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London open: Stocks fall amid earnings avalanche
London stocks fell in early trade on Thursday following mostly downbeat US and Asian sessions, as investors waded through an avalanche of corporate news.
At 0835 GMT, the FTSE 100 was down 0.4% at 7,887.23.
Victoria Scholar, head of investment at Interactive Investor, said: “The FTSE 100 is being dragged down by Flutter which is trading at the bottom of the UK index on the back of disappointing full-year earnings.
“Focus in Europe now shifts to key inflation and unemployment data from the eurozone at 10am. February’s headline inflation rate is expected to ease to between 8-8.5% from 8.6% in January, however this is still sharply above the ECB’s 2% target. The unemployment rate is seen holding steady at 6.6% close to its record low as the labour market remains tight, potentially adding to inflationary pressures.”
In equity markets, Flutter slumped even as it reported strengthened revenues, boosted by acquisitions and a strong performance in the US.
Insurer Beazley lost ground after it posted a drop in full-year profit as it took a hit from investment losses.
GSK spinoff Haleon was on the back foot as it said full-year adjusted operating profit rose 13.8% and that it expects organic revenue growth of 4% to 6% for 2023, and for the adjusted operating margin to be “broadly flat”.
LSE Group was weaker as it posted a jump in full-year profit and said it was seeking shareholder approval for a £750m buyback.
ITV fell after the broadcaster reported lower annual profits due to tougher economic conditions and the investment made in its ITVX streaming service.
Taylor Wimpey was down as it warned that completions were set to fall this year, the latest housebuilder to see higher mortgage costs and the cost-of-living crisis knock buyer confidence after a profit warning from Persimmon on Wednesday.
On the upside, CRH surged to the top of the FTSE 100 after the building materials group posted a jump in full-year earnings and sales, and said it was planning to recommend a transition to a US primary listing this year.
Melrose advanced after it said 2022 profits came in higher than expected and forecast a significantly stronger performance from its aerospace unit this year.
M&G rallied following a Sky News report that Australian banking and finance group Macquarie is weighing a £5bn-plus takeover bid for the fund manager and insurer.
National Express and Coats Group also rose after results.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Crh Plc | +11.14% | +441.00 | 4,399.50 |
| 2 |  |
Bhp Group Limited | +1.94% | +51.00 | 2,677.50 |
| 3 |  |
Rio Tinto Plc | +1.36% | +81.00 | 6,053.00 |
| 4 |  |
Hikma Pharmaceuticals Plc | +1.15% | +20.00 | 1,758.50 |
| 5 |  |
Croda International Plc | +0.97% | +64.00 | 6,634.00 |
| 6 |  |
Anglo American Plc | +0.97% | +29.00 | 3,009.00 |
| 7 |  |
Ashtead Group Plc | +0.83% | +46.00 | 5,606.00 |
| 8 |  |
Centrica Plc | +0.82% | +0.85 | 104.50 |
| 9 |  |
Severn Trent Plc | +0.79% | +21.00 | 2,685.00 |
| 10 |  |
Rentokil Initial Plc | +0.79% | +4.00 | 513.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hsbc Holdings Plc | -4.22% | -27.00 | 613.30 |
| 2 |  |
Flutter Entertainment Plc | -4.11% | -555.00 | 12,935.00 |
| 3 |  |
Schroders Plc | -2.96% | -14.80 | 485.40 |
| 4 |  |
Itv Plc | -2.62% | -2.32 | 86.16 |
| 5 |  |
Hargreaves Lansdown Plc | -2.06% | -17.20 | 819.20 |
| 6 |  |
Standard Chartered Plc | -1.29% | -10.20 | 779.60 |
| 7 |  |
Tui Ag | -1.21% | -19.00 | 1,551.50 |
| 8 |  |
Wpp Plc | -1.21% | -12.50 | 1,022.00 |
| 9 |  |
Barclays Plc | -1.19% | -2.08 | 172.34 |
| 10 |  |
Informa Plc | -1.18% | -8.00 | 669.60 |
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.
Thursday newspaper round-up: Satellite launches, Arm, LVMH
Britain’s failed attempt to send satellites into orbit was a “disaster” and MPs are being urged to redirect funding to hospitals, with the country now seen as “toxic” for future launches. Senior figures at the Welsh company Space Forge, which lost a satellite when Virgin Orbit’s Start Me Up mission failed to reach orbit, said a “seismic change” was needed for the UK to be appealing for space missions. – Guardian
London is falling behind other international capitals as “superstar” businesses are strangled by red tape and years of underinvestment, a think-tank has warned. The Centre for Cities also blamed soaring house prices for a dismal rise in living standards that meant London’s annual productivity rose by an average of just 0.2pc between 2007 and 2019. – Telegraph
British technology giant Arm will spurn advances from Rishi Sunak to float in London and instead opt for New York, in a blow to the Prime Minister’s attempt to convince high-tech companies to go public in Britain. The company, which is owned by the Japanese multinational SoftBank, will list its shares in the US when it floats later this year, according to reports last night. – Telegraph
LVMH has strengthened its footing as the most valuable company in Europe after a €1.5 billion buyback winched up shares in the luxury conglomerate. Shares in the retail group, led by the French billionaire Bernard Arnault, rose by 0.4 per cent to €792.20 yesterday, giving the company a market valuation of €397 billion. – The Times
