ADVFN Morning London Market Report: Friday 9 December 2022

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London open: FTSE flits between gains and losses; Hunt’s City shake-up eyed


London stocks were flitting between small gains and losses early on Friday, with Chancellor Jeremey Hunt set to outline plans later in the day for a shake-up of City regulation.

At 0820 GMT, the FTSE 100 was up 0.2% at 7,486.35.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Chancellor Jeremy Hunt is expected to launch a significant reform of the UK’s financial sector, which will be announced in Edinburgh later today.

“Hunt is widely expected to scorch red tape and update or replace a number of EU regulations. It’s clear the government is going for growth, but the extent of today’s package will need to be vast, if it’s to have any meaningful impact for brand UK at a time when the country struggles with a slowing economy and cost-of-living crisis.

“Some of the regulatory changes could include relaxing the rule that demands major banks to keep investment and retail banking separate. There’s an argument to say it’s crucial the government strikes the right balance between stoking the engines of growth in what has become a tepid environment, and not slashing standards too far in the name of that aim. The market’s likely to have a sharp reaction to today’s reform if any deeper-than-expected shake ups are in Hunt’s package.”

In equity markets, InterContinental Hotels was the standout gainer on the FTSE 100 after an upgrade to ‘buy’ from ‘hold’ at Peel Hunt.

Housebuilder Berkeley Group also rose after it backed its full-year profit outlook but posted a drop in first-half profits.

Investment manager Man Group surged as it announced a share buyback programme of up to $125m.

On the downside, Primark owner Associated British Foods edged lower as it maintained full-year guidance, saying it continued to expect further significant input cost inflation, but the volatility of input costs had diminished.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Intercontinental Hotels Group Plc +2.36% +113.00 4,905.00
2 Ocado Group Plc +2.25% +15.20 691.00
3 Smurfit Kappa Group Plc +2.07% +62.00 3,061.00
4 Smith (ds) Plc +1.85% +5.80 318.80
5 Melrose Industries Plc +1.67% +2.10 127.80
6 Mondi Plc +1.40% +20.50 1,482.50
7 Prudential Plc +1.23% +13.00 1,071.50
8 Informa Plc +1.23% +7.60 627.00
9 Whitbread Plc +1.12% +29.00 2,615.00
10 Crh Plc +1.11% +35.50 3,229.50


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Bp Plc -1.91% -8.85 455.10
2 Glencore Plc -1.55% -8.50 540.10
3 Anglo American Plc -1.52% -50.00 3,249.50
4 Fresnillo Plc -1.33% -11.80 873.60
5 Gsk Plc -1.32% -19.60 1,464.00
6 Bae Systems Plc -1.30% -10.80 820.60
7 Shell Plc -1.13% -26.00 2,283.50
8 Hikma Pharmaceuticals Plc -0.82% -12.50 1,514.00
9 Imperial Brands Plc -0.63% -13.00 2,057.00
10 Carnival Plc -0.61% -4.00 656.00


US close: S&P 500 snaps five-day losing streak as stocks rise

Wall Street stocks finished in positive territory on Thursday, with the S&P 500 breaking a five-day losing streak, as investors digested this week’s jobless claims report from the Labor Department.

At the close, the Dow Jones Industrial Average was up 0.55% at 33,781.48, as the S&P 500 added 0.75% to 3,963.51 and the Nasdaq Composite was ahead 1.13% at 11,082.00.

The Dow closed 183.56 points higher on Thursday, boosting away from Wednesday’s flat performance.

“US markets are enjoying a welcome break from the selling pressure that has dominated this week thus far, with the Nasdaq surging upward after a five-day losing streak that has brought over 4% of downside,” said IG senior market analyst Joshua Mahony.

“To a large extent this week highlights how traders have to somehow weigh up the benefits of a gradual Chinese reopening with the fears of an impending economic contraction in the year ahead.

“While the resurgence in equities seen today does highlight the interchangeable nature of market sentiment at the moment, the surge in natural gas seen since Tuesday does highlight how a cold snap in Europe could once again test the bulls if inflation fears resurface.”

Thursday’s primary focus on the economic front was the Labor Department’s all-important jobless claims report, which revealed Americans filed first-time unemployment claims at an accelerated clip in the week ended 3 December.

Initial jobless claims rose by 4,000 to 230,000, up from the prior week’s upwardly revised print, while the four-week moving average, which aims to strip out week-to-week volatility, also printed at 230,000 – the highest level seen since the final week of August.

Market participants also continued to assess the likelihood of a coming recession ahead of an expected 50 basis point interest rate hike by the Federal Reserve next week, with many traders now losing faith in the central bank’s ability to engineer a soft landing.

In equities, pharmaceutical developer Pharvaris went stratospheric, rocketing 356.57% after it reported positive data from its trial in mid-stage hereditary angioedema.

GameStop was ahead 11.37% despite disappointing in its latest quarterly earnings, while Exxon Mobil eked out gains of 0.74% after it announced share buybacks of up to $50bn through to the end of 2024.


Friday newspaper round-up: Rail strikes, National Grid, Morrisons

A “permanent” strike at the factory that makes Jacob’s Cream Crackers and Twiglets has come to an end after biscuit bosses crumbled and upped a pay deal for workers. More than 750 of about 800 workers returned to work at the brand’s factory in Aintree on Thursday having won a 6.5% pay increase, backdated to January, with a £500 bonus payment on top and a further £250 bonus to follow in January next year. – Guardian

The leader of the RMT union, Mick Lynch, has accused the government of deliberately ensuring next week’s rail strikes go ahead by blocking negotiations, with rail bosses calling off talks as “a waste of time” while ministers insist on unacceptable provisions. He said meetings between the Rail Delivery Group (RDG) representing train operators and the RMT had failed to occur for three successive days because of a clause inserted for driver-only operation, which all rail unions have bitterly opposed for many years. – Guardian

Jeremy Hunt is to tear up hundreds of pages of “overbearing” EU legislation in a bid to boost Britain’s financial services industry after Brexit. The Chancellor will on Friday in Edinburgh announce a package of reforms aimed at increasing the City of London’s competitiveness by relaxing ring-fencing rules on smaller banks and mandating financial regulators to focus on economic growth as well as consumer protection. – Telegraph

National Grid is on standby to alert households to cut their electricity usage in the coming days amid a looming supply squeeze. The country’s grid operator has warned that electricity supplies will be tight on Friday and Sunday amid low wind levels and a cold snap sweeping the UK. – Telegraph

The former chief executive of Wirecard, who guided the payments company through its rise and subsequent collapse two years ago, went on trial for fraud yesterday, after a scandal that shook German politics and tarnished the country’s business reputation. Markus Braun, 53, who has been in custody since his arrest in 2020, and two other managers of the defunct blue-chip company face charges including fraud and market manipulation. If convicted, they could be jailed for 15 years. A verdict from the Berlin court is not expected before 2024. – The Times

Morrisons has struck a £220 million “sale and leaseback” deal that will allow it to accelerate the launch of Morrisons Daily, its convenience store chain. The supermarket group has agreed to sell seven of its distribution warehouses to Intermediate Capital Group, the FTSE 100 asset management firm, property agents say. Morrisons has leased back the warehouses on contracts of up to 25 years. The deal could be announced within days. – The Times


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