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ADVFN Morning London Market Report: Monday 27 June 2022

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London open: FTSE in the black as miners rally

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London stocks rose in early trade on Monday, with miners pacing the advance as sentiment was boosted by a further easing of Covid restrictions in Beijing and Shanghai, and as investors scaled back Federal Reserve rate hike expectations.

At 0835 BST, the FTSE 100 was up 0.6% at 7,249.51.

Richard Hunter, head of markets at Interactive Investor, said: “The more recent relief in sentiment has resulted in a number of factors suggesting that an inflection point may have been reached.

“On the one hand, the recent slide in commodity prices – such as copper having fallen some 25% from its recent peak in March – has eased some inflationary concerns, while oil has also reigned in gains despite the obvious current demand/supply imbalance.

“In addition, there are occasions when bad news can be good news. A record low in US consumer confidence level raised hopes that the Federal Reserve may begin to consider a lighter touch in its approach to tightening after the likely July hike. It also raised the possibility that the so-called ‘terminal rate’ may be approaching, with the current consensus being that rates will reach 3.5% by March, down from a previous estimate of 4%.

“With the larger US banks receiving a boost after having comfortably passed the latest set of stress tests and with the possibility of another spike in prices generally as the quarter-end rebalancing comes into focus, there could be room for manoeuvre in terms of further gains.

“Even so, investors will need further evidence that the current stabilisation reflects the market having found a bottom, as opposed to simply being oversold, and the main indices still remain sharply lower.”

In equity markets, miners were the standout gainers, with Rio TintoGlencoreAntofagasta and Anglo American all sharply higher.

Elsewhere, consumer goods and healthcare company PZ Cussons rose after saying it expected annual group revenue of around £590m with like-for-like growth of 3%. The maker of Imperial Leather soap said growth was driven by price/mix as it maintained full-year profits guidance.

Cruise operator Carnival continued to advance following a well-received second-quarter update at the end of last week.

On the downside, online supermarket Ocado was knocked lower by a downgrade to ‘neutral’ at Credit Suisse.

Biffa was also in the red as it delayed the release of its full-year results after auditor Deloitte requested additional time to complete audit procedures in relation to the company’s ongoing landfill tax enquiry.

 

Top 10 FTSE 100 Risers

# Name Change Pct Change Cur Price
1 Carnival Plc +4.15% +31.40 788.20
2 Tui Ag +3.84% +5.60 151.55
3 Bhp Group Limited +3.34% +76.00 2,351.50
4 Scottish Mortgage Investment Trust Plc +3.03% +22.20 755.20
5 Rolls-royce Holdings Plc +2.92% +2.36 83.30
6 Glencore Plc +2.81% +12.55 458.80
7 Rio Tinto Plc +2.71% +135.00 5,114.00
8 Anglo American Plc +2.66% +81.50 3,147.50
9 Antofagasta Plc +2.32% +27.50 1,212.00
10 Centrica Plc +2.29% +1.86 83.02

 

Top 10 FTSE 100 Fallers

# Name Change Pct Change Cur Price
1 Ocado Group Plc -1.36% -11.80 858.80
2 Hsbc Holdings Plc -0.93% -5.00 532.30
3 Auto Trader Group Plc -0.69% -3.80 546.20
4 Bt Group Plc -0.66% -1.25 187.25
5 Lloyds Banking Group Plc -0.29% -0.12 43.27
6 Crh Plc -0.25% -7.00 2,839.00
7 Aviva Plc -0.22% -0.90 410.60
8 Coca-cola Hbc Ag -0.06% -1.00 1,814.00
9 Nmc Health Plc -0.00% -0.00 938.40
10 Just Eat Plc -0.00% -0.00 861.00

 

Monday newspaper round-up: Sainsbury’s, manufacturing, inflation

The Queen’s bank, Coutts & Co, and the Coal Pensions Board have joined a group of investors backing a resolution calling for Sainsbury’s to pay the independently set living wage for all staff and contracted workers. The vote at the UK’s second-largest supermarket’s annual shareholder meeting on 7 July will be the first on a resolution committing a UK company board to pay the living wage. ShareAction, the responsible investment campaign group, said the resolution would be a “litmus test for investors’ social commitments amid the cost-of-living crisis”. – Guardian

Britain’s army of more than a million small and medium-sized businesses are stockpiling raw materials and ordering components six months ahead to overcome supply shortages that prevent them from meeting customer demands. With construction costs reaching fresh record highs and import prices surging following a fall in the pound, businesses reported that much of their cash was tied up in securing the basic raw materials and components needed to supply customers. – Guardian

The world is on the “tipping point” of falling into a period of runaway inflation in which soaring prices become embedded and difficult to control, the Bank for International Settlements (BIS) has warned. In its annual economic report, the BIS said leading economies faced entering a world in which soaring prices become embedded and difficult to control. – Telegraph

Britain’s biggest microchip factory is likely to be closed and production shifted to Shanghai if ministers allow a Chinese takeover of the business to go ahead, a report has warned. Researchers at the Policy Exchange think tank claimed there was a “strong possibility” that Newport Wafer Fab’s new owner, Nexperia, will in future seek to move the company’s facilities out of South Wales. – Telegraph

By the time the City regulator introduced new rules for the once promising peer-to-peer lending sector in late 2019, the game was all but up. Platforms with a quarter of a billion pounds in active loans collapsed in chaotic fashion, while many remaining players were in the process of leaving the market or were soon to do so. – The Times

 

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