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London open: FTSE falls as ex-dividend stocks weigh
London stocks fell in early trade on Thursday amid a deluge of corporate news, dragged lower by ex-dividend shares.
At 0850 BST, the FTSE 100 was down 0.3% at 8,418.63.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has shed points after setting another record on Wednesday. The investor confidence boost from Wednesday’s encouraging inflation data in the US is being partially offset by wider thoughts on a busy day for company earnings.
“The overall mood remains bright though, with losses relatively minimal. That’s thanks to that inflation data – while the path to disinflation was never going to be without bumps, this latest indicator suggests things are moving in favour of Federal Reserve interest rate cuts this year – albeit this can change at short notice.”
In equity markets, BP, GSK, Kingfisher, Shell, Tesco, Bunzl and Essentra were all lower as they traded without entitlement to the dividend.
Sage Group tumbled despite posting solid first-half results, with traders suggesting that investors were disappointed there was no update on Copilot, which is the company’s AI digital assistant for business owners.
EasyJet flew lower as it said chief executive Johan Lundgren was to step down after more than seven years in the role. Lundgren, who has held the position since December 2017, will retire in early 2025. He will be replaced by current chief financial officer Kenton Jarvis.
The announcement came as easyJet posted a reduction in first-half losses. Traditionally its weaker half, as it does not include summer holidays, the headline pre-tax loss for the six months to 31 March narrowed to £350m from £411m a year previously.
Wizz Air also lost ground.
Convatec was in the red even as it said that revenue rose 5.2% in the fourth months to the end of April and that it was on track to deliver full-year guidance.
On the upside, BT jumped to the top of the FTSE 100 despite the telecoms giant reporting a 31% drop in annual profits in the year to 31 March, as it laid out plans to save £3bn of costs a year by the end of the decade.
Watches of Switzerland surged as the luxury timepiece retailer said it was “cautiously optimistic” about future trading after a 4% rise in sales in the final quarter of its financial year driven by the US.
Future and Helios Towers were both weaker after results, while Tyman fell on the back of a trading statement.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | +11.36% | +12.85 | 126.00 |
| 2 |  |
Crh Plc | +2.00% | +132.00 | 6,748.00 |
| 3 |  |
Prudential Plc | +1.74% | +14.00 | 817.80 |
| 4 |  |
Direct Line Insurance Group Plc | +1.63% | +3.20 | 199.80 |
| 5 |  |
Vodafone Group Plc | +1.37% | +1.04 | 77.14 |
| 6 |  |
Rio Tinto Plc | +1.34% | +74.00 | 5,596.00 |
| 7 |  |
Rentokil Initial Plc | +1.31% | +5.60 | 434.60 |
| 8 |  |
Hsbc Holdings Plc | +1.11% | +7.80 | 709.50 |
| 9 |  |
Rightmove Plc | +0.95% | +5.20 | 551.40 |
| 10 |  |
Hiscox Ltd | +0.95% | +11.00 | 1,172.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sage Group Plc | -12.78% | -153.00 | 1,044.50 |
| 2 |  |
Easyjet Plc | -6.04% | -32.00 | 497.40 |
| 3 |  |
Kingfisher Plc | -3.98% | -10.70 | 258.30 |
| 4 |  |
Pearson Plc | -2.97% | -29.20 | 955.20 |
| 5 |  |
Bunzl Plc | -2.64% | -82.00 | 3,028.00 |
| 6 |  |
United Utilities Group Plc | -2.47% | -27.50 | 1,084.50 |
| 7 |  |
Tesco Plc | -2.29% | -7.10 | 303.60 |
| 8 |  |
Shell Plc | -2.25% | -64.50 | 2,804.50 |
| 9 |  |
Bp Plc | -1.99% | -9.90 | 487.05 |
| 10 |  |
International Consolidated Airlines Group S.a. | -1.84% | -3.35 | 178.70 |
US close: Stocks higher following CPI reading
Wall Street stocks closed higher on Wednesday as market participants digested April’s all-important consumer price index report.
At the close, the Dow Jones Industrial Average was up 0.88% at 39,908.88, while the S&P 500 advanced 1.17% to 5,308.15 and the Nasdaq Composite saw out the session 1.40% firmer at 16,742.39.
The Dow closed 349.89 points higher on Wednesday, extending gains recorded in the previous session as investors thumbed over last month’s producer price index, which revealed that US producer prices rebounded more than expected last month after a downwardly revised fall in March, with the annual rate of inflation rising to its highest level in a year. The Bureau of Labor Statistics said its producer price index increased by 0.5% month-on-month in April, compared with a downwardly revised fall of 0.1% in March, more than expected and bumping the annual rate of inflation up to its highest level in a year.
However, attention quickly turned to today’s consumer price index, which revealed consumer goods and services prices increased 0.3% in April, according to the Bureau of Labor Statistics, principally due to higher oil prices and housing costs. However, the increase was below last month’s and short of the 0.4% forecast by economists.
The so-called core rate of inflation, which strips out volatile food and energy prices, was up 0.03% on March’s reading for the smallest rise in four months. The report also showed inflation rising 3.4% year-on-year, down slightly from 3.5% in the prior month, while core CPI climbed 3.6% in the 12 months ended April, down from 3.8% in the prior month for the lowest reading since April 2021 but well above the Federal Reserve’s target of 2% annual inflation.
Elsewhere on the macro front, US mortgage applications rose 0.5% in the week ended 10 May, according to the Mortgage Bankers Association of America, following on from a 2.6% jump in the previous week and came alongside a 10 basis point reduction in the average mortgage. Applications to refinance a mortgage jumped by 5% from the previous week, while applications to purchase a home dropped by 2%.
On another note, American consumers reined in their spending last month, especially on motor vehicles and parts, as well as online. But economists were quick to point to payback from the expiry of a one-off Amazon sales event as a key – and therefore temporary – factor behind the decline. According to the Department of Commerce, in seasonally adjusted terms retail sales volumes were flat month-on-month at $705.18bn (consensus: 0.4%).
Moving on, the New York Fed‘s Empire State manufacturing index fell to -15.6 in May, down from 14.3 in April and below consensus estimates for an improvement to -10.0, suggesting that business activity in New York State had declined for a sixth straight month.
Still on data, US business inventories fell by 0.1% month-on-month in March, according to the Census Bureau, following a 0.3% increase in February.
Finally, the National Association of Home Builders/Wells Fargo housing market index fell to 45.0 in May, the lowest reading in four months, down from 51 in April and below market expectations for a flat reading to mark the first decrease in builder sentiment since November 2023, principally due to mortgage rates consistently hovering above 7% for the past month.
Thursday newspaper round-up: JCB, M&S, smart meters
The British digger maker JCB, owned by the billionaire Bamford family, continued to build and supply equipment for the Russian market months after saying it had stopped exports because of Vladimir Putin’s invasion of Ukraine, the Guardian can reveal. Russian customs records show that JCB, whose owners are major donors to the Conservative party, continued to make new products available for Russian dealers well after 2 March 2022, when the company publicly stated that it had “voluntarily paused exports” to Russia. – Guardian
Marks & Spencer is teaming up with a recycling technology group to enable the retailer to trace what happens to its drinks bottles, cartons and other plastic packaging. The Polytag system prints an invisible tag on to containers, which can be picked up by electronic readers located at recycling centres. Products featuring the tags will begin appearing on shelves in the next three months. – Guardian
Car salesmen face a shortage of petrol vehicles under Rishi Sunak’s net zero crackdown, one of Britain’s biggest dealership chains has warned. Vertu Motors said sales of electric cars had “stalled” in the UK, raising the risk that manufacturers will miss sales targets mandated by law. Under the zero emissions vehicle (ZEV) mandate, 22pc of carmakers’ sales must be electric this year with the target rising annually until it reaches 80pc in 2030. – Telegraph
Smart water meters must be made compulsory across all households to protect the UK against climate change, the National Infrastructure Commission (NIC) has warned. The government agency is urging ministers to ramp up the roll-out of devices, as it claims water supplies were becoming one of the country’s biggest challenges. Without smart water meters, the NIC said the UK is at heightened risk of drought. – Telegraph
A challenger consultancy firm has been picking up staff recently cast aside by the Big Four as it readies itself for a rebound in merger and acquisition activity. DSW Capital, owner of the Dow Schofield Watts brand, has “invested significantly in recruitment” over the past 12 months. – The Times
