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London open: Stocks nudge up after US Treasury yields retreat
London stocks nudged higher in early trade on Thursday following solid gains on Wall Street, as a retreat in US Treasury yields provided some relief.
At 0840 BST, the FTSE 100 was up 0.1% at 7,420.90.
Neil Wilson, chief market analyst at Markets.com, said: “Swings and roundabouts: Lower oil, a weak ADP number – Treasury yields gave back some ground and the dollar pulled back from an 11-month high, enabling equity markets to put on a bit of a show yesterday, though the FTSE 100 lagged significantly due to the drop in crude prices which has underpinned its outperformance of late.
“Higher oil prices had been on the factors behind renewed angst over inflation, whilst Tuesday’s Jolts job openings data catalysed the brewing surge in yields. The Nasdaq rose 1.35%, the S&P up 0.8%, whilst the DAX added 0.1% and the FTSE declined 0.77%. This morning is seeing modest gains for Europe following a solid handover from Wall Street and Asia.
“Later we have weekly unemployment claims data from the US. Fed speakers include Barkin, Mester and Kashkari. All eyes though are on the non-farm payrolls report tomorrow.”
In equity markets, tobacco giant Imperial Brands gained after saying it will buy back a further £1.1bn in shares as it announced it was on track to hit forecasts this year.
Unite Group and Volution also rose after a trading update and full-year results, respectively.
On the downside, Weir Group, Bank of Georgia and Hays lost ground as they traded without entitlement to the dividend.
Metro Bank tanked following reports it’s looking to raise hundreds of millions of pounds from investors.
According to the Financial Times, which cited people with knowledge of the plan, the bank is looking to raise as much as £600m after its share price fell nearly 50% in recent weeks.
It was understood the challenger bank is in talks with investors about raising £250m in equity funding and £350m in debt to shore up its balance sheet.
Broker Shore Capital said: “Supporting a further capital raise for this struggling bank would be akin to throwing good money after bad, in our view, as it has already had enough time and opportunity to sort itself out and has been unable to do so. Investors and bondholders may therefore be better served investing their money elsewhere.”
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +3.72% | +15.70 | 438.10 |
| 2 |  |
Imperial Brands Plc | +3.45% | +54.50 | 1,634.50 |
| 3 |  |
Tesco Plc | +3.36% | +9.10 | 279.80 |
| 4 |  |
Tui Ag | +2.60% | +11.20 | 441.60 |
| 5 |  |
International Consolidated Airlines Group S.a. | +2.12% | +3.20 | 154.45 |
| 6 |  |
Flutter Entertainment Plc | +1.64% | +215.00 | 13,355.00 |
| 7 |  |
Compass Group Plc | +1.29% | +26.00 | 2,037.00 |
| 8 |  |
Halma Plc | +1.28% | +24.50 | 1,937.00 |
| 9 |  |
Informa Plc | +1.14% | +8.20 | 724.60 |
| 10 |  |
Berkeley Group Holdings (the) Plc | +1.11% | +44.00 | 4,014.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp Plc | -1.50% | -7.50 | 491.95 |
| 2 |  |
Shell Plc | -1.25% | -31.50 | 2,490.00 |
| 3 |  |
Anglo American Plc | -1.21% | -26.00 | 2,115.50 |
| 4 |  |
Barclays Plc | -1.21% | -1.86 | 152.02 |
| 5 |  |
Rolls-royce Holdings Plc | -0.90% | -1.90 | 208.90 |
| 6 |  |
Lloyds Banking Group Plc | -0.87% | -0.37 | 42.09 |
| 7 |  |
Glencore Plc | -0.85% | -3.75 | 439.55 |
| 8 |  |
Gsk Plc | -0.78% | -11.60 | 1,475.20 |
| 9 |  |
Aviva Plc | -0.62% | -2.40 | 385.30 |
| 10 |  |
Hsbc Holdings Plc | -0.53% | -3.40 | 637.10 |
US close: Stocks rise as Dow snaps three-day losing streak
Wall Street ended with a rebound on Wednesday, with major US stock indices ending the day in positive territory following a streak of losses, triggered partially by alleviating bond yields and underwhelming labour market figures.
At the close, the Dow Jones Industrial Average was up 0.39% to close at 33,129.55, halting its three-day decline.
The broader S&P 500 index climbed 0.81% to settle at 4,263.75, while the tech-heavy Nasdaq Composite led the gains, ascending 1.35% to conclude the trading session at 13,236.01.
In the currency space, the dollar was last down 0.02% against sterling and the euro, trading at 82.38p and 95.18 euro cents, respectively.
It also declined 0.06% versus the yen, changing hands at JPY 149.03.
“While most indices in Europe remain in the red, losses have slowed, while buyers have made an appearance on Wall Street this afternoon,” said IG chief market analyst Chris Beauchamp earlier.
“It’s not much of a bounce in risk appetite, but traders will be glad of any temporary respite.”
Beauchamp noted that recession fears were again rising with the US yield curve continuing to un-invert.
“The drop in oil prices is another welcome development this afternoon, though there’s a long way to go before fears of resurgent inflation can be put to bed.”
Hiring slackens, services sector simmers down in September
In economic news, US companies decelerated their hiring endeavours to the slowest pace since January 2021, according to new findings from consultancy firm ADP.
September saw private-sector employers adding just 89,000 new staffers to their ranks, starkly missing the consensus target of 158,000.
The deceleration was influenced mainly by a pronounced reduction of 83,000 positions in large enterprises – those boasting a workforce of over 500.
Divergently, the more minor actors in the business arena demonstrated a modicum of resilience amidst the larger hiring slump.
Small-scale companies with a relatively minimal staffing footprint introduced 95,000 payrolls, while their medium-sized counterparts followed suit, adding 72,000 to the labour market.
Regionally, the West South Central bore the brunt of employment contractions, seeing 74,000 positions dissolved.
A sectoral breakdown revealed a mixed bag, with goods-producing firms generating 8,000 new roles while service-oriented businesses crafted 81,000.
Nonetheless, manufacturing faced a reduction of 12,000 spots, and professional and business services saw a notable decrease, losing 32,000 positions.
“The September print is the lowest since January 2021, but there is zero statistical justification for changing our 175,000 private payroll forecast for Friday,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“ADP might be right, but that is not knowable in advance, and it could just as easily be very wrong.
“In any event, the biggest identifiable source of upside risk for Friday’s headline print is state and local government education jobs, where the seasonal patterns look extremely favourable.”
Elsewhere, the Institute for Supply Management’s (ISM) services purchasing managers’ index (PMI) nudged down to 53.6 in September from its August reading of 54.5, barely surpassing the consensus prediction of 53.5.
In tandem, S&P Global adjusted its September services PMI minutely downward from 50.2 to 50.1.
Chris Williamson, chief business economist at S&P Global Market Intelligence, noted the recent weakening in consumer-related travel and financial services.
“The economy therefore looks to be moving into the fourth quarter on a weak footing, hinting at slower GDP growth as we head toward the end of the year,” he said.
Cal-Maine dips on disappointing quarter, Intel and Moderna enjoy upswing
In equity markets, egg producer Cal-Maine Foods plunged 7.28% following quarterly results that fell notably short of analysts’ predictions.
The company also disclosed a drop in the average price for a dozen eggs – nosediving to $1.59 from the $2.28 mark in the comparable period a year earlier.
On the upside, chip giant Intel managed gains of 0.67% following the announcement that it intended to launch an initial public offering for its programmable solutions group in the upcoming years.
The decision would follow in last year’s spinoff of Mobileye Global.
Biotechnology company Moderna closed ahead 1.14% after it reported that its dual-action vaccine, designed to combat both Covid-19 and flu, showed a robust immune response in preliminary studies compared to singularly-focussed vaccines.
Thursday newspaper round-up: UK rents, Metro Bank, Mike Lynch
Private home rents in Great Britain have increased to their highest point on record after shortages in supply and mortgage rate rises combined to push the cost up by 10% over the past 12 months. The average rent for new properties being put on the market now stands at a record £1,278 per calendar month outside London in the July to September period, according to Rightmove. – Guardian
Metro Bank is considering raising hundreds of millions of pounds from investors, weeks after the high street lender failed to convince regulators it could be trusted to hold less cash against its mortgage risks. The high street lender, which became the first new chain in the UK for more than a century when it was launched by the American billionaire Vernon Hill in 2010, had applied to use its own internal models to assess the risks of its mortgages, but that request was denied in early September. – Guardian
Mike Lynch, the tech entrepreneur accused of leading Britain’s biggest ever corporate fraud, has launched a legal bid to have a string of US criminal charges against him thrown out. Mr Lynch, the founder of the former FTSE 100 software company Autonomy, has filed to dismiss the 17 charges against him, saying the US has no jurisdiction over the case. His lawyers describe the charges, which could lead to decades in prison, as “impermissibly extraterritorial” and say they contain “fatal legal deficiencies”. – Telegraph
The former chief executive of Carillion has been disqualified as a director for eight years for his role in allegedly concealing accounting troubles at the collapsed construction company. The Insolvency Service, acting on behalf of the business and trade secretary, said that it had accepted a disqualification undertaking from Richard Howson, 55, who led the failed outsourcer from 2012 until July 2017, when his departure was announced alongside the first of three profit warnings. – The Times
The majority of bosses believe that their staff will be back working in the office five days a week within the next three years. Sixty-four per cent of the 1,300 global chief executives who responded to KPMG’s annual outlook survey predicted a full return to in-office working by the end of 2026. – The Times
