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London open: Stocks nudge up ahead of BoE announcement
London stocks nudged up in early trade on Thursday, with all eyes on the Bank of England policy announcement amid hopes of a summer rate cut.
At 0840 BST, the FTSE 100 was up 0.1% at 8,358.68.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 hasn’t been knocked off its course with positive winds still largely blowing around the index.
“Although there will be a certain amount of treading water ahead of the interest rate decision from the Bank of England, upbeat trade data from China is keeping optimism flowing. Exports grew by more than expected in April, increasing by 1.5% as customers in key markets around the world demonstrated more appetite for Chinese made goods. This has not only sparked fresh hopes of a steadier recovery for China’s economy, but also may be seen as a measure of more confidence in other economies where interest rate cuts are eyed on the horizon.
“Although the Bank of England is set to keep rates on hold yet again later, hopes are high that a summer interest rate cut will be on the agenda. Even though the Bank is set to stay in a holding pattern for now, there will be huge interest in the voting split between policymakers and the accompanying quarterly monetary policy report. Expectations are centring around an interest rate cut in August but if more than one policymaker votes for a rate cut, it will spark greater hopes that a cut could come earlier in June. Likewise, if the Bank forecasts that inflation may be weaker in the months ahead than it flagged previously and gives a lacklustre forecast for economic growth, markets may price in more interest rate cuts this year, expecting a shift around the table at the next meeting. What will be key to watch is the Bank’s expectations for the labour market, as the stubbornness of wage growth has been a worry for policymakers.”
The BoE announcement is at midday.
In equity markets, IMI gained as the specialist engineering firm said trading remained in line with expectations as first-quarter revenue rose 4% year on year.
Weapons maker BAE Systems ticked higher as it held annual guidance and said global geopolitical tensions should boost orders as countries increased defence spending. The group still expects sales to rise 10% to 12% above 2023’s £25bn and for underlying earnings before interest and tax to be 11% to 13% higher than the £2.7bn posted last year.
Harbour Energy and broadcaster ITV were also in the black after trading updates.
On the downside, telecoms group Airtel Africa slumped after saying it was hit hard by a drop in the Nigerian naira in the year to 31 March, with a $549m negative FX headwind pushing it into the red on a pre-tax basis. The company swung to a reported pre-tax loss of $89m, from a profit of $750m the year before, while reported revenues sank 5.3% to $4.98bn.
3i Group fell despite hailing “strong” full-year results supported by resilient growth in its portfolio companies.
Hipgnosis Song Fund lost ground as Concord said it would not increase its $1.25 per share offer for the company, clearing the path for Blackstone to take it over.
HSBC, Admiral, Petershill Partners, SThree and Ibstock all fell as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Itv Plc | +1.68% | +1.25 | 75.60 |
| 2 |  |
Direct Line Insurance Group Plc | +1.41% | +2.70 | 193.80 |
| 3 |  |
Johnson Matthey Plc | +1.23% | +23.00 | 1,893.00 |
| 4 |  |
Carnival Plc | +1.11% | +11.50 | 1,048.50 |
| 5 |  |
Rightmove Plc | +1.00% | +5.60 | 566.40 |
| 6 |  |
Ashtead Group Plc | +0.93% | +54.00 | 5,842.00 |
| 7 |  |
Bp Plc | +0.80% | +4.00 | 504.50 |
| 8 |  |
Phoenix Group Holdings Plc | +0.79% | +4.00 | 512.50 |
| 9 |  |
Diageo Plc | +0.78% | +22.00 | 2,830.00 |
| 10 |  |
Hargreaves Lansdown Plc | +0.68% | +5.60 | 823.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hsbc Holdings Plc | -3.82% | -27.50 | 693.30 |
| 2 |  |
3i Group Plc | -3.77% | -112.00 | 2,862.00 |
| 3 |  |
Admiral Group Plc | -1.91% | -53.00 | 2,720.00 |
| 4 |  |
Hiscox Ltd | -1.11% | -13.00 | 1,157.00 |
| 5 |  |
Melrose Industries Plc | -1.06% | -6.40 | 599.00 |
| 6 |  |
Sse Plc | -0.87% | -15.50 | 1,774.50 |
| 7 |  |
British Land Company Plc | -0.76% | -3.20 | 415.40 |
| 8 |  |
Flutter Entertainment Plc | -0.72% | -115.00 | 15,945.00 |
| 9 |  |
Smith & Nephew Plc | -0.69% | -7.00 | 1,000.50 |
| 10 |  |
Spirax-sarco Engineering Plc | -0.66% | -60.00 | 9,095.00 |
US close: Dow Jones extends winning streak
Wall Street stocks turned in a mixed performance on Wednesday as corporate earnings continued to dominate markets.
At the close, the Dow Jones Industrial Average was up 0.44% at 39,056.39, while the S&P 500 was flat at 5,187.67 and the Nasdaq Composite saw out the session 0.318% weaker at 16,302.76.
The Dow closed 172.13 points higher on Wednesday, extending gains recorded in the previous session and giving the blue-chip index a sixth straight winning session.
Earnings were again in focus on Wednesday, with ridesharing giant Lyft and hotel operator Wynn Resorts trading higher on the back of stronger-than-expected quarterly results, while Reddit shares rallied following its first earnings as a public company.
Shopify earnings topped estimates but shares still headed south following weaker-than-expected guidance, Uber revealed it had swung to a quarterly loss despite reporting improved quarterly revenues, Airbnb beat on earnings expectations but issued some weak guidance, and AMC also bested projections thanks to the likes of Dune 2 and Kung Fu Panda 4.
On the macro front, mortgage applications rose by 2.6% in the week ended 3 May, according to the Mortgage Bankers Association of America, recovering from a 2.3% decline in the previous week and snapping a two-week-long streak of sharp declines. Applications for mortgages to purchase a new home rose by 1.8%, while applications to refinance a home jumped by 4.5%
Elsewhere, US wholesale inventories decreased by 0.4% month-on-month in March, matching preliminary estimates and following a downwardly revised 0.2% rise in February. Non-durables stocks saw a decrease of 1.1%, mainly on account of farm products, while inventories of durable goods fell 0.1% in March, according to the Census Bureau.
Thursday newspaper round-up: Tax rises, smart meters, Selfridges
The next government will be forced to hit voters with post-election tax rises and delay net zero investment unless it is prepared to rip up Treasury rules for managing the state finances, a leading thinktank has said. The National Institute for Economic and Social Research (Niesr) called for a radical overhaul of the self-imposed constraints imposed on government borrowing and debt as it warned that persistently weak growth and lower inflation would make hitting the rules more difficult. – Guardian
The boss of British Gas has called for households to face mandatory smart meter installations weeks after government figures showed that almost 4m meters are not working. Chris O’Shea, the chief executive of the British Gas owner Centrica, told a committee of MPs that smart meters should be installed in all homes through a “street by street” programme, in order to cut the costs of creating a smart grid. – Guardian
Sir Jim Ratcliffe has called for the ban on all petrol car sales to be delayed beyond 2035, as the British industrial tycoon warns that demand for electric vehicles (EVs) has “dried up”. The billionaire behind petrochemicals giant Ineos is lobbying the UK government to relax net zero laws so that low-emission vehicles can be sold even after the planned cut-off point, as an “interim” step towards cleaner technologies. – Telegraph
A drugs company developing cannabis-based medicines backed by the tobacco group Imperial Brands is to delist from the London stock market, blaming turbulent UK markets for exerting “continuous, irrational and regressive pressure” on its share price. Oxford Cannabinoid Technologies (OCT), a clinical stage biopharma company developing prescription medicines for the pain market, said the “turbulence” in the UK public markets has had a “punitive effect on sentiment in biopharma as a sector, and on quoted biopharma businesses in particular”. – The Times
New job losses at Selfridges have been blamed on the end of VAT-free shopping for tourists and a slowdown in luxury spending. In a memo to staff Andrew Keith, chief executive of the luxury department store group, said the latest round of redundancies was due to the scrapping of tax-free purchases for international visitors. – The Times
