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London open: Stocks flat but Vodafone jumps on Swisscom de
London stocks were steady in early trade on Friday as investors continued to mull another hotter-than-expected US inflation reading, but Vodafone surged on news Swisscom is buying its Italian business.
At 0830 GMT, the FTSE 100 was flat at 7,741.26.
Richard Hunter, head of markets at Interactive Investor, said: “Investor inflation jitters have not been far from the surface over recent months and the latest release resulted in markets touching on the brakes.
“The wholesale producer price index showed a reading at the headline level of 0.6% against an expected 0.3%, while the core figure which excludes food and energy came in at 0.3%, marginally above estimates of 0.2%.
“The economic picture was further complicated by a rise of 0.6% in retail sales, albeit slightly shy of estimates, implying that consumer strength remains intact. While the figures were far from startling, investors nonetheless needed to reassess both whether there is any possibility of inflation accelerating once more, and the knock-on impact that would have on the Federal Reserve’s decision to reduce interest rates. As such, the Fed’s policy meeting next week will assume extra significance given this latest data release.”
In equity markets, Vodafone rallied as it emerged that Swisscom will take over the London-listed company’s Italian unit for €8bn, creating the country’s second-largest broadband provider.
Volution Group was the top gainer on the FTSE 250 as it said full-year earnings per share were set to be ahead of consensus expectations following a “strong” first half.
Heat treatment and thermal processing services specialist Bodycote rose as it delivered an increase in annual profits, driven by a strong performance at its aerospace and defence division.
Scottish Mortgage Investment Trust advanced after saying it was making at least £1bn available for buybacks over the next two years.
British Airways and Iberia owner IAG flew higher after upgrades to ‘outperform’ at both Raymond James and at BNPP Exane.
Sticking with broker notes, Mondi was lifted by an upgrade to ‘buy’ from ‘hold’ at Jefferies, while Smurfit gained after an upgrade to ‘overweight’ at Morgan Stanley.
British Land and Derwent London were both up after upgrades to ‘buy’ at Shore Capital.
Elsewhere, Barratt and Redrow dipped after the UK’s competition regulator said it was taking an initial look into Barratt’s £2.52bn takeover of its homebuilding rival.
Berkeley Group was little changed as it reiterated its full-year outlook and said it had secured the bulk of sales for the next financial year.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
International Consolidated Airlines Group S.a. | +4.63% | +6.90 | 155.85 |
| 2 |  |
Vodafone Group Plc | +4.01% | +2.65 | 68.74 |
| 3 |  |
Direct Line Insurance Group Plc | +2.87% | +6.00 | 215.00 |
| 4 |  |
Admiral Group Plc | +2.42% | +65.00 | 2,748.00 |
| 5 |  |
Fresnillo Plc | +2.07% | +9.60 | 474.00 |
| 6 |  |
Scottish Mortgage Investment Trust Plc | +1.95% | +15.20 | 796.20 |
| 7 |  |
Smurfit Kappa Group Plc | +1.66% | +58.00 | 3,550.00 |
| 8 |  |
St. James’s Place Plc | +1.54% | +6.60 | 435.00 |
| 9 |  |
Centrica Plc | +1.46% | +1.90 | 131.65 |
| 10 |  |
Antofagasta Plc | +1.36% | +26.00 | 1,936.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Intertek Group Plc | -1.64% | -81.00 | 4,865.00 |
| 2 |  |
Anglo American Plc | -1.40% | -25.60 | 1,808.00 |
| 3 |  |
Smith & Nephew Plc | -1.34% | -14.50 | 1,069.00 |
| 4 |  |
Bhp Group Limited | -1.27% | -28.00 | 2,173.50 |
| 5 |  |
Halma Plc | -1.25% | -28.00 | 2,217.00 |
| 6 |  |
Carnival Plc | -1.21% | -14.00 | 1,144.00 |
| 7 |  |
Flutter Entertainment Plc | -1.06% | -185.00 | 17,275.00 |
| 8 |  |
Spirax-sarco Engineering Plc | -0.95% | -100.00 | 10,480.00 |
| 9 |  |
Experian Plc | -0.87% | -29.00 | 3,322.00 |
| 10 |  |
Compass Group Plc | -0.86% | -19.00 | 2,188.00 |
US close: PPI data dampens stocks as investors eye Fed meeting
US stocks finished with moderate losses on Thursday after another round of inflation statistics surprised to the upside, clouding the outlook for interest rates in the near term.
The Dow finished 0.4% lower while the S&P 500 and Nasdaq both fell 0.3%, while 10-year US Treasury yields surged from 4.191% to 4.297%.
February’s US producer price index advanced 0.6% last month, double the increase economists had been expecting, while the year-on-year change picked up to 1.6% from 1.0% previously.
The data came ahead of the Federal Reserve’s next monetary policy meeting on 19 and 20 March and followed a hotter-than-expected reading of US consumer price inflation earlier in the week.
“Today’s stronger PPI readings in the US couple with the CPI figures earlier in the week to suggest the Fed’s tone next week might not be quite what investors were hoping for,” said Chris Beauchamp, market analyst at IG.
Matthew Martin, US economist at Oxford Economics, said the two releases “reduce our subjective odds that the Fed will begin its easing cycle at the May Federal Open Market Committee meeting, as is the case in our baseline.”
However, he added: “With broader evidence of decelerating wage growth and further disinflation in the pipeline from market rents, we still believe the Fed will begin cutting rates around mid-year.”
In other macro news, jobless claims dipped unexpectedly last week. According to the Department of Labor, in seasonally adjusted terms the number of initial unemployment claims slipped by 1,000 over the week ending on 9 March to 209,000. Economists had anticipated a rise to 218,000.
Meanwhile, the Department of Commerce reported that retail sales volumes grew 0.6% in January to reach $700.7bn in seasonally adjusted terms. Economists had pencilled-in an increase of 0.8%.
Market movers
Shares in American steel producer US Steel was under pressure on Thursday after president Joe Biden said he’s opposed to its $14.9bn takeover by Japan’s Nippon Steel. In prepared remarks, Biden said that is “vital” for an American steel company to be domestically owned and operated.
Under Armour tanked 11% after investors gave a negative reaction to the news that founder Kevin Plank was returning o become chief executive, having stepped aside as CEO to be the company’s chair since 2019. This will be the third CEO change in just five years.
Dick’s Sporting Goods jumped 15% after bumper holiday season trading beat expectations. The retailer said fourth-quarter net sales jumped 7.8% to $3.88bn – its largest-ever sales quarter – while net income rose 26% to $296m and earnings per diluted share increased 31% to $3.85.
Friday newspaper round-up: Unilever, civil servants, Wegovy
Unilever could face a potential row with shareholders after it emerged that the new boss of the consumer goods company can earn up to €17.4m (£14.9m) this year if he hits maximum targets. Hein Schumacher, who joined the owner of Marmite, Domestos and Dove in June last year, took home €3.9m for his first six months as chief executive. He earned a €1.86m annual bonus on top of his €1.4m in basic pay and benefits, which included €292,492 to help cover his relocation to the UK, according to Unilever’s annual report published on Thursday. – Guardian
Thousands of people in the UK are being deemed incapable of any work every month due to mental health problems, figures have shown. According to official data published by the Department for Work and Pensions (DWP), at least 20,000 incapacity benefit claims are for mental health problems – making up more than two-thirds of the total. – Guardian
Ministers are planning to crack down on telegraph poles following a community backlash over unsightly broadband infrastructure. Data minister Julia Lopez has written to network operators including BT’s Openreach and Virgin Media O2 urging them to curb the installation of new telegraph poles as they expand full-fibre services. – Telegraph
Civil servants at Britain’s official statistics body have threatened to go on strike after being asked to work in the office for two days a week. More than 1,000 employees at the Office for National Statistics (ONS) are being balloted over strike action after bosses told them to stop working from home full time. – Telegraph
Surging demand for Wegovy has helped the Danish economy to dodge recession, with the country’s growth last year almost entirely driven by Novo Nordisk, the pharmaceuticals group behind the weight-loss jab. Official figures from Denmark’s statistics agency show that the country’s drugs industry, which is dominated by Novo Nordisk, powered the economy’s 1.8 per cent growth in 2023, helping Denmark to avoid the stagnation that has affected most European economies. – The Times
