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London open: Tentative start for FTSE 100 as markets eye US data
The FTSE 100 edged higher in morning trade on Thursday, rising for the second straight session, though gains were limited as investors showed caution ahead of some all-important inflation figures from the US.
London’s benchmark index was trading 7 points higher at 7,595.29, up just 0.1% on the day, at 0827 BST.
Overnight, Asian stocks ended the session mixed, with the Nikkei 225 up 0.9%, the Shanghai Composite flat and the Hang Seng Index down 0.7%. On Wall Street, the Dow Jones and S&P 500 closed 0.5% and 0.7% lower, respectively, while the Nasdaq dropped 1.2%.
Investors were opting for a risk-off approach ahead of inflation figures from the world’s largest economy, due out at 1330 BST. Consensus estimates point to a slight pick-up in the annual rate of consumer price inflation, from 3% in June to 3.3% in July, now that so-called negative base effects had run their course.
Jobless claims data is also due for release on Thursday, while US producer price inflation figures are due out on Friday.
“Any bad surprise on the inflation front could revive the Federal Reserve hawks, but we are far from pricing another hike in September just yet,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Activity on Fed funds futures assesses more than 85% chance for pause in September FOMC meeting.”
Antofagasta leads miners higher, Spirax-Sarco drops
Antofagasta edged higher after announcing first-half revenue of $2.89bn – a 14.3% increase year-on-year, primarily due to higher copper and by-product sales volumes and prices. Sector peers Glencore and Anglo American were also putting in gains early on. Rio Tinto, however, was lower after trading ex-dividend.
Shares in Spirax-Sarco Engineering dropped 5% in early trade after the group revealed a 7% decline in statutory operating profit for the first half on the back of a drop in sales from its Watson-Marlow division.
Housebuilder Persimmon gained after saying it was on track to meet expectations for full-year profit, despite higher mortgage rates, the removal of Help-to-Buy and “significant” market uncertainty. Top-line growth, excluding bulk sales, was described as “robust”, private average selling prices increased in its order book and costs savings were achieved, it said.
On the FTSE 250, Watches of Switzerland posted in-line first-quarter sales and reiterated its full-year guidance amid “robust” demand for luxury watches.
Real estate group Savills disappointed after cutting its forecasts for the financial year following a tough first half which saw profits sink 72%. Savills is the latest in a string of real estate and housebuilding companies to report challenging operating conditions, owing mainly to higher borrowing costs for mortgage holders, and the wider cost-of-living crisis.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Persimmon Plc | +3.74% | +42.00 | 1,165.50 |
| 2 |  |
Intercontinental Hotels Group Plc | +2.70% | +160.00 | 6,094.00 |
| 3 |  |
Prudential Plc | +2.51% | +25.50 | 1,041.00 |
| 4 |  |
Tui Ag | +2.49% | +14.00 | 576.00 |
| 5 |  |
Burberry Group Plc | +2.32% | +51.00 | 2,247.00 |
| 6 |  |
Easyjet Plc | +2.11% | +9.40 | 454.90 |
| 7 |  |
Legal & General Group Plc | +1.83% | +4.20 | 233.10 |
| 8 |  |
Croda International Plc | +1.71% | +94.00 | 5,582.00 |
| 9 |  |
Ocado Group Plc | +1.68% | +14.20 | 857.40 |
| 10 |  |
St. James’s Place Plc | +1.63% | +14.80 | 922.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Spirax-sarco Engineering Plc | -5.81% | -630.00 | 10,205.00 |
| 2 |  |
Rio Tinto Plc | -3.10% | -153.50 | 4,801.50 |
| 3 |  |
Ashtead Group Plc | -1.32% | -76.00 | 5,672.00 |
| 4 |  |
Astrazeneca Plc | -1.06% | -118.00 | 11,064.00 |
| 5 |  |
Hsbc Holdings Plc | -0.94% | -6.00 | 630.00 |
| 6 |  |
Bae Systems Plc | -0.78% | -8.00 | 1,020.00 |
| 7 |  |
Ferguson Plc | -0.60% | -75.00 | 12,495.00 |
| 8 |  |
Barclays Plc | -0.48% | -0.72 | 148.18 |
| 9 |  |
Wpp Plc | -0.48% | -3.80 | 786.80 |
| 10 |  |
Informa Plc | -0.43% | -3.20 | 748.00 |
US close: Stocks stumble ahead of fresh inflation data
Wall Street put in a subdued performance on Wednesday, with major indices trending downwards as attention shifted towards forthcoming key economic data on US inflation, set to be released later in the week.
At the close, the Dow Jones Industrial Average was down 0.54%, settling at 35,123.36 points, while the broader S&P 500 index declined by 0.7% to conclude at 4,467.71 points.
The tech-heavy Nasdaq Composite was the hardest hit among the primary indices, sliding 1.17% to end the session at 13,722.02 points.
On the currency front, the dollar was last up 0.01% on sterling, trading at 78.63p, while it depreciated 0.01% against the euro to 91.11 euro cents.
It also slipped 0.03% against the yen, changing hands at JPY 143.68.
“US stocks have failed to display the same positive attitude as that of Europe today, with opening gains rapidly giving way to more losses,” said IG chief market analyst Chris Beauchamp earlier.
“With China’s inflation data behind them, the focus now turns to tomorrow’s US data.
“This is giving traders an excuse to dump stocks again, in an attempt to lock in profits ahead of what appears to be the first real pullback in US equities for months.”
China’s economic struggles intensify amid decline in exports and deflation
On the economic front, China experienced deflation in July as consumer prices plunged by 0.3% on a year-on-year basis, contrasting the 0.2% increase observed in June.
The decrease was significantly impacted by a sharp transition in food inflation, which plummeted from a growth of 2.3% to a decline of 1.7%.
That inflation data came on the back of data from China’s customs administration earlier in the week, which unveiled a steeper-than-anticipated fall in trade activities.
Exports in July descended by 14.5%, a sharper fall compared to the 12.4% drop in June and surpassing the consensus estimate of a 13.2% decline.
Imports also registered a considerable decline, dropping by 12.4% in July, following a 6.8% dip in the preceding month.
While Wednesday remained relatively quiet on the global economic data front, market analysts and stakeholders were shifting their focus towards key data releases from the United States and the United Kingdom.
US inflation and unemployment claim figures were slated for a Thursday release, while the UK’s GDP will be under the spotlight on Friday.
Predictions suggested a rise in US annual CPI inflation to 3.3% for July, an increment from the 3% recorded in June.
Additionally, unemployment claims were projected to marginally rise to 230,000 from the prior figure of 227,000.
Lyft and Roblox stumble, Penn Entertainment shines
In equities, ridesharing giant Lyft saw its shares plummet by 10.03% following its second-quarter earnings release late Tuesday.
The report highlighted a modest top-line growth of merely 3%, reflecting the challenges Lyft was facing in its ongoing pricing competition with primary rival Uber.
That competitive pricing strategy also translated into a decline in revenue per active user for the quarter, which dropped 5% to $47.51.
Despite the unfavourable results, Credit Suisse was backing Lyft with an ‘outperform’ rating, though the firm had revised its target price downward from $23 to $18.
In the gaming sector, Roblox Corporation dived 21.94% after its second-quarter earnings failed to meet market expectations.
Notably, the daily active user count experienced a 1% dip.
Furthermore, while customers collectively spent 14 billion hours on the Roblox platform during the three months ended 30 June, that figure fell short of the projected 14.4 billion hours.
On the upside, Penn Entertainment emerged as a notable gainer, leaping 9.1% on the heels of its announcement of a strategic partnership with the Disney-owned ESPN.
As part of the collaboration, a new ESPN Bet sportsbook would be rolled out across 16 states later in the year.
Thursday newspaper round-up: China, Natural gas, Softbank
Joe Biden on Wednesday signed an executive order that will narrowly prohibit certain US investments in sensitive technology in China and require government notification of funding in other tech sectors. The long-awaited order authorises the US treasury secretary to prohibit or restrict certain US investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems. – Guardian
Oleksiy Chernyshov, the chief executive of Ukraine’s largest oil and gas company Naftogaz, wants Europe to store its gas in war-torn Ukraine. Naftogaz believes it can become the “power bank of Europe”, he says, despite the conflict. “I would like to underline that the infrastructure we are using is underground,” he adds down the line from Kyiv as a missile alarm sounds in the background. – Daily Telegraph
SoftBank is in talks with Amazon to become a lead investor in Arm’s blockbuster listing in New York next month – just a day after the chip maker posted a loss. The Japanese conglomerate, which snapped up the Cambridge firm in 2016, has been ramping up efforts to secure investment for its upcoming £55billion initial public offering on the Nasdaq. Online retail giant Amazon is reportedly eyeing an anchor investment which would provide key backing for the float. – Daily Mail
The industrial manufacturer headed by Nat Rothschild, the prominent financier, has been picked as Tesla’s electric car charging partner in the US. Volex, which employs 8,000 people in 22 countries, will supply connectors to Tesla’s electric vehicle (EV) charging points as they are rolled out in the US. Volex said it was ‘stocked and ready’ to immediately supply it. Analysts at Peel Hunt said: ‘This confirms Volex’s strong position in the global EV charging market.’ – Daily Mail
Lotus Cars is on the road to producing a record number of sports cars from its factory on an old airfield in the Norfolk countryside. The Hethel assembly line of the 75-year-old motoring marque, forever linked to Colin Chapman, its maverick founder and design engineer, rolled out 2,200 of the Lotus Emira, its latest and last petrol production sports car, in the first half of this year. With strong demand reckoned to be in the high thousands, it is likely that by the end of the year it will hit an all-time Lotus record of 5,000 units produced. – The Times
