Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
London open: FTSE nudges up as investors mull GDP data
London stocks edged up in early trade on Wednesday as data showed the UK economy returned to growth in January.
At 0830 GMT, the FTSE 100 was 0.1% higher at 7,753.05, having surged on Tuesday.
Figures released earlier by the Office for National Statistics showed that gross domestic product rose 0.2% on the month in January, in line with expectations, following a 0.1% decline in December.
In the final three months of 2023, GDP fell 0.3%, having contracted by 0.1% in the previous three months, dipping the economy into a technical recession.
Services output grew by 0.2% in January and was the largest contributor to the rise in GDP, the ONS said. Production output declined by 0.2% in January, while construction output was up 1.1%.
The data showed that in the three months to January, GDP fell by 0.1% compared with the three months to October 2023. Services output showed no growth during the period, while production output fell by 0.2% and construction output also fell, by 0.9%.
ONS statistician Liz McKeown said: “The economy picked up in January with strong growth in retail and wholesaling. Construction also performed well with housebuilders having a good month, having been subdued for much of the last year.
“These were partially offset by falls in TV and film production, lawyers and the often-erratic pharmaceutical industry.
“Over the last three months as a whole, the economy contracted slightly.”
In equity markets, Flutter Entertainment was the top gainer on the FTSE 100 after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan Cazenove.
Infrastructure group Balfour Beatty rose as it lifted its dividend and announced a £100m share buyback.
On the downside, Ferrexpo slumped after the miner said late on Tuesday that it needed more time to finalise its full-year results due to a legal claim against its unit in Ukraine.
South America-focused miner Hochschild was also in the red as it reported a 10% fall in production, offset by rising prices and the devaluation of the Argentinian peso which helped to lift adjusted core earnings. The company said adjusted EBITDA came in at $274.4m, up 10%. Revenues fell 6% to $693.7m.
4Imprint lost ground as it lifted its dividend by a third after a big jump in profits in 2023 on the back of market-share gains, but warned of a “softening” in the wider market towards the end of the year.
InterContinental Hotels was knocked lower by a downgrade to ‘hold’ from ‘buy’ at Jefferies.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Carnival Plc | +2.88% | +32.50 | 1,160.50 |
| 2 |  |
Glencore Plc | +1.98% | +7.90 | 407.85 |
| 3 |  |
Flutter Entertainment Plc | +1.57% | +270.00 | 17,485.00 |
| 4 |  |
United Utilities Group Plc | +1.39% | +14.50 | 1,055.50 |
| 5 |  |
National Grid Plc | +1.16% | +12.00 | 1,048.00 |
| 6 |  |
Ferguson Plc | +1.01% | +160.00 | 15,930.00 |
| 7 |  |
Crh Plc | +0.98% | +64.00 | 6,570.00 |
| 8 |  |
British American Tobacco Plc | +0.95% | +22.50 | 2,389.00 |
| 9 |  |
Hsbc Holdings Plc | +0.93% | +5.50 | 598.10 |
| 10 |  |
Antofagasta Plc | +0.91% | +16.50 | 1,834.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | -2.11% | -9.80 | 454.50 |
| 2 |  |
Persimmon Plc | -1.70% | -22.50 | 1,301.50 |
| 3 |  |
Bhp Group Limited | -1.52% | -33.50 | 2,171.50 |
| 4 |  |
Rentokil Initial Plc | -1.29% | -6.40 | 488.40 |
| 5 |  |
Wpp Plc | -1.20% | -8.60 | 711.00 |
| 6 |  |
Hikma Pharmaceuticals Plc | -1.15% | -22.00 | 1,896.00 |
| 7 |  |
Intercontinental Hotels Group Plc | -1.09% | -92.00 | 8,314.00 |
| 8 |  |
Rio Tinto Plc | -1.07% | -52.50 | 4,861.50 |
| 9 |  |
Informa Plc | -0.96% | -7.80 | 801.60 |
| 10 |  |
St. James’s Place Plc | -0.96% | -4.30 | 443.30 |
US close: S&P 500 hits another record as investors shrug off inflation surprise
US stocks rose strongly on Tuesday with the S&P 500 notching yet another record close as investors largely shrugged off an unexpected pick-up in inflation, holding on to hopes that the data won’t derail the Federal Reserve’s plans to soon start cutting interest rates.
The S&P 500 rose 1.12% to a new closing high of 5,175.27, extending the year-to-date rally to 9.12%. The Dow gained 0.61% while the Nasdaq jumped 1.54%.
According to the Department of Labor, headline consumer prices increased at a 0.4% month-on-month pace in February, which served to push the year-on-year rate of increase from 3.1% in January to 3.2%, despite economists’ expectations for no change. Core CPI also rose, up by 0.4% month-on-month, while the annual rate inched lower to 3.8% from 3.9%, albeit still higher than the 3.7% expected by the market.
February’s producer price index was slated for release on Thursday, with the two key pieces of inflation data marking some of the last major macro data points scheduled for release ahead of the Federal Reserve’s next monetary policy meeting on 19 March.
Meanwhile, other data from the National Federation of Independent Business showed that inflation was still a concern for many small business owners, with 23% citing price pressures as their single most important business problem in operating their business in February, up from 20% the month before and overtaking labour quality as the biggest risk.
Despite the negative data, traders were undeterred, as markets moved higher following the releases on hopes the upside surprise won’t alter market expectations for a rate-cut by the Fed sometime in the first half of the year.
“The narrative that inflation would melt away almost as quickly as it flared up always felt too good to be true, but those last few percentage points are proving stubbornly sticky in the US where the economy has kept on trucking despite high interest rates which are beginning to take their toll on American households,” says Danni Hewson, head of financial analysis at AJ Bell.
“Hopes that the Federal Reserve might feel its hand is ready to twist before the summer have been fading for a while, but markets are still betting the call will come in the first half of this year and that the soft landing is still in sight.”
Market movers
Oracle shares surged nearly 12% after its fourth-quarter earnings topped Wall Street estimates as its cloud services and license support segment saw a 12% increase in revenues.
Investors of 3M gave a warm welcome to the news of a new chief executive with the former head of L3Harris Technologies expected to join the group in May, with the stock popping 5%.
Airlines were mostly lower with Boeing down 5% on reports of failed audits on its 737 Max plane, following the mid-air disaster during an Alaska Airlines flight in January that saw a side panel fly off the aircraft.
Meanwhile, Southwest dropped 15% after the carrier revealed it was having to “reevaluate” its guidance for 2024 due to delivery delays from Boeing.
Wednesday newspaper round-up: Post Office, Workplace AI, Barclays
Ministers will publish legislation to quash the convictions of hundreds of post office operators who were prosecuted during the Horizon scandal, marking a significant victory for victims after decades of campaigning. The legislation on Wednesday will automatically overturn convictions of theft, fraud and false accounting that were handed down in connection with Post Office business during that period. It will cover prosecutions brought by the Post Office and the Crown Prosecution Service in England and Wales between 1996 and 2018. – Guardian
Exposure to new technologies including trackers, robots and AI-based software at work is bad for people’s quality of life, according to a groundbreaking study from the the Institute for Work thinktank. Based on a survey of more than 6,000 people, the study analysed the impact on wellbeing of four groups of technologies that are becoming increasingly prevalent across the economy. – Guardian
Morrisons plunged to a £1bn loss last year amid a surge in debt interest payments linked to its private equity takeover. The supermarket chain, which was acquired by Clayton, Dubilier & Rice (CD&R) for £10bn in 2021, fell deeper into the red for the year ending October 2023 as finance costs grew. Accounts for Morrison’s parent company, Market Topco, show the group made a pre-tax loss of £1.1bn last year after racking up £735m in interest costs. – Telegraph
Households face paying almost £200 extra on their energy bills under plans to keep Britain’s lights on by building more gas-fired power stations. Experts said the policy, announced by Rishi Sunak on Tuesday, would result in a bill of around £5bn for consumers, equivalent to £178 per household, most likely spread over a decade or more. – Telegraph
A top hedge fund has amassed a bet worth almost £200 million against shares in Barclays despite a recent rally in the bank’s stock price on hopes that the chief executive CS Venkatakrishnan will revive the lender’s fortunes. The short position built by Qube Research & Technologies equates to 0.73 per cent of Barclays’s issued share capital and is the biggest ever disclosed against the bank. It suggests that Qube believes the share price rise, fuelled by a turnaround plan set out by the Barclays boss last month, will run out of steam. – The Times
