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London open: Stocks flat as investors mull retail sales; PageGroup, Indivior warn on profits
London stocks were steady in early trade on Tuesday as investors mulled a dip in retail sales and profit warnings from PageGroup and Indivior.
At 0820 BST, the FTSE 100 was flat at 8,190.31.
Market participants were still digesting comments from Bank of England policymaker Jonathan Haskel on Monday, which cast doubt over the prospect of a rate cut in August.
In a speech at King’s College London, Haskel said he wanted to keep interest rates on hold “until there is more certainty that underlying inflationary pressures have subsided sustainably”.
Retail sales figures were also in focus, as they revealed a slight dip in June as a result of a markedly cooler summer so far.
According to the latest BRC-KPMG Retail Sales Monitor overall sales decreased 0.2% year-on-year, comparing unfavourably with the 4.9% growth seen in June last year, but still above the three-month average decline of 1.1%.
“Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending,” said British Retail Consortium chief executive officer Helen Dickinson.
“Sales of weather-sensitive categories such as clothing and footwear, as well as DIY and gardening were hit particularly hard, especially compared to the surge in spending during last June’s heatwave.”
Dickinson added that electronics sales had a better month as football fans upgraded their home entertainment systems and people replaced pandemic purchases.
“Retailers remain hopeful that as the summer social season gets into full swing and the weather improves, sales will follow suit.”
In equity markets, BP slumped after saying it would take a hit of up to $2bn in the second quarter relating to asset impairments and onerous contract provisions, including charges relating to the ongoing review of its Gelsenkirchen refinery in Germany.
The oil and gas giant also forecast flat upstream production in the second quarter, while its gas marketing and trading result was also expected to be average following a strong result in the first quarter.
Recruiter PageGroup was under the cosh as it warned on full-year profits, citing geopolitical and macroeconomic uncertainty and a more cautious view for the second half. It now expects FY24 operating profit of around £60m, down from £118.8m a year earlier and below estimates of £90m. Fellow recruiter SThree also lost ground.
Indivior tanked as the opioid addiction treatment maker downgraded its FY24 adjusted operating profit forecast to between $285m and $320m from $330m to $380m, and said it was cutting around 130 jobs.
On the upside, engineering and consulting firm Wood Group rose after saying it had signed a six-year contract with energy giant Shell to provide brownfield engineering, procurement, and construction management for the latter’s Prelude floating liquefied natural gas platform facility in Western Australia.
Vistry gained after the housebuilder backed its full-year expectations as it hailed a “strong” first half and said profit was expected to have risen 7%. Persimmon and Barratt also rose.
Capita rocketed as the outsourcer announced the sale of its public sector software business for £200m.
Elsewhere, B&Q owner Kingfisher and electricals retailer Currys both pushed higher after upgrades to ‘buy’ at Deutsche Bank.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
United Utilities Group Plc | +2.38% | +24.50 | 1,055.50 |
| 2 |  |
Severn Trent Plc | +2.24% | +56.00 | 2,557.00 |
| 3 |  |
Crh Plc | +1.90% | +110.00 | 5,910.00 |
| 4 |  |
Kingfisher Plc | +1.89% | +4.90 | 264.50 |
| 5 |  |
Intercontinental Hotels Group Plc | +1.60% | +130.00 | 8,232.00 |
| 6 |  |
Rentokil Initial Plc | +1.48% | +6.90 | 472.50 |
| 7 |  |
Antofagasta Plc | +1.42% | +31.00 | 2,210.00 |
| 8 |  |
Ocado Group Plc | +1.39% | +4.80 | 350.70 |
| 9 |  |
Smith & Nephew Plc | +1.37% | +14.50 | 1,076.50 |
| 10 |  |
Halma Plc | +1.32% | +35.00 | 2,677.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp Plc | -3.51% | -16.65 | 458.00 |
| 2 |  |
Hiscox Ltd | -3.24% | -41.00 | 1,226.00 |
| 3 |  |
Marks And Spencer Group Plc | -1.04% | -3.10 | 294.00 |
| 4 |  |
Associated British Foods Plc | -0.88% | -22.00 | 2,482.00 |
| 5 |  |
Burberry Group Plc | -0.62% | -5.60 | 892.60 |
| 6 |  |
Persimmon Plc | -0.58% | -8.50 | 1,462.50 |
| 7 |  |
Taylor Wimpey Plc | -0.55% | -0.85 | 153.55 |
| 8 |  |
Barclays Plc | -0.54% | -1.20 | 220.85 |
| 9 |  |
Next Plc | -0.44% | -40.00 | 8,970.00 |
| 10 |  |
Melrose Industries Plc | -0.34% | -2.00 | 580.40 |
US close: Stocks mixed as traders await CPI reading, Q2 earnings
Wall Street stocks turned in a mixed performance on Monday as investors prepared for the beginning of Q2 corporate earnings season later in the week.
At the close, the Dow Jones Industrial Average was down 0.08% at 39,344.79, while the S&P 500 advanced 0.10% to 5,572.85 and the Nasdaq Composite saw out the session 0.28% firmer at 18,403.74.
The Dow closed 31.08 points lower on Monday, taking a bite out of gains recorded in the previous session.
Market participants were patiently awaiting the release of earnings from a number of major US banks later in the week, as well as quarterly numbers from the likes of PepsiCo and Delta Air Lines.
June’s consumer price index, slated for release on Thursday, will also draw much investor attention, as will last month’s producer price index on Friday.
On the macro front for Monday, May consumer credit change figures will be published at 2000 BST.
In the corporate space, Morphic shares traded sharply higher after pharmaceutical giant Eli Lilly agreed to acquire the firm in a deal that values the farm at roughly $3.2bn, while Paramount Global stock was on the ascent after it reached a deal to merge with Skydance Media.
Tuesday newspaper round-up: Meta, EDF, Tesla
Meta has claimed news is not the antidote to misinformation and disinformation spreading on Facebook and Instagram, as the company continues to push back against being forced to pay media companies for news in Australia. Meta announced in March it would not enter into new agreements with media companies to pay for news following the end of contracts signed in 2021 under the Morrison government’s news media bargaining code. – Guardian
At the World AI Conference in Shanghai last week, one of China’s leading artificial intelligence companies, SenseTime, unveiled its latest model, SenseNova 5.5. The model showed off its ability to identify and describe a stuffed toy puppy (wearing a SenseTime cap), offered feedback on a drawing of a rabbit, and instantly read and summarised a page of text. According to SenseTime, SenseNova 5.5 is comparable with GPT-4o, the flagship artificial intelligence model of the Microsoft-backed US company OpenAI. – Guardian
Sir Keir Starmer’s choice of a leading advocate of HS2 as rail minister has stoked industry hopes that scrapped parts of the project may be revived. While the primary task facing Lord Hendy, whose appointment was announced on Monday, will be to oversee Labour’s renationalisation of train operators, he’s also likely to prove a strong advocate for expanding the network. Lord Hendy, who previously worked closely with Boris Johnson and sat as a crossbench peer, last year criticised Rishi Sunak’s decision to halt HS2 at Birmingham, choosing to speak out despite his position as chairman of the state-owned track operator Network Rail. – Telegraph
French state energy giant EDF has pulled out of the competition to build mini-nuclear reactors in Britain, as it takes its blueprints back to the drawing board. The company had been vying with five others to win government support for its small modular reactor (SMR) design, with two winners set to be chosen by the end of the year. But with submissions for the latest stage of the competition due at 4pm on Monday, it is understood that EDF put forward no design and has effectively now withdrawn from the running. – Telegraph
A Tesla shareholder is calling for more than $7 billion in lawyers’ fees to be paid by the electric car maker, after he successfully challenged Elon Musk’s record-breaking pay package. Richard Tornetta, who owned nine shares in Tesla when he sued over Musk’s pay package in 2018, is pursuing the legal fee on behalf of three law firms that represented him in a battle he ultimately won in January when Musk’s $56 billion package was voided by a judge in Delaware. – The Times
The German state has begun auctioning off confiscated bitcoin worth €2.5 billion in a sale that may have contributed to a recent slump in the cryptocurrency’s value. Authorities impounded a digital wallet containing nearly 50,000 bitcoin from the owners of Movie2k, the now-defunct film piracy website, in January. It is thought to have been the largest seizure of its kind in Germany. – The Times
