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London open: Stocks edge up despite US debt ceiling concerns
Stocks were being buoyed at the start of the week by positive headlines around the ongoing debt ceiling talks in the US, although analysts were cautious
.In remarks made overnight, Lael Brainard, the head of the US National Economic Council, said that talks thus far had been “serious” and “constructive”, even as she added that a debt default would be “catastrophic” for the economy.
President Joe Biden was to meet the Republican speaker of the U.S. House of Representatives, Kevin McCarthy, on Tuesday, ahead of the former’s departure on the following day for the G-7 summit in Japan.
“I remain optimistic because I’m a congenital optimist. But I really think there’s a desire on their part as well as ours to reach an agreement and I think we’ll be able to do it,
As of 0936 BST, the FTSE 100 was trading up by 0.30% to 7,777.56, while the second-tier index was 0.02% higher alongside at 19,191.80.
No major economic releases were scheduled in the UK, but Bank of England chief economist, Huw Pill, was due to deliver a speech at 1700 BST.
Across the Channel, at 1000 BST the European Commission would publish its latest set of economic forecasts for the bloc.
They would be followed at 1330 BST by the Federal Reserve Bank of New York’s regional factory sector index.
Several top Fed officials were expected to deliver speeches or make remarks on Monday.
Apollo pulls Wood Group bid
US private equity firm Apollo Global on Monday pulled plans to make a takeover offer for UK oil industry engineer Wood Group. Apollo had made five approaches for the company and was had to table a firm bid or walk away by May 17. In response, the Wood board said it remained confident in its strategic direction and long-term prospects and believes that, “following a transformative year in 2022, including new executive leadership and a new strategy” the company was “well placed to deliver substantial value for shareholders”.
Diploma posted a strong set of results for the first half of its financial year. Revenues were up ahead by 30% to £582.8m and by 10% on an organic basis. It also said that the back half had begun “positively”, which led management to raise its full-year guidance. Full-year organic growth was now pegged to come in at 7%. That was on top of approximately another 7% rise in sales expected to accrue from acquisitions, net of disposals. In parallel, the company’s leverage was seen declining to below 0.4 times before any acquisition investment.
UK electricals retailer Currys on Monday lifted its full-year earnings guidance after trading in the final two months of its fiscal year were better-than-expected. Adjusted pre-tax profit for the year to April 29 is now expected to come in at £110 – 120m compared with previous guidance of £104m, citing improved profits driven by continued gross margin improvements and management focus on cost efficiencies. It added that an in-year benefit from non-repeating mobile debtor revaluation had been higher than prior year and forecast.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Anglo American Plc | +2.12% | +49.50 | 2,387.00 |
| 2 |  |
Glencore Plc | +1.75% | +7.55 | 439.85 |
| 3 |  |
Antofagasta Plc | +1.65% | +23.00 | 1,420.00 |
| 4 |  |
Mondi Plc | +1.37% | +17.50 | 1,298.50 |
| 5 |  |
Flutter Entertainment Plc | +1.29% | +205.00 | 16,125.00 |
| 6 |  |
Rio Tinto Plc | +1.27% | +62.50 | 4,980.00 |
| 7 |  |
Bhp Group Limited | +1.24% | +29.00 | 2,363.00 |
| 8 |  |
Compass Group Plc | +1.16% | +25.00 | 2,182.00 |
| 9 |  |
3i Group Plc | +1.15% | +21.00 | 1,849.50 |
| 10 |  |
Centrica Plc | +1.05% | +1.20 | 115.95 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -1.50% | -6.60 | 434.80 |
| 2 |  |
Rolls-royce Holdings Plc | -1.18% | -1.75 | 146.55 |
| 3 |  |
Carnival Plc | -0.88% | -6.20 | 694.60 |
| 4 |  |
Hargreaves Lansdown Plc | -0.67% | -5.40 | 798.60 |
| 5 |  |
Admiral Group Plc | -0.62% | -14.00 | 2,240.00 |
| 6 |  |
Hiscox Ltd | -0.51% | -6.00 | 1,164.00 |
| 7 |  |
Tesco Plc | -0.51% | -1.40 | 274.30 |
| 8 |  |
Shell Plc | -0.48% | -11.50 | 2,397.50 |
| 9 |  |
Direct Line Insurance Group Plc | -0.47% | -0.75 | 159.80 |
| 10 |  |
Itv Plc | -0.40% | -0.30 | 74.26 |
Monday newspaper round-up: Turkey election, inflation, cannabis, Isle of Man, licence fee
Record high turnout in a tightly fought election has presented the Turkish president Recep Tayyip Erdoğan with the greatest challenge to his leadership in two decades, with signs that the vote was heading for a runoff even as Erdoğan attempted to claim victory before an official vote count had ended. Speaking to a jubilant crowd of supporters, an energised and delighted Erdoğan declared: “The fact that the election results have not yet been finalised does not diminish the fact that our nation’s choice is clearly in favour of us.” – Guardian
Graduates entering the labour market face real terms hits of up to £6,500 to their wages as starting salaries fail to keep pace with rampant inflation. University leavers starting work now are thousands of pounds worse off than before the pandemic, Telegraph analysis of Indeed data shows. The average graduate entering the job market today has a starting salary of £26,500, up from £24,000 at the start of 2019. – Telegraph
President Zelensky will be in London today for “substantive negotiations” with the prime minister, Rishi Sunak. The Ukrainian leader wrote on Twitter that the UK was a “leader” in supporting Ukraine and that “when it comes to expanding our capabilities on the ground and in the air”. – The Times
The Isle of Man has for decades been dominated by offshore financial services, but now its government is planning a push for a new kind of economic growth: medicinal cannabis. The British crown dependency is hoping to licence as many as 10 firms by the end of 2025 to grow and export medicinal cannabis products from the island as part of a strategy to spur development. – Guardian
An Irish property tycoon behind Claridge’s said he wanted to hire a “non-gay” manager to run the luxury London hotel, according to documents filed in the High Court. Patrick McKillen is also said to have described a female contractor as a “Spanish c—“. The allegations mark the latest twist in a row between Mr McKillen and the Qatari royal Sheikh Hamad bin Jassim bin Jaber al-Thani, who controls the Maybourne Hotel Group, which owns Claridge’s as well as the Berkeley and The Connaught hotels. – Telegraph
A project to update the technology behind the BBC’s licence fee is behind schedule, over budget and considered to be in a critical state by Capita, the outsourcing company responsible for it. The project has been classified within Capita as “red”, needing urgent attention, on an internal traffic-light system. Capita is responsible for administering the licence fee on behalf of the broadcaster in a five-year deal worth £456 million, after it won an extension to its contract last year. – The Times
