ADVFN Morning London Market Report: Monday 15 August 2022

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London open: Stocks rise but gains muted after China data disappoints

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London stocks were up in early trade on Monday but gains were muted as investors mulled disappointing Chinese data.

At 0900 BST, the FTSE 100 was up 0.2% at 7,518.86.

Figures released earlier by the National Bureau of Statistics showed that retail sales rose 2.7% in July on the year, coming in well below analyst expectations of 4.9% growth and down from 3.1% in June.

Meanwhile industrial production was up 3.8% in July following a 3.9% jump in June and missing expectations for a 4.3% increase.

Fixed asset investment rose 5.7% from July 2021 following 6.1% in June and versus expectations for 6.2% growth.

On home shores, a survey from Rightmove showed that house prices dropped in August for the first time this year.

The average asking price fell 1.3% on the month to £365,173. Annual growth slowed to 8.2% in August from 9.3% in July.

Tim Bannister, Rightmove’s director of Property Science, said: “A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays. Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic.

“Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home. To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and a half months.

“Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end year at around 7% annual growth, even with the wider economic uncertainty.”

In equity markets, RS Group – formerly Electrocomponents – surged after The Times reported over the weekend that it could be the subject of a takeover bid. It pointed to speculation of a possible £15 a share bid, which is a significant premium to the present share price and above the £12.35 high it hit last November before worries about a recession kicked in.

Drugmaker AstraZeneca was in the black after it said that its Enhertu drug, jointly produced with Japan’s Daiichi Sankyo, had been proven to offer statistically significant and clinically meaningful progression-free survival amongst breast cancer patients.

On the downside, insurer Phoenix Group was a little weaker despite saying it had delivered a record first-half performance and upping its dividend.

Trainline slumped after a downgrade to ‘neutral’ at JPMorgan.

 

Top 10 FTSE 100 Risers

# Name Change Pct Change Cur Price
1 Astrazeneca Plc +2.54% +272.00 10,984.00
2 Hikma Pharmaceuticals Plc +1.73% +26.50 1,559.00
3 Croda International Plc +1.40% +102.00 7,388.00
4 Kingfisher Plc +1.37% +3.40 252.30
5 Rentokil Initial Plc +1.27% +6.80 542.00
6 Ferguson Plc +1.26% +130.00 10,410.00
7 Flutter Entertainment Plc +1.26% +135.00 10,840.00
8 Melrose Industries Plc +1.21% +1.85 154.65
9 Dcc Plc +1.09% +58.00 5,366.00
10 Ocado Group Plc +1.06% +9.80 938.20

 

Top 10 FTSE 100 Fallers

# Name Change Pct Change Cur Price
1 Carnival Plc -2.42% -19.20 775.00
2 Gsk Plc -1.81% -26.20 1,423.80
3 Antofagasta Plc -1.62% -18.50 1,126.00
4 Anglo American Plc -1.60% -47.50 2,915.50
5 Itv Plc -1.37% -1.00 72.16
6 Tui Ag -1.26% -1.95 152.30
7 Rio Tinto Plc -1.24% -60.00 4,784.00
8 Shell Plc -0.93% -20.50 2,194.50
9 Glencore Plc -0.72% -3.40 469.00
10 Phoenix Group Holdings Plc -0.71% -4.80 676.00

 

Monday newspaper round-up: Amazon, Saudi Aramco, Victoria

Amazon could be off the hook for tax in the UK for at least two more years after benefiting from reliefs brought in by Rishi Sunak during the pandemic, a report suggests. The research from the Fair Tax Foundation indicates that the US tech company claimed more than £800m in capital allowances – business expenses that can be offset against profits – in 2021, £500m more than in 2020. – Guardian

Saudi Arabia’s largely state-owned energy firm has highlighted the colossal profits made by gas and oil-rich nations during the energy crisis by revealing profits in the three months to the end of June up 90% to $48bn (£40bn). Saudi Aramco recorded what is believed to be one of the largest quarterly profits in history to easily beat the near $26bn it made a year earlier. – Guardian

Pub, restaurant and hotel chiefs have warned the industry could face mass closure this winter without “urgent” support from the Government. In a joint letter to Boris Johnson, Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng, seen by The Telegraph, the UK’s leading hospitality groups said the situation was “no less of a threat” than the drought hitting Britain. – Telegraph

Nine in 10 employees at the Bank of England were handed bonuses last year even as inflation soared beyond its 2pc target. A total of 4,263 workers, accounting for about 90pc of its workforce, received a bonus last year, disclosures show. The highest payouts were between £15,000 and £20,000, with 34 members of staff getting rewards in this range. – Telegraph

Short-sellers have ramped up bets against Victoria, a carpetmaker with a royal warrant, after a critical report from an activist investor. The proportion of Victoria shares on loan, a proxy measure of the scale of short -selling, has risen from less than 1 per cent at the start of the year to 12 per cent last week, according to figures from S&P Global. The average is 0.18 per cent. – The Times

 

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