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London open: Stocks dip; Vistry tumbles on profit warning
London stocks dipped in early trade on Friday at the end of an eventful week, as investors mulled rate cuts by the Bank of England and the Federal Reserve.
At 0840 GMT, the FTSE 100 was down 0.1% at 8,134.88.
On Thursday, both the BoE and the Fed cut interest rates by 25 basis points, as expected.
Richard Hunter, head of markets at Interactive Investor, said: “UK markets have struggled to hold on to the initial gains following the US election result, weighed in part by the prospects of tariffs from the new President which could crimp trade and potentially add to the inflationary mix at a time when the situation is increasingly under control.
“This has tended to offset the theoretical tailwinds of a weaker pound and the large exposure of many FTSE 100 constituents to the fortunes of the US economy, although the primary index has managed a gain of 5.2% so far this year.”
On the corporate front, Vistry tumbled as the housebuilder warned on full-year profits again, cutting its forecast for completions and pointing to the impact from issues in the South Division.
The housebuilder now expects FY24 adjusted pre-tax profit of around £300m, down from a forecast of £300m last month.
The company already warned on profits in October, saying it was expecting FY24 profit to be £80m lower, FY25 profit to be around £30m lower and profit for FY25 to be hit by £5m.
It said at the time that this was because it had underestimated build costs on nine schemes in its Southern Division.
Serco also suffered heavy losses as the outsourcer said it had not been reselected for its long-running Australian immigration detention centres contract, and estimated that changes to employer national insurance contributions will increase labour costs by £20m a year.
Miners were also under the cosh, with Anglo American, Antofagasta, Glencore and Rio all down as copper and iron ore prices fell.
On the upside, BA and Iberia owner IAG flew to the top of the FTSE 100 as it posted a 15% jump in third-quarter operating profit to €2.01bn and a 7.9% increase in revenue, and announced a €350m share buyback.
EasyJet and Wizz Air also gained.
TI Fluid Systems advanced after saying that the deadline by which ABC Technologies must make a firm offer for the company has been extended in order to allow the group to finalise its remaining confirmatory due diligence and financing.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
International Consolidated Airlines Group S.a. | +6.35% | +13.90 | 232.70 |
| 2 |  |
Ck Infrastructure Holdings Limited | +2.33% | +12.80 | 563.00 |
| 3 |  |
Astrazeneca Plc | +2.02% | +196.00 | 9,921.00 |
| 4 |  |
Intercontinental Hotels Group Plc | +1.51% | +136.00 | 9,144.00 |
| 5 |  |
Relx Plc | +1.48% | +54.00 | 3,693.00 |
| 6 |  |
Pearson Plc | +1.14% | +13.50 | 1,195.50 |
| 7 |  |
Diploma Plc | +1.03% | +46.00 | 4,492.00 |
| 8 |  |
Intertek Group Plc | +0.88% | +40.00 | 4,578.00 |
| 9 |  |
Sage Group Plc | +0.87% | +9.00 | 1,041.50 |
| 10 |  |
Severn Trent Plc | +0.77% | +20.00 | 2,626.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Marks And Spencer Group Plc | -3.20% | -12.60 | 380.60 |
| 2 |  |
Sainsbury (j) Plc | -3.19% | -8.20 | 248.60 |
| 3 |  |
Rio Tinto Plc | -3.10% | -161.00 | 5,040.00 |
| 4 |  |
Antofagasta Plc | -3.04% | -55.00 | 1,753.50 |
| 5 |  |
Anglo American Plc | -2.58% | -64.00 | 2,415.00 |
| 6 |  |
Bhp Group Limited | -2.43% | -54.00 | 2,168.00 |
| 7 |  |
South32 Limited | -2.36% | -4.70 | 194.10 |
| 8 |  |
Tesco Plc | -2.35% | -8.20 | 340.30 |
| 9 |  |
Bp 9% 2nd Prf | -2.19% | -3.50 | 156.50 |
| 10 |  |
Prudential Plc | -2.11% | -14.20 | 657.40 |
US close: Dow Jones flat following post-election rally
Major indices delivered a mixed performance on Thursday as market participants digested former president Donald Trump’s re-election victory and the latest interest rate decision from the Federal Reserve.
At the close, the Dow Jones Industrial Average was flat at 43,729.34, while the S&P 500 advanced 0.74% to 5,973.10 and the Nasdaq Composite saw out the session 1.51% firmer at 19,269.46.
The Dow closed 0.59 points lower on Thursday after registering its biggest post-election rally for more than a century in the previous session.
Besides the Republican Party’s White House victory, Thursday’s primary focus was news that rate-setters had decided to ease monetary policy by a further 25 basis points, as expected. Nonetheless, they shied away from providing more forward guidance until the new US administration’s policies were known and could be modelled. On this occasion, the Federal Open Market Committee‘s policy statement no longer stated that policymakers had gained more confidence that inflation was falling back towards 2% sustainably.
However, in his post-meeting press conference Fed boss Jerome Powell said the omission was not a signal. Instead, Powell said that to have reiterated that phrase would have constituted fresh forward guidance when it was more prudent not to provide it.
Elsewhere on the macro front, Americans lined up for unemployment benefits at an accelerated pace in the week ended 2 November, according to the Department of Labor. Initial jobless claims rose by 3,000 week-on-week to 221,000, in line with market expectations and continuing to point to a certain degree of resilience in the US labour market.
On another note, a preliminary reading of non-farm business sector labour productivity rose by 2.2% in Q3, according to the Bureau of Labor Statistics, following a downwardly revised 2.1% increase in Q2 and short of estimates of 2.3%.
Finally, US wholesale inventories fell by 0.2% month-on-month in September to $903.7bn, according to the Census Bureau, compared to a preliminary estimate of a 0.1% drop and following a 0.2% rise in August.
In the corporate space, Warner Brothers Discovery fell short of revenue estimates as a result of weakness in its studio unit, while Moderna posted a surprise profit on the back of solid Covid vaccine sales and the benefits of recent cost-cutting efforts, and doughnut maker Krispy Kreme dropped on the back of an earnings miss.
Friday newspaper round-up: AI, Bentley, News Corp
Dozens of health and children’s groups have urged ministers to tackle obesity by imposing taxes on foods containing too much salt or sugar. New levies based on the sugar tax on soft drinks would make it easier for consumers to eat more healthily by forcing food manufacturers to reformulate their products, they claim. – Guardian
Artificial intelligence could displace between 1m and 3m private sector jobs in the UK, though the ultimate rise in unemployment will be in the low hundreds of thousands as growth in the technology also creates new roles, according to Tony Blair’s thinktank. Between 60,000 and 275,000 jobs will be displaced every year over a couple of decades at the peak of the disruption, estimates from the Tony Blair Institute (TBI) suggest. – Guardian
Bentley has pushed back plans to go fully electric by five years as driver uptake of battery-powered cars continues to fall short of the industry’s hopes. In an announcement on Thursday, bosses confirmed that the British marque will switch to an all-electric lineup by 2035 instead of 2030. It comes months after Bentley delayed the launch of its first electric vehicle (EV) from 2025 to 2026. Originally envisaged as a grand tourer, it will also be a “luxury urban SUV”, the company said. – Telegraph
A host of Britain’s best-known businesses have warned that jobs could be cut, hiring scaled back and prices pushed up as they absorb hundreds of millions of pounds in extra costs imposed on employers in Rachel Reeves’s autumn budget. Allison Kirkby, the chief executive of BT, said customers could be charged more for services as the telecoms group looked to offset a £100 million hit from rising national insurance contributions in the next fiscal year. – The Times
News Corporation beat estimates for first-quarter revenue on Thursday, driven by growth in its digital real estate services, book publishing and Dow Jones segments. The media and information services group, which owns publications including The Times, The Sunday Times and The Wall Street Journal, reported revenues of $2.58 billion in the three months to the end of September, compared with $2.57 billion estimated by analysts and up 3 per cent from $2.5 billion in the previous year’s first quarter. – The Times
