Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
London open: FTSE rises after Bostic comments, China data
London stocks rose in early trade Friday following solid US and Asian sessions, as comments from a US Federal Reserve official and encouraging Chinese data underpinned the mood.
At 0820 GMT, the FTSE 100 was up 0.2% at 7,961.22, with sentiment boosted after Atlanta Federal Reserve President Raphael Bostic said he was in favour of “slow and steady” quarter-point US rate increases to limit risk to the economy.
The latest data out of China also helped, as it showed that activity in the services sector picked up more than expected in February amid a recovery in demand.
The Caixin services purchasing managers’ index rose to 55.0 from 52.9 in January. This was above consensus expectations for a reading of 54.5 and comfortably above the 50.0 mark that separates contraction from expansion.
Wang Zhe, senior economist at Caixin Insight Group, said: “There was still a lot of optimism in the services sector in February as business owners continued to express great confidence in an economic recovery upon the easing of Covid controls.”
Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said the data confirms the picture of a “vigorous, early-stage recovery in China”.
On home shores, S&P Global’s composite and services PMIs for February are due at 0930 GMT.
In equity markets, educational publisher Pearson fell despite reporting a better-than-expected rise in annual profits driven by revenue growth and cost savings. The company also said it would grow sales by low to mid-single digits this year.
Pearson reported an 11% rise in adjusted operating profit to £456m, compared with a company compiled consensus forecast of £446 million.
Revenue rose 5% on an underlying basis to £3.8bn, with increases across most of its divisions with the exception of higher education, which fell 4% driven by a decline in enrolments and a loss of adoptions to non-mainstream publishers, including open educational resources, partially offset by improved pricing.
Property portal Rightmove also lost ground after it posted a rise in full-year operating profit, pointing to “resilient traffic despite a significantly less frenetic property market than 2021”.
In the year to the end of December 2022, operating profit was up 7% at £241.3m, with revenues 9% higher at £332.6m.
Rightmove said a total of 16.3bn minutes were spent on the platform during the year, down from 18.3bn in 2021 but still 34% higher than the pre-pandemic record of 2019.
IMI was little changed after the engineering group reported a jump in full-year profits and revenue and hiked its dividend as it said all three divisions had achieved organic revenue growth.
In broker note action, Admiral was knocked lower by a downgrade to ‘neutral’ at Citi, while Hunting slumped after a downgrade to ‘hold’ from ‘buy’ at Berenberg.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +3.24% | +15.70 | 500.40 |
| 2 |  |
Carnival Plc | +2.78% | +21.60 | 798.40 |
| 3 |  |
Ocado Group Plc | +2.70% | +14.20 | 540.80 |
| 4 |  |
Rio Tinto Plc | +2.53% | +152.00 | 6,170.00 |
| 5 |  |
Glencore Plc | +2.43% | +12.40 | 523.40 |
| 6 |  |
Bhp Group Limited | +2.18% | +58.50 | 2,744.50 |
| 7 |  |
Antofagasta Plc | +1.91% | +31.00 | 1,652.00 |
| 8 |  |
Ashtead Group Plc | +1.79% | +100.00 | 5,688.00 |
| 9 |  |
Anglo American Plc | +1.69% | +50.50 | 3,039.50 |
| 10 |  |
Bt Group Plc | +1.59% | +2.25 | 143.75 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Admiral Group Plc | -2.79% | -60.00 | 2,091.00 |
| 2 |  |
Rightmove Plc | -1.99% | -11.20 | 552.60 |
| 3 |  |
Pearson Plc | -1.91% | -17.60 | 905.00 |
| 4 |  |
Direct Line Insurance Group Plc | -0.88% | -1.55 | 174.50 |
| 5 |  |
Bp Plc | -0.64% | -3.60 | 557.60 |
| 6 |  |
Bae Systems Plc | -0.61% | -5.60 | 914.00 |
| 7 |  |
Burberry Group Plc | -0.55% | -14.00 | 2,512.00 |
| 8 |  |
Compass Group Plc | -0.54% | -10.50 | 1,922.50 |
| 9 |  |
Shell Plc | -0.48% | -12.50 | 2,592.00 |
| 10 |  |
Flutter Entertainment Plc | -0.34% | -45.00 | 13,285.00 |
US close: Stocks higher following comments from Fed’s Bostic
Wall Street stocks closed higher on Thursday following comments from the Atlanta Federal Reserve’s Raphael Bostic, even as Treasury yields remained elevated.
At the close, Dow Jones Industrial Average was up 1.05% at 33,003.57, while the S&P 500 advanced 0.76% to 3,981.35 and the Nasdaq Composite saw out the session 0.73% firmer at 11,462.98.
The Dow closed 341.73 points higher on Thursday, extending yesterday’s very modest gains.
Market participants were zeroed in on rates at the open, with the benchmark 10-year note trading at 4.062% and the 2-year note reaching 4.904%. Both the rise in bond yields and fears of a potentially larger-than-expected interest rate hike from the Federal Reserve had weighed on the early 2023 rally over the last few days.
Sentiment got a boost after Atlanta Fed president Raphael Bostic stated he believes policymaker’s can keep interest rate hikes to 25 basis points rather than the half-point increase preferred by other officials.
However, Federal Reserve Bank of St Louis president Christopher Waller struck a cautious tone in comments to the Mid-Size Bank Coalition of America, stating that the central bank may very well look to institute a higher terminal rate if inflation numbers don’t cool off.
On the macro front, unemployment claims in the US were little changed during the week ended 25 February, according to the Department of Labor, which revealed that ,in seasonally adjusted terms, initial jobless claims drifted lower by 2,000 to reach 190,000. Economists had pencilled-in a small rise to 195,000.
In the corporate space, retailer Macy’s smashed expectations with its holiday-quarter earnings but warned of a choppier year ahead, Hewlett Packard posted a solid earnings beat and lifted guidance, while Dell topped estimates but guidance fell short of expectations, and Victoria’s Secret beat earnings estimates by $0.11 on revenues that topped expectations.
Friday newspaper round-up: National Express, Southend airport, pensions
More than 3,000 National Express bus drivers in the West Midlands have voted to strike over pay, starting on 16 March, the same day as the next RMT train strike. The Unite union said members voted 96% in favour of industrial action, on a turnout of 72%. The workers will begin “all-out continuous” strike action on Thursday 16 March, the union said, with industrial action to carry on until the dispute is resolved. – Guardian
Nobel Prize-winning economist Joseph Stiglitz declared almost a decade ago that 2014 “was the last year in which the United States could claim to be the world’s largest economic power.” It was, he claimed, the start of the “Chinese century”. He was wrong: the US remains the world’s largest economy. Yet experts keep predicting that China will soon become the preeminent global superpower, now believing that China’s GDP will overtake America in the late 2030s. – Telegraph
Hooking up millions of electric vehicles, heat pumps and other devices to the UK’s electricity grid could save up to £4.7bn a year by the end of this decade, the energy watchdog has predicted. Ofgem on Thursday set out proposals for how the electricity grid of the future could work, using technology to ensure infrastructure is used as efficiently as possible. – Telegraph
Esken, the listed company spun out of the old Eddie Stobart trucking business that plans to create a sixth London airport at Southend, has announced that it is to sell the empty site as well as other assets. The former Stobart Group changed its name to Esken, which means “arise” in old English, in an attempt to get away from a controversial past punctuated by High Court litigation. – The Times
An ambitious state-backed project intended to enable everyone in Britain to see all their pension arrangements on one screen has been delayed because of the complexity of connecting the first pension schemes. The government said yesterday that “additional time” was needed for pensions providers to meet the deadline of August 31 to connect to the central computer system of the “pensions dashboard programme”. – The Times
