ADVFN Morning London Market Report: Monday 25 October 2021

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London open: Stocks in the black as miners rally; HSBC in focus


London stocks rose in early trade on Monday, with miners pacing the gains amid rising metals prices, ahead of a week packed full of corporate news and the Autumn Budget.

At 0840 BST, the FTSE 100 was up 0.3% at 7,227.46.

Sentiment got a boost as shares of embattled Chinese firm Evergrande rallied after its chairman signalled that it would be concentrating on its growing electric vehicles unit going forward, rather than the troubled property business.

Naeem Aslam, chief market analyst at Ava Trade, said: “This week, stock traders will be looking closely at the Nasdaq index as technology giants such as MicrosoftFacebook, and Alphabet are scheduled to release their earnings reports over the next few days.

“Growth stocks have been performing relatively better, with the energy sector gaining nearly 11% in October. Similarly, share prices of other growth sectors like manufacturing, construction, and financials have also jumped more than 7% in October. The rise in these sectors indicates that worries about supply chain bottlenecks are starting to wind down.”

In equity markets, miners were the standout gainers as copper prices rose, with AntofagastaBHPRioGlencore and Anglo American all higher.

HSBC nudged up after it reported bumper third-quarter profits that smashed expectations and unveiled plans for a share buyback of up to $2bn. The bank’s reported pre-tax profit for the third quarter jumped 75.8% year on year to $5.4 billion, well beyond the $3.776bn forecast by analysts in estimates compiled by the bank. Revenue rose 0.7% to $12bn, compared with an expected 3.1% rise.

HSBC also released around $700m in Covid-19 bad debt provision.

Online trading platform Plus500 pushed higher after it posted a dip in third-quarter earnings but said full-year revenues and underlying earnings were set to be ahead of analysts’ expectations after an “excellent performance” so far this year.

Elsewhere, Weir Group was boosted by an upgrade to ‘outperform’ from ‘neutral’ at Exane.

On the downside, Darktrace was under the cosh after an initiation at ‘sell’ by Peel Hunt.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Rio Tinto Plc +1.71% +80.00 4,752.50
2 Bhp Group Plc +1.71% +33.20 1,974.20
3 Bp Plc +1.54% +5.45 360.45
4 Micro Focus International Plc +1.46% +5.30 367.40
5 Glencore Plc +1.38% +5.05 372.05
6 Barclays Plc +1.33% +2.64 201.50
7 Royal Dutch Shell Plc +1.25% +21.80 1,771.00
8 Royal Dutch Shell Plc +1.22% +21.60 1,789.20
9 Marks And Spencer Group Plc +1.10% +1.95 179.90
10 Antofagasta Plc +1.08% +15.50 1,453.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Smiths Group Plc -1.12% -16.00 1,406.50
2 United Utilities Group Plc -1.00% -10.00 992.00
3 Smith & Nephew Plc -0.89% -11.50 1,281.50
4 Mondi Plc -0.89% -16.00 1,784.00
5 Ocado Group Plc -0.85% -15.50 1,801.00
6 Wpp Plc -0.80% -7.60 945.80
7 Informa Plc -0.77% -4.00 514.80
8 Burberry Group Plc -0.74% -14.00 1,882.00
9 Pearson Plc -0.73% -4.60 623.20
10 Bae Systems Plc -0.71% -4.20 585.40


Europe open: Shares flat; Exor gains on Covea talks report

European shares were flat at the opening on Monday as investors sat on the sidelines ahead of another raft of big corporate earnings reports.

The pan-European Stoxx followed a similar session in Asia, where markets made small advances. Eyes will be on results from the likes of Facebook later today and Lloyds Bank and German peer Deutsche Bank during the week.

Oil and copper prices rose, giving miners a lift, while in other equity news, Anglo-Asia bank HSBC gained after third quarter profits rose 74% and a $2bn was unveiled.

Shares in Exor, the Italian holding company of the Agnelli family, rose to the top of the Stoxx, on reports it had entered new talks with French mutual insurer Covea over reinsurer PartnerRe after discussions over a potential $9bn deal were called off last year.

Shares in TSB owner Banco Sabadell rose after it confirmed it had rejected a bid approach from the Co-op for the British banking chain.

UniCredit fell 3.6% after the Italian government and the bank ended talks over the sale of troubled Tuscan bank Monte dei Paschi di Siena, hitting attempts to return the bank to private hands.


US close: jobless claims surprise sees stocks finish higher

Wall Street stocks were mixed early on Thursday as weekly jobless claims surprised to the upside.

At the close, the Dow Jones Industrial Average was down 0.02% at 35,603.08, while the S&P 500 was up 0.3% at 4,549.78. and the Nasdaq Composite was ahead 0.62% at 15,215.70.

The Dow closed 6.26 points lower on Thursday, taking a small bite out of gains recorded in the previous session when the blue-chip index closed just shy of its all-time high.

Thursday’s primary focus, as always, was this week’s US jobless claims report from the Labor Department, which revealed that jobless claims had continued moving lower in the seven days ended 16 October.

According to the Department of Labor, initial weekly jobless claims fell by 6,000 to 290,000, defying forecasts for a rise to 300,000.

The four-week moving average for initial claims dropped by 15,250 to hit 319,750, its lowest level since 14 March 2020, while secondary claims slipped 122,000 to 2.481m.

Also drawing an amount of attention was news that the Food and Drug Administration had signed off on booster shots of both Johnson & Johnson and Moderna’s Covid-19 vaccines as it approved “mixing and matching” vaccines.

Elsewhere on the macro front, manufacturing conditions in the Philadelphia region deteriorated a little more than expected in October as the Philadelphia Federal Reserve’s current manufacturing index declined to 23.8 from 30.7 in September, missing expectations for a reading of 25.0.

The index for new orders rose from 15.9 to 30.8, while the shipments index printed at 30.0 in October, little changed on 29.9 the month before.

The employment gauge, meanwhile, rose to 30.7 from 26.3.

Still on data, existing homes sales surged to an eight-month high in September, up 7% to a seasonally adjusted rate of 6.29m, according to the National Association of Realtors.

The Conference Board’s leading index, meanwhile, rose just 0.2% to 117.5 in September, pointing to somewhat slower growth and suggesting the economy was growing at “more moderate” trajectory than it did in the first half.

In the corporate space, AT&T was down 0.08% beat expectations for third-quarter earnings as the US communications conglomerate posted adjusted earnings per share of $0.87, up from $0.76 a year earlier and well ahead of analysts’ average estimate of $0.78.


Monday newspaper round-up: Overseas investment, Tesco, Vectura

The government is to launch a £1.4bn fund to attract more overseas investment into the UK economy, particularly in sectors such as life sciences and electric vehicle production. In his budget announcement on Wednesday, the chancellor, Rishi Sunak, will also announce plans to lure highly skilled foreign workers and amend regulations to make it easier for international companies to relocate to the UK. – Guardian

The majority of UK employers are planning to hire staff over the next 12 months, the highest recruitment intentions in eight years, as Brexit and the Covid-19 pandemic have caused acute shortages of workers in sectors ranging from haulage to hospitality and social care. 80% of businesses and other organisations are planning to take on more staff over the next 12 months, according to a survey by the recruitment firm Hays. Recruitment intentions are particularly high in Scotland and Wales where 88% plan to hire over the next 12 months, followed by 87% in the East of England and 85% in London. – Guardian

Tesco has been targeted by hackers, crashing its website and app and causing frustration for thousands of customers. The hack, one of the worst cyber attacks to date on a British supermarket, poses a “serious problem” for Tesco’s reputation and is estimated to be costing £20m a day in lost revenue. – Telegraph

Rail operators are scrapping printed timetables as part of a multi million-pound cost cutting exercise, sparking claims that passengers’ personal safety is being put at risk. Pocket and poster timetables are in the process of being withdrawn and replaced with QR codes, sparking fears that elderly people without smartphones could be forced off the railways or left stranded at stations. – Telegraph

Concerns have increased that Philip Morris International will use its £1 billion takeover of Vectura to legitimise the tobacco industry’s participation in public health after its chief executive was accused of lobbying the government over the deal. Jacek Olczak wrote to Kwasi Kwarteng, the business secretary, on the day Philip Morris unveiled its surprise 165p-a-share cash offer for the respiratory drugs company in July, seeking a meeting to “talk more about our plans for PMI and Vectura’s operation in the UK”. – The Times

The Treasury may unveil a boost for the City this week by signalling that regulators must put competition on the same footing as safety and soundness when making key decisions. The move is expected in the budget alongside a cut in the surcharge tax on banks’ profits aimed at bringing the sector more into line with other industries and after a rapprochement between the government and financial services firms. – The Times


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