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London open: Stocks edge lower amid corporate deluge; banks rally
London stocks edged lower in early trade on Thursday as investors waded through a raft of corporate news.
At 0910 BST, the FTSE 100 was down 0.2% at 7,881.71.
Neil Wilson, chief market analyst at Markets.com, said: “A modest decline after such a strong run indicates bulls pausing for consolidation but next couple of weeks is key really as this is hinging on global risk appetite and the Fed.
“And earnings – the next two weeks are key with a deluge of megacap tech and Dow components coming down the pipe – the banks and Netflix/Tesla have only been the appetisers; the main course is served up over the next fortnight.”
In equity markets, miners were on the back foot, with Antofagasta, Anglo American and Rio Tinto all down as metals prices fell.
Rio Tinto was also in focus after it reported record first-quarter iron ore shipments from its Plibara operations in Western Australia as China ramped up steel production, but cut copper output guidance due to issues at its US Kennecott and Chilean Escondida operations.
Elsewhere, WH Smith lost ground even as the retailer hailed a “strong” first-half performance, ahead of its expectations, as the travel segment benefited from a significant recovery in passenger numbers.
On the upside, banks rallied as Wednesday’s hotter-than-expected UK inflation print raised rate hike expectations, with Barclays, NatWest, HSBC and Lloyds all up.
Real estate investment trust Segro gained after saying 2023 had got off to strong start, boosted by solid occupier demand and limited supply.
Consumer healthcare giant Haleon rose as it posted first-quarter sales ahead of expectations, boosted by a strong cold and flu season.
Investment platform operator AJ Bell was trading up even as it said that inflows had decreased in the three months ended 31 March despite seeing customer numbers grow during the period.
Iron ore pellet maker Ferrexpo advanced after it said Ukraine’s Supreme Court had ruled in favour of the company in a dispute over a share deal.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | +146.74% | +237.65 | 399.60 |
| 2 |  |
Segro Plc | +3.14% | +24.20 | 796.00 |
| 3 |  |
Itv Plc | +1.72% | +1.38 | 81.80 |
| 4 |  |
Direct Line Insurance Group Plc | +1.54% | +2.55 | 167.90 |
| 5 |  |
Ferguson Plc | +1.32% | +140.00 | 10,745.00 |
| 6 |  |
Land Securities Group Plc | +1.32% | +8.40 | 645.80 |
| 7 |  |
Easyjet Plc | +1.05% | +5.40 | 517.80 |
| 8 |  |
Croda International Plc | +0.96% | +66.00 | 6,956.00 |
| 9 |  |
British Land Company Plc | +0.93% | +3.60 | 389.30 |
| 10 |  |
Barclays Plc | +0.86% | +1.34 | 156.74 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | -4.09% | -66.00 | 1,548.50 |
| 2 |  |
Bhp Group Limited | -2.78% | -70.00 | 2,450.00 |
| 3 |  |
Anglo American Plc | -2.57% | -71.00 | 2,690.50 |
| 4 |  |
Tui Ag | -2.25% | -12.00 | 520.60 |
| 5 |  |
Mondi Plc | -1.72% | -22.50 | 1,286.50 |
| 6 |  |
Rio Tinto Plc | -1.63% | -90.00 | 5,440.00 |
| 7 |  |
Spirax-sarco Engineering Plc | -1.60% | -185.00 | 11,405.00 |
| 8 |  |
Smith (ds) Plc | -1.41% | -4.60 | 321.70 |
| 9 |  |
Smurfit Kappa Group Plc | -1.25% | -38.00 | 3,004.00 |
| 10 |  |
Carnival Plc | -1.11% | -7.80 | 695.80 |
US close: Stocks mixed as Fed reports fall in loan demand
Wall Street’s stock indices closed mixed on Wednesday, with little change overall, as investors responded to the latest round of quarterly earnings from the likes of Morgan Stanley.
The Dow Jones Industrial Average fell 0.23% to close at 33,897.01, while the S&P 500 slipped 0.01% to 4,154.52.
Going the other way, the Nasdaq Composite eked out gains of 0.03% to end the day at 12,157.23.
The latest inflation figures out of the UK also weighed on market sentiment, as consumer price growth slowed less than expected in March as food price inflation remained red-hot.
In currencies, the dollar was last up 0.06% on sterling at 80.44p, while it gained 0.01% against the common currency to 91.29 euro cents.
The yen rate remained unchanged, however, changing hands at JPY 134.72.
“Short-term US yields have been on the up for about a week, but stocks are only really noticing now,” said IG chief market analyst Chris Beauchamp earlier.
“After a reasonable start to earnings season we have seen a more cautious mood creep in, which is understandable given the fears about a recession happening within the next year.
“Losses have been relatively contained however, with stocks caught more in a period of indecision rather than heading into another big sell-off.”
Beige Book shows fall in demand for lending
In economic news, the latest edition of the Federal Reserve’s Beige Book was released late in the session, showing US economic activity was broadly unchanged in late March and early April.
The report, which includes non-scientific survey responses on economic conditions across the Fed’s 12 districts, showed nine of them reported either no change or slight growth in activity, while three districts reported modest growth.
However, the Fed said both bank lending and lending demand from consumers and businesses “generally declined”.
That was particularly pronounced in the San Francisco region, given the recent collapse of specialist tech startup lender Silicon Valley Bank.
Meanwhile, the Mortgage Bankers Association of America reported that mortgage applications plummeted 8.8% in the week ended 14 April – a stark reversal from the previous week’s 5.3% rise.
Applications to purchase a home fell by 10%, while applications to refinance a home loan dropped 5.8%.
According to MBA chief economist Joel Kan, the trend was due to “affordability challenges” and a lack of available inventory in many markets, leading buyers to be more selective in their purchasing decisions.
Morgan Stanley manages positive close, Netflix slides on revenue
In equities, investment banking giant Morgan Stanley saw its shares close 0.67% higher, after it exceeded consensus expectations for both revenue and net income in its quarterly earnings.
Ailing retailer Bed Bath & Beyond rose by a whopping 35.28% amid renewed social media speculation over the meme investor favourite.
On the downside, Netflix fell 3.17% after it released a disappointing set of numbers overnight, beating earnings estimates but falling short of revenue expectations.
Thursday newspaper round-up: Meta, Heathrow, Murdoch, BP
Meta workers are bracing for thousands of additional layoffs as the embattled social media firm continues to cut costs. A new round of layoffs began on Wednesday, according to a report from CNBC that was confirmed by Meta. The company will cull 4,000 jobs immediately as part of a larger plan to cut 10,000 jobs announced earlier this year, focusing largely on technical roles. – Guardian
Security staff at Heathrow airport are to strike on eight days next month in a dispute over pay. The action by members of the Unite union will take place on 4, 5, 6, 9, 10, 25, 26 and 27 May, and follow strikes over Easter. – Guardian
Rupert Murdoch’s bill for settling defamation lawsuits against Fox News is likely to eclipse the £1bn paid out in the wake of the phone-hacking scandal. Fox reached a dramatic 11th-hour settlement with Dominion Voting Systems on Tuesday over accusations that the news network knowingly broadcast false claims that Dominion’s technology was used to rig the 2020 election of Joe Biden. – Telegraph
A shareholder revolt to remove Helge Lund as chairman of BP was gathering momentum last night, with five of Britain’s biggest pensions schemes planning to vote against his re-election in protest at the company’s watering down of green commitments. The Universities Superannuation Scheme followed the National Employment Savings Trust in announcing plans to vote against Lund. Brunel Pension Partnership, a group of nine council schemes, also said it would vote to oust him. Two other council pension umbrella groups, LGPS Central and Border to Coast, are said to be joining them. – The Times
A leading American consultancy has offered new recruits from business schools thousands of dollars to hold off joining and kill time by becoming a yoga instructor or by heading out on safari. Bain has given sizeable financial incentives to recruits with postgraduate business degrees to push back their start dates until next April, according to The Wall Street Journal, which reported that McKinsey had also delayed new starts. – The Times
