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London open: FTSE steady ahead of Powell testimony
London stocks were steady in early trade on Tuesday as investors erred on the side of caution ahead of a testimony by US Federal Reserve chair Jerome Powell.
At 0835 GMT, the FTSE 100 was flat at 7,933.95.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Caution is set to stay the name of the game on financial markets as investors await testimony from the world’s most influential central banker.
“With investors on tenterhooks about just how far interest rates will rise, and what effect this will have on the world’s largest economy, Fed chair Jerome Powell’s words in Washington as he speaks to senators later are likely to set off a ripple effect through indices. Any hint that he’s swirling the latest data and is finding a pattern of inflation that’s stubbornly hard to shift, could trigger fresh falls in equities, and may see bond yields edge up.”
On home shores, an industry survey showed that retail sales sparked in February, as consumers splashed out on Valentine’s Day presents.
According to the latest BRC-KPMG Retail Sales Monitor, UK like-for-like sales rose 4.9% year-on-year, or by 5.2% on a total basis. Within that, like-for-like food sales rose 8.2% while non-food sales increased 2.7%.
In January, sales rose 3.9% on a like-for-like basis and by 4.2% on a total basis.
The three categories that saw the biggest uptick in sales were health and beauty, food, and jewellery and watches.
Elsewhere, the latest survey from Halifax showed that house prices rose in February as mortgage rates fell and consumer confidence improved.
Prices increased 1.1% on the month following a 0.2% rise in January, to £285,476.
On the year, meanwhile, house price growth was unchanged at 2.1% last month. This was the third month in a row that annal growth was unchanged.
The survey showed that the rate of annual growth slowed in all nations and regions during February.
In equity markets, Fresnillo lost its shine after the gold and silver miner said profits more than halved in 2022 amid volatility in precious metals prices and increased cost pressures.
Spirent tumbled after it posted a rise in full-year profit and revenue as the order book grew, but cautioned over a more challenging first half of 2023.
High street baker Greggs nudged lower after it reported a 2% rise in annual profits, as inflation and higher costs hit the bottom line and said like-for-like sales in company-managed shops up was up 18.8% in the first nine weeks of 2023, in line with expectations.
Keller lost ground as the geotechnical engineering company posted a fall in full-year earnings as inflation, higher costs and the war in Ukraine took their toll.
On the upside, equipment rental firm Ashtead rallied after it said full-year results were set to be ahead of its expectations following a strong third-quarter performance, as it highlighted “robust” end markets.
Wood Group was also up after saying it had rejected a fourth takeover approach from Apollo Global Management at 237p a share as it continues to undervalue the business.
Just Group surged as it said full-year underlying profits grew 19%, while Premier Foods shot higher as the Mr Kipling owner upgraded its full-year profit expectations, pointing to a continued strong performance.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ashtead Group Plc | +3.13% | +180.00 | 5,926.00 |
| 2 |  |
Melrose Industries Plc | +2.87% | +4.50 | 161.40 |
| 3 |  |
Rentokil Initial Plc | +1.99% | +10.20 | 521.60 |
| 4 |  |
Hikma Pharmaceuticals Plc | +1.77% | +31.50 | 1,809.00 |
| 5 |  |
Tui Ag | +1.41% | +23.00 | 1,659.00 |
| 6 |  |
Auto Trader Group Plc | +1.25% | +7.40 | 598.20 |
| 7 |  |
Segro Plc | +1.17% | +9.60 | 830.20 |
| 8 |  |
Rightmove Plc | +0.98% | +5.60 | 575.60 |
| 9 |  |
Severn Trent Plc | +0.91% | +25.00 | 2,780.00 |
| 10 |  |
Easyjet Plc | +0.81% | +4.20 | 520.40 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1
|
 |
Coca-cola Hbc Ag | -2.21% | -48.00 | 2,127.00 |
| 2 |  |
Vodafone Group Plc | -1.98% | -2.00 | 99.22 |
| 3 |  |
Carnival Plc | -1.75% | -14.80 | 829.20 |
| 4 |  |
Burberry Group Plc | -1.54% | -39.00 | 2,488.00 |
| 5 |  |
Fresnillo Plc | -1.42% | -10.80 | 749.60 |
| 6 |  |
Ocado Group Plc | -0.98% | -5.20 | 524.60 |
| 7 |  |
Sainsbury (j) Plc | -0.90% | -2.40 | 263.20 |
| 8 |  |
Rolls-royce Holdings Plc | -0.89% | -1.36 | 151.42 |
| 9 |  |
Bhp Group Limited | -0.82% | -22.00 | 2,645.00 |
| 10 |  |
Itv Plc | -0.70% | -0.62 | 87.34 |
US close: Stocks mixed ahead of Powell testimony
Wall Street stocks delivered a mixed performance on Monday as traders held their breath for a number of economic data points and comments from policymakers scheduled for later in the week.
At the close, the Dow Jones Industrial Average was up 0.12% at 33,431.44, while the S&P 500 advanced 0.07% to 4,048.42 and Nasdaq Composite saw out the session 0.11% stronger at 11,675.74.
The Dow closed 40.47 points higher on Monday, extending solid gains recorded in the previous session as all three major averages wrapped up the week in positive territory despite elevated Treasury yields.
Market participants were looking ahead to congressional testimony from Federal Reserve chairman Jerome Powell, which will hopefully provide insight into exactly what the central bank thinks about inflation and what its rate-hiking campaign will look like going forward.
Investors also patiently awaited February’s jobs report, scheduled for release on Friday, which comes after red hot numbers that revealed the US economy added 517,000 payrolls in the prior month. Economists expect to see a print of 225,000.
On the macro front, factory orders fell 1.6% month-on-month in January, according to the Census Bureau, following a downwardly revised 1.7% increase in December but still beating market expectations for a 1.8% decline.
Orders for transportation tumbled 13.3%, while new orders rose for fabricated metal products; electrical equipment, appliances, and components; and machinery. Excluding transportation, factory orders rose 1.2%, bouncing back from a 1.2% fall in the previous month.
No major corporate earnings were released on Monday.
Tuesday newspaper round-up: EU suppliers, National Grid, discounters
A publicly owned electricity generation firm could save Britons nearly £21bn a year, according to new analysis that bolsters Labour’s case to launch a national energy company if the party gains power. Thinktank Common Wealth has calculated that the cost of generating electricity to power homes and businesses could be reduced by £20.8bn or £252 per household a year under state ownership, according to a report seen by the Guardian. – Guardian
Business leaders say frayed relations with the EU are costing the British economy, as suppliers in the bloc grow more cautious about doing business with post-Brexit Britain. Adding to the pressure on Rishi Sunak’s government as bosses warn that the UK is falling behind its peers, the manufacturers’ group Make UK called for an urgent reset of political and trading relationships with the EU. – Guardian
National Grid has told an emergency coal power station to start warming up as the country braces for a cold snap on Tuesday. The West Burton A plant near Retford in Nottinghamshire will be placed on standby to meet demand if energy use surges as temperatures drop. The plant is one of three that were due to close in September 2022 but have been kept online in case needed amid concern about energy security this winter. They have been warmed up several times so far this winter, but not yet used. – Telegraph
The government’s plan to overhaul the rules for the insurance industry could increase the annual probability of a life company failing by about 20 per cent, the governor of the Bank of England has warned. The Bank’s estimate of the higher risk, which was disclosed by Andrew Bailey in a letter to MPs on the Commons treasury select committee, could reignite tensions between the Bank and the government over ministers’ plans to loosen the regulations governing insurers. They have already clashed about the reforms. – The Times
Consumers increasingly turned to discount retailers last month as their spending on utility bills soared. Household spending in discount stores grew by 5.5 per cent in February as shoppers sought cheaper goods, according to Barclaycard data. The growth in spending in value outlets has picked up from 4.2 per cent in January. – The Times
