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London open: FTSE nudges lower as energy, mining stocks fall
London stocks nudged lower in early trade on Monday, with miners and energy shares under pressure, as traders looked ahead to key US and UK results later in the week.
At 0850 BST, the FTSE 100 was down 0.1% at 7,905.63.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “A forecast deterioration in the health of the global economy is weighing on minds, pushing equities lower as investors mull the impact of further punishing rate hikes.
“Oil prices have slid further back, largely erasing gains made since OPEC+ announced production cuts, with Brent crude dipping closer to $80 a barrel. The FTSE 100 has opened lower, with BP and Shell and miner Anglo American and Antofagasta among the fallers, as investors assess the prospect that demand for energy and metals will wane if economies contract.”
Investors were also likely erring on the side of caution ahead of results from the likes of NatWest, Barclays and GSK in the UK this week and a flurry of tech results in the US, from Microsoft, Alphabet, Meta Platforms and Amazon .
On home shores, the latest house price index from Rightmove out earlier showed that growth in house prices eased in April.
On a monthly basis, average asking prices rose by just 0.2% to £366,247, down from 0.8% growth in March and lower than the average of 1.2% at this time of year.
Rightmove said the unseasonal pricing restraint “is a sign that many new sellers are taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels, last seen in the pre-pandemic market of 2019”.
On a year-over-year basis, meanwhile, prices were up 1.7% in April, down from 3% a month earlier.
The average asking price for first-time buyers rose 0.2% in the month in April and 2% on the year to a record £224,963.
Tim Bannister, Rightmove’s director of property science, said: “Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt Spring buyers with a competitive price.
“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace. Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.
“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.”
In equity markets, miners and energy shares lost ground as base metals and crude prices fell, with BP, Shell, Glencore and Anglo American among the worst performers on the FTSE 100.
Online fashion retailer Asos was under the cosh after it emerged that ShadowFall had built a £4m short position in the company.
On the upside, Wizz Air flew higher after a rating upgrade by Citi.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tui Ag | +2.07% | +10.60 | 523.40 |
| 2 |  |
Hikma Pharmaceuticals Plc | +1.58% | +29.00 | 1,859.50 |
| 3 |  |
Next Plc | +1.27% | +86.00 | 6,880.00 |
| 4 |  |
St. James’s Place Plc | +1.07% | +13.00 | 1,232.00 |
| 5 |  |
Associated British Foods Plc | +0.88% | +18.00 | 2,064.00 |
| 6 |  |
Crh Plc | +0.86% | +34.00 | 4,006.00 |
| 7 |  |
Antofagasta Plc | +0.85% | +13.00 | 1,543.00 |
| 8 |  |
Carnival Plc | +0.78% | +5.20 | 669.00 |
| 9 |  |
Rio Tinto Plc | +0.74% | +38.00 | 5,169.00 |
| 10 |  |
Whitbread Plc | +0.74% | +23.00 | 3,148.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | -1.79% | -7.25 | 397.10 |
| 2 |  |
Fresnillo Plc | -1.29% | -9.80 | 751.20 |
| 3 |  |
Glencore Plc | -1.22% | -6.00 | 484.90 |
| 4 |  |
Shell Plc | -0.98% | -24.00 | 2,429.00 |
| 5 |  |
Easyjet Plc | -0.82% | -4.20 | 507.60 |
| 6 |  |
Rentokil Initial Plc | -0.75% | -4.60 | 610.40 |
| 7 |  |
Bp Plc | -0.70% | -3.70 | 526.30 |
| 8 |  |
Bae Systems Plc | -0.69% | -7.00 | 1,011.00 |
| 9 |  |
Pearson Plc | -0.61% | -5.20 | 847.20 |
| 10 |  |
Tesco Plc | -0.57% | -1.60 | 277.30 |
US close: Stocks weaker as earnings disappoint
Wall Street stocks were still weaker by the close on Thursday, as a fall in oil prices weighed on energy stocks, while continued concerns over the federal debt ceiling added to the dampened investor sentiment.
The Dow Jones Industrial Average closed at 33,786.62, down 0.33%, while the S&P 500 and the Nasdaq Composite saw even greater losses, falling 0.6% and 0.8% to 4,129.79 and 12,059.56, respectively.
On the currency front, the dollar was last up 0.04% on sterling at 80.39p, while it strengthened 0.02% against the common currency to trade at 91.17 euro cents.
It was 0.16% weaker against the yen, however, to change hands at JPY 134.03.
“The disappointing earnings keep on coming,” quipped IG chief market analyst Chris Beauchamp earlier.
“Fresh from Tesla’s poor showing last night – and of course the loss of Musk’s SpaceX rocket – AT&T and American Airlines have thrown fresh fuel on to the bearish fire with uninspiring results.
“As yet, however, the market refuses to turn substantially lower – dip buyers have been content to step in over the past few sessions, even if they haven’t yet found the strength to push indices to fresh monthly highs.”
Data points to labour market weakness as home sales fall
In economic news, the US labour market showed some weakness in the week ended 15 April, with initial unemployment claims rising by 5,000 to reach 245,000 in seasonally-adjusted terms according to the Department of Labor.
That was slightly higher than economists’ forecasts for 242,000.
Meanwhile, the Federal Reserve Bank of Philadelphia reported that factory sector activity in the US mid-Atlantic region unexpectedly softened in April, with the regional manufacturing sector index dropping from -23.2 in March to -31.3.
That was worse than the reading of -20.0 economists had pencilled in.
Elsewhere, the Conference Board‘s leading index also saw a decline of 1.2% in March, reaching a reading of 108.4.
That marked an acceleration from the 0.5% decline in February.
Finally on data, the National Association of Realtors reported that US existing home sales fell by 2.4% month-on-month in March, to a seasonally-adjusted annual rate of 4.4 million, just below the estimated 4.5 million.
However, February saw a revised 13.8% increase in sales, making for the biggest surge since July 2020.
IBM ekes out gains as Tesla takes a tumble
On the equity front, International Business Machines (IBM) managed gains of 0.03% after it announced that margins had expanded.
Housebuilder DR Horton surged 5.64% after the firm reported improved demand throughout the first quarter.
Tools and equipment behemoth Snap-On posted impressive quarterly earnings per share that beat estimates by 46 cents, seeing its share price jump 7.97%.
On the downside, electric carmaker Tesla took a 9.75% hit after it was revealed that both net income and GAAP earnings had declined by more than 20% year-on-year.
Telecoms giant AT&T tumbled 10.41% despite the company beating earnings estimates, as it posted weaker-than-expected free-cash flow.
American Express profits fell short of expectations, seeing its shares decline 1.01%, despite its quarterly report pointing to a continued surge in consumer spending.
Finally, tobacco company Philip Morris International lowered its full-year adjusted earnings per share guidance as first-quarter earnings contracted, despite revenue growth.
That saw its stock sitting 4.73% lower by the closing bell.
Monday newspaper round-up: Credit Suisse, house prices, Revolut
Credit Suisse says 61bn Swiss francs ($68bn/£55bn) left the bank in the first quarter, shedding light on the scale of the bank run that caused the 167-year-old institution to crumble and forced its state-engineered rescue. “These outflows have moderated but have not yet reversed as of April 24 2023,” Credit Suisse said on Monday. – Guardian
Those people hoping to get on to the UK housing ladder are facing record asking prices, as calm returns to the sector after last autumn’s mini-budget spooked the markets. Rightmove, the property portal, reports that the average asking price of properties popular with first-time buyers – those with one or two bedrooms – has hit a record price of £224,963 in the last month. That is 2% higher than a year ago, even though higher mortgage rates have made homes less affordable. – Guardian
National Grid is quitting its foray into developing carbon capture and storage in the UK, in a blow to the Government’s net zero ambitions. The FTSE 100 company is abandoning its plans to develop new pipelines in the Humber region to take carbon dioxide emissions out to the North Sea. Its National Grid Ventures arm is in talks to sell the onshore pipeline project to partners, and has already quit another phase of the project. – Telegraph
About $15 billion has been wiped from the valuation of Revolut by one of its most loyal shareholders on the back of a more cautious assessment of financial technology stocks. The 46 per cent writedown by Schroders implies that Britain’s biggest fintech unicorn is now valued at about $17.7 billion, well down on the $33 billion price tag implied by a capital-raising in July 2021. – The Times
Error messages flashed up as staff at Capita tried to log into their accounts on Friday, March 31. Frustrated workers were advised not to submit password reset requests to swamped technology teams as the outsourcer got to grips with what was going on. In a preliminary statement that morning, dictated over the phone as the media team was also locked out of its email accounts, Capita said it was investigating a “technical issue” with its IT systems. – The Times
