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London open: Stocks edge up in quiet trade; Superdry tumbles
London stocks edged higher in early trade on Tuesday, with the Christmas lull well and truly upon us, as investors mulled the latest policy announcement from the Bank of Japan.
At 0845 GMT, the FTSE 100 was 0.3% firmer at 7,634.80.
Neil Wilson, chief market analyst at Finalto, said: “Stocks are a bit firmer this morning after a mainly upbeat session on Wall Street and gains for the Nikkei overnight on continued Bank of Japan dovishness.”
The BoJ announced earlier that it was keeping short-term interest rates at -0.1% as it continues to encourage banks to lend more and kickstart an economic recovery, but said it was keeping a close eye on price and wage movements before it considers tightening monetary policy.
Policymakers voted unanimously to keep rates unchanged, as widely expected, and said they would continue to purchase government bonds without setting an upper limit so that 10-year bond yields remains around 0% with an upper bound of 1.0%.
On the UK corporate front, news was scarce but Flutter Entertainment was boosted by an upgrade to ‘buy’ at Peel Hunt.
On the downside, music rights investor Hipgnosis Songs Fund fell as it delayed publication of its interim results. The results were due on Tuesday but have been pushed back to the end of December after the board expressed concerns about the value of the company’s assets.
Hipgnosis said an independent valuation was “materially higher than the valuation implied by proposed and recent transactions in the sector”.
Clothing retailer Superdry tumbled as it issued a profit warning, saying it was hit by a challenging trading environment and warm weather.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +2.99% | +21.80 | 749.80 |
| 2 |  |
Fresnillo Plc | +2.34% | +13.00 | 568.00 |
| 3 |  |
Johnson Matthey Plc | +1.94% | +32.00 | 1,679.50 |
| 4 |  |
Flutter Entertainment Plc | +1.93% | +260.00 | 13,705.00 |
| 5 |  |
Croda International Plc | +1.60% | +80.00 | 5,080.00 |
| 6 |  |
Severn Trent Plc | +1.58% | +41.00 | 2,641.00 |
| 7 |  |
Whitbread Plc | +1.36% | +48.00 | 3,583.00 |
| 8 |  |
Spirax-sarco Engineering Plc | +1.34% | +135.00 | 10,245.00 |
| 9 |  |
Rightmove Plc | +1.19% | +6.60 | 562.80 |
| 10 |  |
United Utilities Group Plc | +1.07% | +11.50 | 1,089.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Burberry Group Plc | -1.25% | -19.00 | 1,495.50 |
| 2 |  |
Direct Line Insurance Group Plc | -0.93% | -1.75 | 187.15 |
| 3 |  |
Vodafone Group Plc | -0.79% | -0.53 | 66.70 |
| 4 |  |
Bae Systems Plc | -0.75% | -8.00 | 1,060.50 |
| 5 |  |
Bp Plc | -0.51% | -2.35 | 462.85 |
| 6 |  |
St. James’s Place Plc | -0.50% | -3.40 | 677.40 |
| 7 |  |
Centrica Plc | -0.49% | -0.70 | 141.35 |
| 8 |  |
Imperial Brands Plc | -0.47% | -8.50 | 1,811.00 |
| 9 |  |
Admiral Group Plc | -0.41% | -11.00 | 2,659.00 |
| 10 |  |
Shell Plc | -0.34% | -8.50 | 2,528.50 |
US close: Stocks rise, Dow inches higher for fourth straight record close
US stocks finished higher on Monday, though gains for the Dow were only modest with the index already at record highs, as investors continued to digest mixed messages from Federal Reserve policymakers about the interest-rate outlook.
The Dow Jones Industrial Average finished just 0.86 points higher but still managed to set a new all-time high of 37,306.02, its fourth record in a row, while the Nasdaq gained 0.6% and the S&P 500 rose 0.5%
Goldman Sachs on Monday raised its forecast for the S&P 500 for next year to 5,100 from 4,700 last month. The index now just stands just 1.1% away from its record high of 4,796.56 reached in January 2022
Investor sentiment turned positive late last week after Federal Reserve chairman Jerome Powell seemingly indicated that three short-term interest rate cuts were expected to take place in 2024 amid cooling inflation. However, central bankers have come out to temper expectations that rates would be lowered anytime soon.
On Friday, New York Fed president John Williams and Atlanta Fed head Raphael Bostic both dampened growing optimism around sooner-than-expected rate cuts: Williams said it was too early for policymakers to begin thinking about lowering borrowing costs; while Bostic stated he foresees two rate cuts in 2024, but not starting until the third quarter.
In contrast, speaking on Monday, San Francisco Fed president Mary Daly said her own expectations for rates were “very close” to the dotplot graph released last week, which signalled three rate cuts in 2024. She acknowledged that the Fed would still keep financial conditions “quite restrictive even if we [cut] three times next year.”
On the macro front, the National Association of Housebuilders’ housing market index edged up to 37 in December, up from an almost 12-month low of 34 in November and beating forecasts for a reading of 36. Homebuilder sentiment rose for the first time in five months, boosted by falling mortgage rates and recent economic data that seems to indicate that housing conditions have improved heading into 2024.
Meanwhile, oil prices rose on the back of rising disruption in the Red Sea as tankers and shipping companies pause shipments through the region after a series of attacks by Yemen’s Houthi rebels, who are calling for a full ceasefire in Gaza. BP on Monday joined a series of companies to suspend shipments, as the price of WTI crude gained 1.7% to $72.62 a barrel.
M&A news moves US Steel and Adobe
US Steel jumped by a quarter after Japanese steelmaker Nippon Steel agreed to buy the company for around $14.1bn. Under the terms of the deal, Nippon will pay $55 per share in cash, which is a 40% premium to the closing US Steel share price on Friday.
Adobe finished higher after the software company and cloud-based design platform Figma mutually agreed to end their planned $20bn merger amid opposition from UK and EU regulators. Under the terms of the deal, Adobe will pay Figma a termination fee of $1bn.
US software giant IBM was in positive territory after announcing it is spending €2.13bn to buy two enterprise technology platforms from Software AG.
VF Corporation, the owner of apparel brands Vans, The North Face and Timberland, sunk nearly 8% after saying that it has detected “unauthorised” activity in its IT systems which has led to the loss of personal data. The incident is expected to have a “material” effect on operations until recovery efforts are completed, but it is not yet known what financial impact the attack will have.
Tuesday newspaper round-up: Sellafield, Google, Audi
The GMB trade union has called on the government and nuclear authorities to take “urgent action” to address concerns over safety at Sellafield. The union has written to the energy minister, the Nuclear Decommissioning Authority (NDA) and Sellafield’s chief executive to demand greater investment into keeping the 11,000 employees at the vast nuclear rubbish dump in Cumbria safe. – Guardian
Google has agreed to pay US$700m and to allow for greater competition in its Play app store, according to the terms of an antitrust settlement with US states and consumers disclosed in a San Francisco federal court. Google was accused of overcharging consumers through unlawful restrictions on the distribution of apps on Android devices and unnecessary fees for in-app transactions. It did not admit wrongdoing. – Guardian
Audi will hit the brakes on its rollout of electric car models as consumer enthusiasm wanes in the face of high prices compared to petrol models. Gernot Döllner, the boss of the Volkswagen-owned brand, said that he wants to avoid flooding dealerships and factories with the vehicles as sales slow. – Telegraph
The Telegraph’s independent directors have alerted the government to possible financial irregularities in the accounts of the Barclay family’s media assets. The directors drafted in to steer the newspaper during a tussle over its future have highlighted what they claim is evidence of historic issues in the company accounts. – The Times
Apple plans to suspend the sale of two of its popular smartwatch models in the United States after losing a patent dispute. The Silicon Valley giant lost a case over the technology its smartwatches use to monitor people’s pulse rate. The International Trade Commission ruled in October that some of Apple’s devices infringed on patents held by Masimo, a medical technology company also based in California. – The Times
