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London open: FTSE jumps past 8,000 as Centrica surges
London’s FTSE 100 jumped past 8,000 in early trade on Thursday, having breached that level for the first time a day earlier, with Centrica pacing the gains after bumper results.
At 0840 GMT, the FTSE 100 was up 0.3% at 8,021.46, as worries about a global recession receded following better-than-expected US retail sales data.
Looking ahead to the rest of the day, CMC Markets analyst Michael Hewson said the focus will shift to US PPI numbers for January “and a confirmation that supply chain and factory gate costs are also easing sharply”.
“This seems more likely given that freight costs have fallen back and are continuing to do so, and energy costs have also come down. Final demand PPI is expected to fall from 6.2% in December to 5.4%, while core PPI is expected to drop from 5.5% to 4.9%,” he said.
In equity markets, British Gas owner Centrica surged as it said annual profits more than tripled to a record £3.3bn, driven by soaring wholesale gas prices in the wake of Russia’s invasion of Ukraine, as Britons struggle with household energy bills.
Standard Chartered rallied after it announced a new $1bn share buyback as annual profits rose by almost a third on higher global interest rates, but still missed estimates.
Upper Crust owner SSP was a little weaker even after it backed its full-year guidance and hailed a strong start to the year, with revenues ahead of pre-pandemic levels, amid a further recovery in the travel industry.
Indivior tumbled after saying it swung to a loss in 2022 as it booked a $290m exceptional provision related to certain multidistrict antitrust class and state claims, and $6m to settle a dispute over reimbursement of legal costs with a supplier.
Moneysupermarket was also sharply lower despite posting a rise in full-year pre-tax profits.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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|||||||
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Centrica Plc | +4.05% | +3.99 | 102.55 |
| 2 |  |
Relx Plc | +3.15% | +77.00 | 2,525.00 |
| 3 |  |
Vodafone Group Plc | +3.14% | +3.12 | 102.34 |
| 4 |  |
Standard Chartered Plc | +2.03% | +14.80 | 744.00 |
| 5 |  |
Flutter Entertainment Plc | +1.87% | +245.00 | 13,345.00 |
| 6 |  |
Croda International Plc | +1.53% | +106.00 | 7,018.00 |
| 7 |  |
Burberry Group Plc | +1.49% | +37.00 | 2,512.00 |
| 8 |  |
Bt Group Plc | +1.45% | +2.00 | 140.30 |
| 9 |  |
Rio Tinto Plc | +1.36% | +82.00 | 6,119.00 |
| 10 |  |
Rolls-royce Holdings Plc | +1.36% | +1.52 | 113.52 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Imperial Brands Plc | -2.80% | -57.50 | 1,995.50 |
| 2 |  |
Berkeley Group Holdings (the) Plc | -1.95% | -83.00 | 4,170.00 |
| 3 |  |
Bp Plc | -0.88% | -4.90 | 554.80 |
| 4 |  |
Astrazeneca Plc | -0.73% | -84.00 | 11,484.00 |
| 5 |  |
Shell Plc | -0.66% | -17.00 | 2,562.00 |
| 6 |  |
Barclays Plc | -0.63% | -1.08 | 171.52 |
| 7 |  |
Hikma Pharmaceuticals Plc | -0.57% | -10.00 | 1,754.00 |
| 8 |  |
British American Tobacco Plc | -0.41% | -13.00 | 3,136.50 |
| 9 |  |
Barratt Developments Plc | -0.38% | -1.80 | 466.30 |
| 10 |  |
Persimmon Plc | -0.31% | -4.50 | 1,445.50 |
US close: Stocks higher following stronger-than-expected retail sales data
Wall Street stocks closed higher on Wednesday as market participants digested stronger-than-expected retail sales numbers.
At the close, the Dow Jones Industrial Average was up 0.11% at 34,128.05, while the S&P 500 advanced 0.28% to 4,147.60 and the Nasdaq Composite saw out the session 0.92% firmer at 12,070.59.
The Dow closed 38.78 points higher on Wednesday, taking a small bite out of losses recorded in the previous session following the hotter-than-expected print in January’s consumer price index, the Federal Reserve’s preferred inflation gauge.
Wednesday’s primary focus was on last month’s retail sales data, which revealed US retail sales had unexpectedly increased in January, bouncing back from the prior month’s 1.1% drop. According to the Census Bureau, retail sales rose 3% month-on-month in January – the strongest improvement since March 2021 and well and truly ahead of expectations for 1.8% increase. Excluding autos, sales rose 2.3% month-on-month.
Elsewhere on the macro front, US mortgage applications fell 7.7% in the week ended 10 February, according to the Mortgage Bankers Association, erasing a 7.4% increase recorded in the previous week. Applications to purchase a home slipped 5.5% and applications to refinance a property sunk 12.5% week-on-week.
On another note, the New York Empire State manufacturing index climbed 27.1 points in February from a month earlier to -5.8, according to the Federal Reserve Bank of New York, easily beating market expectations for a print of -18.0.
Moving on, industrial production increased 0.8% in January, according to the Federal Reserve, the smallest increase since the Covid-19 pandemic recovery began in March 2021.
Still on data, manufacturers’ and trade inventories in the US increased 0.3% month-on-month in December, according to the Census Bureau, following a downwardly revised 0.3% rise in November and matching market expectations.
Finally, the National Association of Home Builders‘ housing market index increased for a second month in a row to 42, the highest reading since September and ahead of market forecasts for a reading of 37. It was also the largest monthly increase in almost a decade, excluding the rebound after 2020 Covid-19 lockdowns.
In the corporate space, Biogen beat earnings expectations with its latest quarterly results as its Alzheimer’s and depression drugs leading the way, while Kraft Heinz earnings were lifted by higher prices but the group issued a disappointing outlook.
Thursday newspaper round-up: Wilko, Revolut, Russian economy
Wilko plans to cut more than 400 jobs, including assistant store managers, retail supervisors, head office managers and call centre workers, in the troubled retailer’s latest effort to control costs. The value household and garden products retailer has told staff it plans to reduce hours for team supervisors in 150 of its 401 stores, leading to the equivalent of about 150 full-time equivalent job losses, after a fall in sales. – Guardian
Revolut is facing a crackdown on cryptocurrency investing as ministers prepare to take action over on an unregulated trading strategy offered by the banking app. Treasury documents suggest that “staking”, in which investors deposit their holdings of crypto in the hope of earning double-digit returns, could face new controls from the City watchdog. – Telegraph
A chatbot named Harvey is helping hundreds of lawyers at Allen & Overy to draft contracts and write memos to clients, the firm has announced as the legal sector explores new ways to boost productivity using artificial intelligence. The City legal practice said that Harvey is available to about 3,500 employees. The chatbot has answered about 40,000 legal queries since November. – The Times
Russia’s economy is expected to return to growth next year, according to new forecasts, despite international sanctions over the invasion of Ukraine. The latest projections from the European Bank for Reconstruction and Development (EBRD) predict that Russia’s economy will grow by 1 per cent in 2024 after a 3 per cent decline in GDP this year. – The Times
