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London open: Stocks fall but Whitbread bucks trend after results
London stocks fell in early trade on Tuesday as investors mulled the latest UK borrowing figures and results from the likes of AB Foods and Whitbread, ahead of key US tech earnings.
At 0910 BST, the FTSE 100 was down 0.3% at 7,884.96.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Caution is in the air ahead of the results from big tech rolling in, and the latest snapshot of US consumer confidence.
“Investors are assessing the extent to which nervousness about what may lie ahead for economies is holding back marketing budgets and delaying purchases by shoppers. The FTSE 100 has taken a more downbeat cue from trading in Asia and has opened lower with mining stocks under pressure, as concerns swirl about lower demand for commodities.”
On the macro front, figures released earlier by the Office for National Statistics showed that government borrowing continued to rise in March, partly due to the energy support scheme.
Public sector net borrowing came in at £21.5bn, slightly above expectations of £21.3bn and up £16.3bn on March 2022. It also marked the second-highest borrowing figure since monthly records began in 1993.
Meanwhile, borrowing for the financial year ending 31 March was estimated at £139.2bn – up £18.1bn on the previous year and the fourth highest since records began. The figure represents 5.5% of GDP.
Chancellor Jeremy Hunt said: “These numbers reflect the inevitable consequences of borrowing eye-watering sums to help families and businesses through a pandemic and Putin’s energy crisis.
“We were right to do so because we have managed to keep unemployment at a near-record low and provided the average family more than £3,000 in cost of living support this year and last.
“We stepped up to support the British economy in the face of two global shocks, but we cannot borrow forever. We now have a clear plan to get debt falling which will reduce the financial pressure we pass onto our children and grandchildren.”
In equity markets, miners were among the worst performers, with Rio, Glencore and Anglo American all down.
Primark owner Associated British Foods was also down after it reported lower interim profits as the clothing retailer and foods group battled inflationary headwinds and lower consumer spending amid the cost-of-living crisis. It posted adjusted operating profit of £684m, down 3%, for the 24 weeks to March 4. Primark profits fell to £351m, compared with £414m a year earlier.
On a pre-tax basis AB Foods earnings for the period rose 1% at £644m, supported by a 23% rise in profits at its foods and division. The firm expects full-year profits to flat, in line with guidance.
Builders merchant Travis Perkins was weaker as it held annual guidance despite a tough first quarter as the house building market stalled and property renovation and maintenance was deferred.
On the upside, Premier Inn owner Whitbread rallied after saying that full-year earnings had soared above pre-pandemic levels on the back of strong demand for hotel rooms after the lifting of Covid-19 travel restrictions and unveiled a £300m share buyback.
The company, which also owns the Beefeater steakhouse chain, reported pre-tax profit of £375m, up from £58m a year ago and £218m in 2020 before the pandemic shut down the leisure and hospitality sectors.
Eurowag gained ground after a well-received first-quarter trading update.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Whitbread Plc | +5.50% | +172.00 | 3,298.00 |
| 2 |  |
Tui Ag | +3.45% | +17.80 | 533.60 |
| 3 |  |
Vodafone Group Plc | +2.04% | +1.83 | 91.51 |
| 4 |  |
Flutter Entertainment Plc | +1.27% | +200.00 | 15,990.00 |
| 5 |  |
Imperial Brands Plc | +1.18% | +23.00 | 1,973.00 |
| 6 |  |
Bae Systems Plc | +1.03% | +10.50 | 1,032.50 |
| 7 |  |
British American Tobacco Plc | +0.89% | +26.00 | 2,948.00 |
| 8 |  |
Bp Plc | +0.75% | +4.00 | 537.90 |
| 9 |  |
Ocado Group Plc | +0.59% | +3.00 | 508.80 |
| 10 |  |
Intercontinental Hotels Group Plc | +0.50% | +28.00 | 5,584.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Associated British Foods Plc | -5.22% | -108.00 | 1,962.00 |
| 2 |  |
Centrica Plc | -2.94% | -3.35 | 110.50 |
| 3 |  |
Anglo American Plc | -2.37% | -59.50 | 2,452.50 |
| 4 |  |
Antofagasta Plc | -2.27% | -34.50 | 1,482.50 |
| 5 |  |
Rio Tinto Plc | -2.22% | -114.00 | 5,027.00 |
| 6 |  |
Glencore Plc | -2.21% | -10.75 | 475.60 |
| 7 |  |
Bhp Group Limited | -1.71% | -40.50 | 2,323.00 |
| 8 |  |
Standard Chartered Plc | -1.64% | -10.40 | 622.00 |
| 9 |  |
Lloyds Banking Group Plc | -1.60% | -0.78 | 48.13 |
| 10 |  |
Kingfisher Plc | -1.59% | -4.10 | 253.20 |
US close: Stocks delivered mixed performance as traders await tech earnings
Wall Street stocks delivered a mixed performance on Monday as traders braced for another earnings-heavy week.
At the close, the Dow Jones Industrial Average was up 0.20% at 33,875.40, while the S&P 500 advanced 0.09% to 4,137.04 and the Nasdaq Composite saw out the session 0.29% weaker at 12,037.20.
The Dow closed 66.44 points higher on Monday, building on modest gains recorded in the previous session.
Earnings were in focus yet again on Monday, famous fizzy drinks maker Coca-Cola beat first-quarter profit and revenue forecasts driven by high demand and price rises, while Credit Suisse posted a $68.0bn drop in assets for the last quarter.
Whitegoods giant Whirlpool reported a quarterly loss of $179.0m after the close as it beat revenue estimates.
Market participants also looked ahead to big-name tech earnings later in the week, with Alphabet, Microsoft, Amazon and Meta all set to announce their first-quarter numbers before the end of the week.
On the macro front, the Chicago Federal Reserve‘s national activity index fell to -31.3 in April, down from -23.2 in March for its lowest reading since May 2020 and an eighth consecutive negative reading.
On a similar note, the Dallas Fed‘s manufacturing index declined to -23.4 in April, down from -15.7 in March – its lowest reading in nine months and below expectations for a reading of -14.6.
Tuesday newspaper round-up: CBI, tech firms, Lidl
The Confederation of British Industry has admitted it failed to “filter out culturally toxic people” from its ranks, leading to “terrible consequences” including allegations of sexual harassment. The CBI president, Brian McBride, said in a letter to its members that the organisation had “made mistakes” and “badly let down” its staff, after a series of revelations in the Guardian about alleged misconduct by employees, including two women who said they were raped. – Guardian
Major tech firms face the threat of multibillion-pound fines for breaching consumer protection rules under new legislation that will tackle issues including fake online reviews and subscriptions that are difficult to cancel. The digital markets, competition and consumers bill will empower the UK’s competition watchdog to tackle the “excessive dominance” that a small number of tech firms hold over consumers and businesses.m – Guardian
Millions of people failed to receive a government emergency alert on Sunday because of a suspected software glitch on Three’s mobile network. The company is thought to have scrambled engineers to a base near Reading to resolve the problem after many customers reported that the new national emergency alert had failed to sound on their phones. – Telegraph
Lidl could take on Waitrose and Marks & Spencer in their middle-class heartlands by opening stores in some of London’s most affluent neighbourhoods. The German discount supermarket chain has published a list of 247 desired sites for new shops across Britain, with Chelsea, Kensington, Mayfair, Westminster and Knightsbridge among potential locations. It trades from more than 100 stores in London and within the M25, including Shepherd’s Bush, Tottenham Court Road, Clapham Junction and Brixton. – The Times
Gymshark feared that its growth would stall this year for the first time since it was co-founded in 2012 by Ben Francis. The Solihull-based activewear brand, which was valued at more than £1 billion when General Atlantic, the American private equity firm, acquired a 21 per cent stake in 2020, said in its accounts that its sales for the year to July were “tracking at the same level” as in 2022, when they hit £484.5 million, up 21 per cent. – The Times
