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London open: Stocks flat ahead of US PPI; Burberry surges
London stocks were steady in early trade on Thursday as investors sifted through a raft of corporate news and looked ahead to another US inflation reading.
At 0905 GMT, the FTSE 100 was flat at 8,029.02.
On the macro front, the US producer price index for October is due for release at 1330 GMT.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “The figures are expected to point at an uptick in factory-gate prices in October. The headline PPI is seen rebounding from 1.8% to 2.3% in October, and core PPI from 2.8% to 3%. And don’t forget that there are components in these figures that feed into the Fed’s PCE index.
“Therefore, even if these numbers are in line with expectations, they should be warning that a 25bp cut from the Fed is probably not the right thing to do. I am not saying that the Fed won’t do it. I am just saying that it’s probably not the right thing to do.”
Market participants were also looking ahead to the release of third-quarter UK GDP data on Friday.
In equity markets, Spirax was a high riser as it left its full-year outlook unchanged after increasing organic sales across all three of its businesses in the third quarter, but warned of a slight impact on results from currency movements.ac
B&M European Value Retail also gained as it reiterated its full-year outlook after half-year sales ticked higher.
Aviva rose as it hailed a “very strong” performance in the third quarter, with double-digit gains in general insurance premiums, life insurance and retirement sales, and wealth net flows.
3i Group pushed higher as it highlighted a “good” financial performance in the first half, with a total return of £2.05bn, or 10% on opening shareholders’ funds.
Burberry surged as the luxury goods brand suspended its dividend and launched a strategic review of the business in an “urgent” effort to turnaround its struggling fortunes after slumping to a £80m half-year loss.
The company said “Burberry forward” would focus on “reconnecting our brand with its original purpose and leveraging our strengths…to attract a broad base of luxury customers”.
The loss compares with a £223m profit a year earlier. Revenues plunged 22% to £1.08bn.
Burberry said with the key Christmas period ahead and an uncertain macroeconomic environment it was “too early to determine whether our second-half results will fully offset the first-half adjusted operating loss”.
Mr Kipling owner Premier Foods advanced as it reported higher first-half revenues and profits as easing inflation allowed consumers to “treat themselves more” to its range of products.
On the downside, WH Smith fell even as the retailer reported a jump in full-year profit and revenue, hailing a particularly strong performance from the UK travel business and over the summer.
Lancashire Holdings, Sainsbury’s and Bunzl were all in the red as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aviva Plc | +4.02% | +18.30 | 473.00 |
| 2 |  |
3i Group Plc | +3.60% | +120.00 | 3,450.00 |
| 3 |  |
Bp Plc | +1.96% | +7.25 | 377.30 |
| 4 |  |
Informa Plc | +1.93% | +16.00 | 843.00 |
| 5 |  |
Centrica Plc | +1.69% | +2.00 | 120.50 |
| 6 |  |
International Consolidated Airlines Group S.a. | +1.61% | +3.80 | 240.10 |
| 7 |  |
Wpp Plc | +1.14% | +9.40 | 831.60 |
| 8 |  |
Smurfit Westrock Plc | +1.13% | +45.00 | 4,024.00 |
| 9 |  |
Pershing Square Holdings Ltd | +1.00% | +36.00 | 3,636.00 |
| 10 |  |
Woodside Energy Group Ltd | +1.00% | +12.00 | 1,216.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sainsbury (j) Plc | -1.97% | -4.80 | 238.40 |
| 2 |  |
Experian Plc | -1.67% | -63.00 | 3,702.00 |
| 3 |  |
South32 Limited | -1.33% | -2.40 | 178.00 |
| 4 |  |
Glencore Plc | -1.24% | -4.65 | 371.85 |
| 5 |  |
Anglo American Plc | -1.23% | -27.50 | 2,204.50 |
| 6 |  |
Coca-cola Hbc Ag | -1.14% | -32.00 | 2,768.00 |
| 7 |  |
Smith (ds) Plc | -0.98% | -5.50 | 557.00 |
| 8 |  |
Bunzl Plc | -0.87% | -30.00 | 3,426.00 |
| 9 |  |
Rolls-royce Holdings Plc | -0.79% | -4.40 | 553.20 |
| 10 |  |
Bhp Group Limited | -0.78% | -16.00 | 2,042.00 |
US close: Stocks mixed following October CPI reading
Wall Street stocks delivered a mixed performance on Wednesday as market participants digested fresh inflation data.
At the close, the Dow Jones Industrial Average was up 0.11% at 43,958.19, while the S&P 500 advanced 0.02% to 5,985.38 and the Nasdaq Composite saw out the session 0.26% softer at 19,230.73.
The Dow closed 47.21 points higher on Wednesday, doing little to reclaim losses recorded in the previous session as major indices took a break from their recent post-election rally.
Wednesday’s primary focus was news that the US consumer price index increased to 315.66 points in October, according to the Bureau of Labor Statistics, up from 315.30 points in September. The reading will likely play a big part in influencing the Federal Reserve’s monetary policy decisions going forward.
On a monthly basis, CPI rose by 0.2%, in line with both the previous three months and analysts’ expectations, while the annual inflation rate increased to 2.6% in October, up from 2.4% in September. Core inflation, which strips out volatile food and energy prices, was up 3.3% on an annualised basis and 0.3% on a monthly basis.
Elsewhere on the macro front, US mortgage applications rose 0.5% in the week ended 8 November, according to the Mortgage Bankers Association of America, in line with the 72 basis point surge in benchmark interest rates since the beginning of Q4. Applications to refinance a mortgage fell 2% week-on-week, while purchase applications rose 2%.
In the corporate space, Spotify shares traded higher despite posting quarterly numbers that fell short of Wall Street expectations on both the top and bottom lines.
Thursday newspaper round-up: Homebase, P&O Ferries, Boohoo
The struggling DIY chain Homebase has collapsed into administration, leaving thousands of workers facing an uncertain future, despite the purchase of the bulk of its stores by the owner of The Range homeware retailer. Gavin Park, Gavin Maher and Adele Macleod from the financial advisory firm Teneo were appointed as joint administrators of Homebase’s owners, HHGL Limited and Hampden Group Limited. – Guardian
P&O Ferries spent more than £47m on sacking hundreds of UK seafarers in 2022, according to its long overdue accounts that will be published in the coming days. The filings, which the Guardian has seen, confirm the financial cost of the company’s actions two and a half years ago when it outraged the public and parliament by dismissing 786 mainly British ferry workers – and then largely replacing them with low-cost agency staff from countries including India, the Philippines and Malaysia. – Guardian
Boohoo has urged shareholders to reject Mike Ashley’s attempts to take control of the fashion brand, claiming the Sports Direct billionaire could have “ulterior motives” in his approach. The fast fashion company has written to investors calling for them to vote against demands being made by its largest shareholder Frasers, which is seeking to add its founder Mr Ashley to the Boohoo board, along with Mike Lennon, its restructuring expert. – Telegraph
Consumer group Which? has launched a £3 billion claim against Apple, claiming the tech giant has breached competition law by “forcing its iCloud services on customers”. It says Apple has encouraged users to sign up to iCloud to store photos, videos and other data and is therefore favouring its own products, while simultaneously making it difficult to use alternative providers, ultimately stifling competition. – The Times
An independent interest rate setter at the Bank of England who has consistently favoured restrictive monetary policy said on Wednesday that she is prepared to “move big” on cutting interest rates once it is clear inflation has stabilised. Catherine Mann, an external member of the monetary policy committee (MPC), said that “when I have evidence that there has been a removal or sufficient moderation of inflation persistence, then I will move at a bigger step”. – The Times
