Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
London open: Stocks fall on hawkish Powell; Admiral slumps on results
London stocks fell in early trade on Wednesday, taking their cue from a downbeat session on Wall Street after a hawkish testimony from Federal Reserve chair Jerome Powell.
At 0850 GMT, the FTSE 100 was down 0.2% at 7,901.04, as investors waded through a raft of corporate news.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The global stock sell-off is continuing with investors jolted by the realisation that the work of the Federal Reserve in trying to tame wild inflation in the US far from over.
“In his testimony before Congress, the Fed chair Jerome Powell indicated that hotter than expected readings of the labour market, business activity and core prices in January show that inflation is proving much stronger than policymakers anticipated when they last met to decide monetary policy.
“Three fresh rate rises in March, May and June now look likely and the chances of a steeper 0.5% hike later this month are increasing if the February jobs snapshot and consumer price data doesn’t show significant signs of cooling. As borrowing costs are set to shoot up yet again, it’ll pile more pressure on consumers and companies.
“It’s adding to worries that the US economy won’t fall like a feather into a mild downturn but slam into a recession.”
In equity markets, Admiral slumped after the insurer cut its full-year dividend as it said profits fell in a “challenging” market.
Legal & General lost ground despite lifting its dividend and posting a jump in full-year operating profit.
Tullow Oil was also weaker despite saying that annual profits almost doubled as it cashed in on higher oil and gas prices sparked by the war in Ukraine.
On the upside, Hiscox rallied as it said full-year pre-tax profit fell to $44.7m from $190.8m, versus expectations for a loss of $69.2m.
Quilter gained as the wealth manager reported a better-than-expected full-year profit and said investor sentiment was expected to recover this year.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | +2.57% | +3.94 | 157.12 |
| 2 |  |
Bhp Group Limited | +0.99% | +26.00 | 2,661.00 |
| 3 |  |
Ferguson Plc | +0.86% | +100.00 | 11,715.00 |
| 4 |  |
Hiscox Ltd | +0.65% | +7.00 | 1,080.00 |
| 5 |  |
Coca-cola Hbc Ag | +0.65% | +14.00 | 2,174.00 |
| 6 |  |
Rio Tinto Plc | +0.58% | +34.00 | 5,928.00 |
| 7 |  |
Kingfisher Plc | +0.56% | +1.60 | 288.00 |
| 8 |  |
Bae Systems Plc | +0.44% | +4.00 | 915.40 |
| 9 |  |
Fresnillo Plc | +0.31% | +2.20 | 710.60 |
| 10 |  |
Hsbc Holdings Plc | +0.29% | +1.80 | 626.10 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Admiral Group Plc | -4.79% | -100.00 | 1,988.00 |
| 2 |  |
Schroders Plc | -3.73% | -18.10 | 466.90 |
| 3 |  |
Carnival Plc | -2.40% | -20.00 | 813.60 |
| 4 |  |
Direct Line Insurance Group Plc | -2.28% | -4.00 | 171.40 |
| 5 |  |
Legal & General Group Plc | -2.07% | -5.50 | 260.30 |
| 6 |  |
St. James’s Place Plc | -2.04% | -26.00 | 1,251.50 |
| 7 |  |
Johnson Matthey Plc | -2.03% | -44.00 | 2,122.00 |
| 8 |  |
Easyjet Plc | -1.96% | -10.20 | 510.60 |
| 9 |  |
Segro Plc | -1.63% | -13.20 | 795.80 |
| 10 |  |
Land Securities Group Plc | -1.58% | -10.60 | 659.00 |
US close: Stocks tumble following Powell testimony
Wall Street stocks headed south on Tuesday as market participants digested testimony from Federal Reserve chairman Jerome Powell.
At the close, the Dow Jones Industrial Average was down 1.72% at 32,856.46, while the S&P 500 slipped 1.53% to 3,986.37 and the Nasdaq Composite saw out the session 1.25% firmer at 11,530.33.
The Dow closed 574.98 points lower on Tuesday, easily erasing gains recorded in the previous session.
Investors zeroed in on congressional testimony from Powell on Tuesday, with the head of the Federal Reserve keeping the door open to larger rate hikes, if needed, while pointing out that recent economic data had been stronger than expected. In remarks prepared for his speech before the US Senate’s Banking Committee, Jerome Powell, conceded that warmer weather had played a hand in recent stronger readings for employment, consumption and inflation.
“Still, the breadth of the reversal along with revisions to the previous quarter suggests that inflationary pressures are running higher than expected at the time of our previous Federal Open Market Committee meeting,” he added.
Elsewhere wholesale inventories decreased 0.40% month-on-month in January, in line with analysts’ estimates. According to the Census Bureau, wholesale inventories slipped to $929.0bn in January, more than erasing the prior month’s revised 0.1% increase to $932.9bn.
Wednesday newspaper round-up: Rail strikes, air fares, John Lewis
The RMT union has called off a strike at Network Rail next week, fuelling hopes of a significant breakthrough in the long-running dispute. The union said it was suspending the strike planned for Thursday 16 March and all other industrial action, which was to include an overtime ban, after it received a fresh offer from Network Rail. – Guardian
Jeremy Hunt’s tax raid on airlines means passengers will have to pay higher air fares, bosses have warned. British Airways, Virgin Atlantic, Ryanair and easyJet are among a coalition of airlines urging the Chancellor not to increase air passenger duty (APD) in line with the retail prices index (RPI) next month. – Telegraph
Mortgaged homeowners in the UK are more at risk of falling into arrears than in any other major developed country, a leading credit ratings agency has warned. The share of homeowners missing more than three months of mortgage payments will double in 2023 to 1.5pc as high rates hit borrowers, according to Fitch Ratings. Based on the current number of residential mortgages in the UK, this means 135,000 households will be in arrears. – Telegraph
John Lewis is running into resistance over its first build-to-rent project, with the leader of the local council accusing the retailer of “bullying” and raising concerns about the height of its planned tower blocks and the lack of affordable housing. The trailblazing plan to build 430 flats in towers up to 19 storeys high in the west London suburb of Ealing above a Waitrose supermarket is already months behind schedule, according to local residents. – The Times
