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London open: Stocks edge up as BP, HSBC report; Budget eyed
London stocks edged higher in early trade on Tuesday as investors digested results from the likes of HSBC and BP and looked ahead to the Budget.
At 0830 GMT, the FTSE 100 was up 0.2% at 8,299.70.
Data released earlier by the British Retail Consortium showed that shop price deflation accelerated in October, with the BRC urging the chancellor to take action to keep prices low.
Prices at UK tills were 0.8% lower than 12 months ago, compared with a 0.6% year-on-year fall in September, according to the BRC/NielsenIQ Shop Price Index for October.
This was the third straight month of annual deflation and lowest rate of change since August 2021.
Non-food prices fell by 2.1%, unchanged from the previous month, while food prices grew by 1.9%, down from 2.3% previously, with fresh food inflation in particular slowing to 1.0% from 1.5%.
The BRC said that food inflation eased as retailers stepped up their seasonal deals, while non-food items like electrical and DIY products were priced lower as retailers capitalised on the recent pick-up in the housing market.
“Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation,” said BRC chief executive Helen Dickinson.
“Retail is already paying more than its fair share of taxes compared to other industries. The chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20% downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment.”
In equity markets, HSBC rallied as it announced another $3bn share buyback and posted better-than-expected third-quarter profits, underpinned by solid performances from the wealth and investment banking units.
In the three months to the end of September, pre-tax profit rose 10% on the same period a year earlier to $8.5bn, versus analysts’ expectations of $7.6bn.
HSBC said revenue increased 5% to $17bn, reflecting higher customer activity in its wealth products, supported by volatile market conditions.
Net interest income fell by $1.6bn to $7.6bn, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities.
HSBC announced a major overhaul last week, saying it would divide its business into eastern and western markets in order to simplify its structure.
Educational publisher Pearson gained as it reiterated its full-year outlook after an uptick in quarterly sales.
Updating on trading, the blue chip said sales rose 4% in the third quarter and by 2% in the year to date. Underlying sales growth, which strips out businesses under strategic review, was 5% and 3% respectively over the two periods.
Driving the uplift was a 6% jump in sales in Pearson’s core assessment and qualifications division, and in workforce skills. Sales strengthened 4% in virtual learning and by 4% in higher education.
On the downside, BP fell as it reported a slide in quarterly profits, hit by weaker refining margins, although the decline was not as steep as feared.
Underlying replacement cost profit, a key measure for the oil and gas major, was $2.3bn in the third quarter. That was down on both the second quarter’s $2.8bn, and last year’s $3.3bn.
BP said the results reflected weaker refining margins, a weak oil trading result and lower liquids realisations, although they were partly offset by higher gas realisations.
Hargreaves Lansdown was little changed as it reported assets under administration of £157.3bn for the quarter ended 30 September, with growth driven by £1.5bn in positive market movements and £0.5bn in net new business.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hsbc Holdings Plc | +4.35% | +30.10 | 722.20 |
| 2 |  |
Pearson Plc | +3.31% | +35.50 | 1,107.00 |
| 3 |  |
Antofagasta Plc | +2.21% | +40.00 | 1,847.00 |
| 4 |  |
Prudential Plc | +2.21% | +14.40 | 666.40 |
| 5 |  |
Standard Chartered Plc | +2.19% | +19.00 | 884.80 |
| 6 |  |
Glencore Plc | +1.73% | +7.00 | 412.05 |
| 7 |  |
Bhp Group Limited | +1.23% | +27.00 | 2,218.00 |
| 8 |  |
Rio Tinto Plc | +1.08% | +55.00 | 5,132.00 |
| 9 |  |
Anglo American Plc | +0.99% | +24.50 | 2,487.50 |
| 10 |  |
Wpp Plc | +0.87% | +7.20 | 837.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | -3.41% | -16.60 | 470.00 |
| 2 |  |
Banco Santander S.a. | -2.22% | -8.50 | 375.00 |
| 3 |  |
Rolls-royce Holdings Plc | -1.71% | -9.60 | 550.80 |
| 4 |  |
Marks And Spencer Group Plc | -1.51% | -5.80 | 377.20 |
| 5 |  |
Jd Sports Fashion Plc | -1.50% | -2.00 | 131.00 |
| 6 |  |
Vodafone Group Plc | -1.24% | -0.92 | 72.98 |
| 7 |  |
International Consolidated Airlines Group S.a. | -1.16% | -2.50 | 212.80 |
| 8 |  |
Sainsbury (j) Plc | -1.03% | -2.80 | 269.60 |
| 9 |  |
Bp Plc | -1.01% | -4.05 | 395.05 |
| 10 |  |
Bt Group Plc | -0.95% | -1.35 | 141.45 |
US close: Dow Jones reverses Friday’s losses
Wall Street stocks were in the green at the close of trading on Monday as market participants prepared for a week jam-packed with Q3 earnings.
At the close, the Dow Jones Industrial Average was up 0.65% at 42,387.57, while the S&P 500 advanced 0.27% to 5,823.52 and the Nasdaq Composite saw out the session 0.26% firmer at 18,567.19.
The Dow closed 273.17 points higher on Monday, reversing losses recorded in the previous session as the blue-chip index snapped a six-week winning streak.
Earnings were set to be in focus this week as five of the so-called “Magnificent Seven” will report quarterly numbers before the week is out, with figures due from Alphabet, Microsoft, Meta Platforms, Amazon and Apple.
Both 5 November’s presidential election and news that weekend airstrikes by Israel against Iran had not targeted oil or nuclear facilities as initially feared also drew an amount of investor attention on Monday.
The yield on the benchmark 10-year Treasury note was also higher on Monday, up more than two basis points at 4.286%, while its two-year counterpart was over three basis points higher at 4.153%.
On the macro front, the Dallas Federal Reserve‘s manufacturing index rose to -3 in October, up from -9 in September, pointing to a mild contraction in the ongoing sequence of negative readings that started in May 2022. The production index shot up 18 points to +14.6, its highest reading in more than two years.
Tuesday newspaper round-up: Brexit border checks, Evri, UK bond sales
A lack of social mobility is costing the UK £19bn a year, a report produced by the cross-party thinktank Demos and the Co-op has found. The Social Mobility Commission, which advises the government, defines social mobility as “the link between a person’s occupation or income and the occupation or income of their parents”. – Guardian
New Brexit border checks are reducing consumer choice and compromising Britain’s food security, according to fresh produce sellers and plant growers. A joint letter from the Fresh Produce Consortium (FPC) and the Horticultural Trades Association (HTA) has called for an urgent meeting with the government over the continued problems their members face when importing plants and cut flowers under the current border system. – Guardian
Delivery giant Evri has been named the UK’s worst parcel distribution company for the second year running, with around one in two customers reporting a problem with its service. The courier, which rebranded from Hermes two years ago following a wave of parcel mishandling allegations, has been dogged by complaints over issues such as delays and parcels being left in the wrong place. – Telegraph
Ed Miliband has been urged to dispose of Britain’s nuclear waste by drilling boreholes up to five kilometres deep into the Earth’s crust. University academics said advances in tunnel-digging technology mean the previously-dismissed idea is viable and could be put into action more quickly and cheaply than alternatives. – Telegraph
The chief executive of one of the country’s biggest commercial property developers has said he would be investing “hundreds of millions and more” in building new data centres if he could secure the electricity supply that those sites demand. David Sleath, chief executive of Segro, the FTSE 100 developer and landlord, told Times Radio that, in some cases, his teams were waiting “a number of years” for local substations to be upgraded, increasing their grid capacity. If that capacity was available now, Segro, which already owns and operates 35 data centres around the UK, would already be building many more, he said. – The Times
Investment banks anticipate a jump in UK government debt sales this year to finance a rise in public investment. On average, global investment banks expect the value of gilt sales this year to reach nearly £300 billion, the second-highest total on record. The figures were compiled by the Financial Times based on an analysis of seven investment banks’ estimates. – The Times
