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London open: Stocks rise as miners gain on China data
London stocks rose in early trade on Wednesday, with miners pacing the advance on the back of encouraging Chinese data, but housebuilders under the cosh after a profit warning from Persimmon.
At 0830 GMT, the FTSE 100 was up 0.3% at 7,903.25.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “March winds of hope are blowing through markets that China’s reopening will offset weakness in other countries which are beset with stubborn inflation and a worsening cost of living crisis.
“The vast Chinese economy is snapping back from the pain of the pandemic with the latest reading of the closely watched survey on factory activity showing better-than-expected growth in February. The Caixin General Manufacturing PMI rose to 51.6, exceeding forecasts of 50.2, up from 49.2 in January.
“A level above 50 indicates expansion and this is the best result since May 2021 before the onerous effects of the rolling lockdowns took effect, and the first jump in activity since July, with new orders, increased staff levels and higher output all showing up.”
On home shores, the latest survey from mortgage lender Nationwide showed that house prices fell by 1.1% year-on-year in February, the first annual decline since June 2020.
Prices declined 0.5% month-on-month, marking the sixth consecutive monthly drop, according to the building society’s key index. Across the UK, the average house price in February was £257,406.
Prices are now 3.7% lower than their peak last August, and February’s negative annual price growth was the weakest seen since November 2012, Nationwide added.
Elsewhere, the latest BRC-NielsenIQ Shop Price Index showed that shop price inflation hit a fresh high in February as the cost of food continued to soar. Annual inflation was a record 8.4% compared to 8% in January.
Within that, non-food inflation was 5.3%, up from 5.1% in January, while food surged to 14.5%, the highest inflation rate in the food category on record. In January, it was 13.8%.
Still to come, mortgage approvals, consumer credit and manufacturing PMI are all due at 0930 GMT.
In equity markets, miners were the top performers after the Chinese data, with Rio, Glencore and Antofagasta all up.
Weir was the standout gainer on the FTSE 100, however, after the engineering group posted a rise in annual profits on the back of a booming mining industry.
Aston Martin rallied as it reported a sharp jump in full-year revenues amid increasing output and record total average selling prices.
Dettol and Nurofen maker Reckitt Benckiser ticked up after saying it swung to a full-year profit as it benefited from higher prices.
On the downside, housebuilders slid after a profit warning from Persimmon, which said it had been hit by a spike in mortgage rates. The company said completions would likely be down “markedly” in the current year, which would hit both margin and profits.
Persimmon tumbled more than 8%, while Taylor Wimpey, Barratt, Berkeley, Redrow and Bellway all fell.
Elsewhere, media group Future was in the red after an initiation at ‘sell’ by Canaccord Genuity.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Anglo American Plc | +4.68% | +135.00 | 3,019.50 |
| 2 |  |
Bhp Group Limited | +4.37% | +110.50 | 2,638.00 |
| 3 |  |
Antofagasta Plc | +4.30% | +67.50 | 1,637.50 |
| 4 |  |
Rio Tinto Plc | +3.89% | +222.00 | 5,934.00 |
| 5 |  |
Glencore Plc | +3.34% | +16.55 | 511.90 |
| 6 |  |
Fresnillo Plc | +1.99% | +15.20 | 778.60 |
| 7 |  |
Burberry Group Plc | +1.74% | +43.00 | 2,509.00 |
| 8 |  |
Melrose Industries Plc | +1.67% | +2.50 | 152.35 |
| 9 |  |
3i Group Plc | +1.63% | +26.50 | 1,653.50 |
| 10 |  |
Carnival Plc | +1.59% | +12.40 | 791.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Persimmon Plc | -9.54% | -138.50 | 1,314.00 |
| 2 |  |
Barratt Developments Plc | -3.22% | -15.10 | 454.00 |
| 3 |  |
Taylor Wimpey Plc | -2.39% | -2.95 | 120.25 |
| 4 |  |
Ocado Group Plc | -2.08% | -11.40 | 537.40 |
| 5 |  |
Berkeley Group Holdings (the) Plc | -1.50% | -63.00 | 4,133.00 |
| 6 |  |
Severn Trent Plc | -1.49% | -41.00 | 2,710.00 |
| 7 |  |
Segro Plc | -1.36% | -11.20 | 812.20 |
| 8 |  |
National Grid Plc | -1.29% | -13.50 | 1,034.50 |
| 9 |  |
Gsk Plc | -1.25% | -17.80 | 1,407.60 |
| 10 |  |
United Utilities Group Plc | -1.18% | -12.00 | 1,006.00 |
US close: Stocks finish lower after slew of data
Wall Street trading closed below the waterline on Tuesday, as investors digested a number of data points.
At the close, the Dow Jones Industrial Average was down 0.71% at 32,656.70, as the S&P 500 lost 0.3% to 3,970.15 and the Nasdaq Composite was 0.1% weaker at 11,455.54.
The Dow closed 232.39 points lower on Tuesday, easily reversing gains recorded in the previous session as Treasury yields eased back from recent highs.
Despite what had been a generally strong start to the year, major indices looked to have registered their second negative month out of the last three on the final day of February trading, with the Dow down more than 3% on the month and negative for the year as a whole.
“The latest consumer confidence survey highlighted a growing unease amongst the US population, with both the present situation and expectations declining in February,” said IG senior market analyst Joshua Mahony.
“Recent optimism over a ‘soft landing’ in the US economy has been built on the apparent strength of the US consumer spending.
“However, the survey showed a decline in the number of those planning to spend on big ticket items such as homes, autos, or holidays.
“The report provided a heads up for next week’s jobs report, with a surge in those finding employment plentiful bringing expectations of further payrolls strength.”
On the macro front, America’s shortfall on trade in goods with the rest of the world increased at the start of 2023.
According to the Department of Commerce, the visible trade deficit rose by 2.0% month-on-month to reach $91.5bn.
Economists had pencilled in a shortfall of approximately $91.0bn.
Elsewhere, house price gains in the US continued to slow at the end of 2022
In December, the S&P CoreLogic Case-Shiller 20-city house price index fell at a non-seasonally adjusted month-on-month pace of 0.9% – pushing the annual rate of increase down to 4.6% from 6.8%.
Separately, the Federal Housing Finance Agency reported that in the fourth quarter of 2022, house prices in the US rose by 0.3% versus the prior three-month stretch and by 8.4% in comparison to the same quarter one year earlier.
Upon seasonal adjustment, house prices were down by 0.1% month-on-month in December – stronger than the 0.6% decline predicted.
Moving on, factory sector activity in the Chicago area slipped a tad in February, with the Chicago Business Barometer slipping by 0.7 points from the month before to reach 43.6.
Economists had been anticipating a slight improvement to 45.0.
On another note, consumer confidence slipped back unexpectedly in February as expectations for jobs, incomes and business conditions all soured, with the Conference Board‘s consumer confidence index falling from a reading of 106.0 for January to 102.9 in February – well and truly missing expectations for an increase to 108.4.
Finally, the Richmond Fed’s manufacturing index decreased from -11 in January to -16, its lowest reading since May 2020, and the Dallas Fed’s manufacturing index slipped 5.1 points to -13.5 in February – a tenth straight month of contraction in activity across Texas.
In the corporate space, retail giant Target Corporation closed up 1.01% after it topped expectations with its fourth-quarter earnings on Tuesday, partly due to improved sales over the all-important holiday trading season.
AutoZone, meanwhile, was down 3.33% despite beating earnings estimates by $2.81 per share, while Norwegian Cruise Line tumbled 10.18% after it missed earnings per share expectations by 19 cents despite revenues matching Wall Street estimates.
Wednesday newspaper round-up: Energy prices, tube workers, Arrival
Ministers have warned energy firms that they must pass on the benefits of lower wholesale prices to consumers, amid concern that bills could rise this spring. In a speech on Wednesday, Grant Shapps will tell energy suppliers that reduced wholesale prices must be seen in consumer prices, “no ifs, buts or maybes”. In an apparent sign of government concern about the impact of reduced direct support for domestic energy bills, the energy secretary will spell out his message in a speech at the Chatham House thinktank in London. – Guardian
Tube workers in the RMT union will strike on 15 March, joining Aslef in a 24-hour stoppage that will bring the London Underground to a halt. The strike, on the day of the budget, will be the first this year in London by the RMT, in a long-running dispute over pensions and reducing the number of staff. Most services were already unlikely to run on 15 March because of the strike announced by Tube train drivers in the Aslef union last week. – Guardian
A British electric van champion once valued at $13bn has been forced to fight off legal action by a creditor as it grapples with a collapsing share price. Arrival, which is listed on the US stock market, was hit with a winding up petition by a supplier over an alleged unpaid debt. – Telegraph
The Thai and Austrian owners of Selfridges have laden the upmarket department store with more than £1.7bn of debt in a higher-risk strategy that could significantly increase investment returns. Loans were booked through a number of new trading and property entities by Tiang Chirathivat and René Benko as they took control of the 114-year Oxford Street stalwart last autum+-n, according to company filings. – Telegraph
The pharmaceuticals industry has urged the government to slash a contentious sales levy back to “historical norms” as part of a wider overhaul to attract investment. In a submission to the Department of Health and Social Care, the Association of the British Pharmaceutical Industry has called for the rebate rate on sales of NHS branded medicines to be fixed at 6.88 per cent, down from an estimated 26.5 per cent this year. – The Times
Nishad Singh, the former director of engineering at FTX, pleaded guilty to criminal charges in the United States last night and agreed to co-operate with prosecutors’ investigation into Sam Bankman-Fried, founder of the now-bankrupt cryptocurrency exchange. “I am unbelievably sorry for my role in all of this,” Singh said, adding that he had known by mid-2022 that Alameda Research, Bankman-Fried’s hedge fund, was borrowing FTX customer funds and that customers were not aware. Singh said that he would forfeit proceeds from the scheme. – The Times
