ADVFN Morning London Market Report: Tuesday 26 October 2021

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London open: Stocks gain after Wall Street records


London stocks rose in early trade on Tuesday after a solid session on Wall Street, which saw the Dow and S&P 500 hit record highs, and following well-received results from the likes of Reckitt Benckiser and Whitbread.

At 0835 BST, the FTSE 100 was up 0.3% at 7,240.92.

CMC Markets analyst Michael Hewson said: “Once again, we’ve seen new record highs for the Dow and the S&P500, and while the Nasdaq is lagging behind, we still managed to see a strong finish there, with Tesla standing out, pushing above $1,000 a share, and in so doing becoming the latest US company to add another zero to its market cap with a valuation in excess of an eye watering $1trn.

Facebook also reported a mixed set of Q3 numbers, beating on profits, but missing slightly on revenues, while downgrading revenue guidance for Q4 to between $31.5bn to $34.5bn, from $34.8bn. The shares initially dipped after hours; however, the blow was softened by the announcement of a $50bn share buyback, with the shares rebounding strongly.”

In UK equity marketsReckitt Benckiser surged to the top of the FTSE 100 after it upgraded its 2021 revenue outlook as the consumer goods company reported a 3.3% increase in like-for-like net revenue to £3.28bn in the third quarter. The maker of Finish dishwasher tablets and Durex condoms said it expected annual like-for-like net revenue to increase by 1-3% – up from earlier guidance of 0-2%.

Premier Inn owner Whitbread was also trading up after it narrowed interim losses as sales rebounded ahead of expectations, with room revenues potentially hitting full recovery “at some point” in 2022 despite “challenging” supply chain issues and labour shortages.

Elsewhere, B&M European Value Retail was boosted upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

Bunzl advanced as the distribution and services group said third-quarter revenues rose, driven by a strong recovery in its core business.

Essentra gained after saying it was considering selling its filters business as a first step to becoming a pure-play components business and that its results were on track to meet full-year expectations.

On the downside, IT infrastructure and services provider Softcat slumped despite reporting record full-year results amid strong public sector demand and a recovery in the corporate sector.

Cybersecurity firm Darktrace was also under the cosh again having tumbled on Monday on the back of a Peel Hunt initiation at ‘sell’.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Easyjet Plc +2.90% +17.20 611.00
2 Barratt Developments Plc +1.86% +12.00 658.00
3 International Consolidated Airlines Group S.a. +1.80% +2.82 159.16
4 Taylor Wimpey Plc +1.74% +2.60 152.05
5 Auto Trader Group Plc +1.53% +9.20 609.80
6 Berkeley Group Holdings (the) Plc +1.50% +64.00 4,326.00
7 Associated British Foods Plc +1.48% +26.00 1,777.00
8 Smith (ds) Plc +1.48% +5.50 378.00
9 Crh Plc +1.47% +51.00 3,532.00
10 Persimmon Plc +1.33% +35.00 2,664.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Antofagasta Plc -1.01% -15.00 1,466.00
2 Ocado Group Plc -0.90% -16.50 1,810.50
3 Bae Systems Plc -0.80% -4.60 569.40
4 Glencore Plc -0.74% -2.75 369.15
5 Johnson Matthey Plc -0.52% -14.00 2,703.00
6 Bp Plc -0.47% -1.70 358.95
7 Bhp Group Plc -0.47% -9.40 1,986.60
8 Royal Dutch Shell Plc -0.41% -7.40 1,780.80
9 Royal Dutch Shell Plc -0.36% -6.40 1,769.40
10 Lloyds Banking Group Plc -0.35% -0.17 48.61


Europe open

European shares opened higher on Tuesday, boosted by record closes on Wall Street overnight and strong earnings from Facebook.

The pan-European Stoxx 600 was up 0.24% with all major regional bourses higher.

In equity news, shares UBS rose after the wealth manager posted a better-than-expected 9% increase in third quarter net profit.

Cleaning products maker Reckitt Benckiser Group jumped 5.8% after it raised its full-year forecast and beat estimates for third-quarter sales.

Computer peripherals maker Logitech International fell 3.1% after it confirmed full-year earnings outlook on the boom in working from home, but warned of supply-chain disruptions.

Softcat shares led the fallers, down more than 7%, despite reporting record full-year results on Tuesday amid strong public sector demand and a recovery in the corporate sector.

Swedish bearings manufacturer SKF fell 6% after missing third-quarter profit forecasts.


US close: Dow Jones registers another record close

Wall Street stocks closed higher on Monday as market participants prepped for a week full of big tech earnings.

At the close, the Dow Jones Industrial Average was up 0.18% at 35,741.15, while the S&P 500 was 0.47% firmer at 4,566.48 and the Nasdaq Composite saw out the session 0.90% stronger at 15,226.71.

The Dow closed 64.13 points higher on Monday, building on the index’s previous all-time registered on Friday.

In the corporate space, Burger King parent Restaurant Brands beat on earnings in its latest trading quarter but warned that labour challenges had weighed on sales, while consumer products business Kimberley-Clark quarterly figures fell short of expectations as supply chain issues impacted sales.

After the close, social media behemoth Facebook reported better-than-expected third-quarter earnings but revenues fell short of analysts’ estimates.

AlphabetMicrosoftAmazonCaterpillarCoca-ColaBoeingMcDonald’s and Apple will all post earnings this week.

Energy stocks also closed higher on Monday after West Texas Intermediate crude futures hit $85.0 per barrel, with Exxon Mobil and Diamondback Energy both rising.

On the macro front, the Chicago Federal Reserve‘s national activity index fell into negative territory in September, dropping to -0.13 last month from August’s print of 0.05, while the Dallas Fed manufacturing index improved to 14.6 in October, up from 6.8 in September, as expected.


Tuesday newspaper round-up: Haulage industry, William Hill, Facebook

The haulage industry has urged Boris Johnson to step up “lacklustre” efforts to tackle a shortage of 100,000 HGV drivers, telling him to act now on supply chains or face a Christmas crisis. Bosses of multiple trade bodies and businesses in the trucking and food industries have written to the prime minister saying not enough had been done to resolve the crisis and urging him to intervene personally. – Guardian

William Hill has been accused of deploying “cynical” tactics to keep people gambling after the bookmaker launched an in-store cafe selling hot food, with some items cheaper than at McDonald’s. At one branch of the bookmaker in the Arndale shopping centre in central Manchester signage advertised a “WH Cafe”, selling meal deals, burgers and breakfast. – Guardian

Facebook has warned that its growth will slow down dramatically in the coming months amid iPhone privacy changes, a further blow to the embattled social network as it wrestles with a whistleblower scandal. The social media giant said revenues had grown by 35pc in the third quarter of the year to $29bn (£21bn), a marked slowdown on the 56pc growth in the previous three months. – Telegraph

Policymakers should wait to judge the impact of the end of the furlough scheme before raising interest rates, a ratesetter at the Bank of England said. Silvana Tenreyro, an external member of the monetary policy committee, said that policymakers should assess official data showing how well the labour market coped after the coronavirus job retention scheme closed at the end of September. – The Times

A cryptocurrency company is to buy the Gibraltar Stock Exchange, which will enable investors to buy crypto, debt and equities on the same bourse. Valereum Blockchain, which aims to link fiat currencies — government-issued money not backed by a commodity, such as sterling or US dollar — to cryptocurrencies, has signed an option to buy 80 per cent of the exchange. – The Times


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