million it is a drop in the ocean.
“It’s also important to consider where the cuts are being made – they are mostly in areas like human resources as well as its Amazon Go and Amazon Fresh physical stores, and the latter represent something of an experiment for the company.”
Mould said Amazon often “tested the waters” in different markets, but probably felt that in the current climate, its focus should be on core e-commerce and Amazon Web Services cloud operations.
“Still, these job cuts represent a significant increase on previously outlined levels.
“It shows Amazon is taking the current economic challenges seriously.
“As is often the case, the news was pleasing to shareholders who will prize any efficiencies which can increase their slice of the returns generated by the business.”
Elsewhere, transatlantic pharmacy giant Walgreens Boots Alliance tumbled 6.13% after it reported a first quarter loss of $4.31, swinging from earnings of $4.13 per share year-on-year.
The Nasdaq-traded company said that reflected a $6.5bn pre-tax charge in connection with its previously-announced opioid litigation settlement, and other “opioid-related” matters.
It said adjusted earnings per share decreased 30.8% to $1.16, or by 29.9% on a constant currency basis, against “strong growth” of 53.1% in the year-ago quarter, reflecting higher Covid-19 vaccine volumes at the time.
That was, however, still better than the $1.14 adjusted earnings per share analysts had pencilled in.
First quarter sales decreased 1.55% year-on-year to $33.4bn, but was up 1.1% on a constant currency basis, and was well ahead of the $32.9bn markets were expecting.
Monday newspaper round-up: UK manufacturers, OneWeb, foreign investors
Almost two-thirds of manufacturers in Britain fear blackouts this winter amid the fallout from the energy crisis, according to an industry survey, as concerns grow about government plans to cut financial support for businesses. As the chancellor, Jeremy Hunt, prepares to announce a sharp reduction in industry support, the trade body Make UK said the impact from sky-high energy costs on manufacturers showed no sign of abating. – Guardian
British households are only halfway through a two-year cost of living crisis, with average incomes likely to fall by more than £2,000, a leading thinktank has warned. Typical disposable incomes for working-age family households are on track to fall by 3% in this financial year, and by 4% in the year to April 2024, according to the Resolution Foundation. – Guardian
The British satellite champion OneWeb has shut down one of its first test sites in Alaska amid a struggle to compete with Elon Musk’s company SpaceX. Taxpayer-backed OneWeb closed the facility following claims by Alaskan telecoms executives that its service was impractical and costly. Other services remain online in the state. – Telegraph
BP plans to build its first solar farm with battery storage on a site in Tiln Farm, Retford, as it prepares to make the technology the norm globally. Nick Boyle, the head of energy giant BP’s solar joint venture, says he believes battery storage technology will be widely included as part of solar farms, helping to tackle the problem of intermittent energy. – Telegraph
Three prime ministers, four chancellors and three business secretaries in a year have cost Britain its appeal to foreign investors, say manufacturing bosses. Members of Make UK, the manufacturing trade body, have in previous surveys blamed the impact of Brexit on trade costs and customs barriers. However, it is the government’s management of the economy since Britain left the European Union that is now angering industrial leaders. – The Times
