London open: Stocks slip heading into central bank decisions

by | Jul 21, 2023

(Sharecast News) – Stocks were mixed at the start of the session, tracking overnight losses on Wall Street on the back of the latest quarterly results out of Netflix and Tesla.

“US futures are steady, but the markets across the pond remain highly sensitive – a dynamic made worse by sky-high valuations created by a year-to-date rally amid AI excitement,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“European markets are also set for a downbeat open as this weaker sentiment crosses their borders, and imminent economic data and corporate earnings reports have kicked up further tension.”

As of 0900 BST, the FTSE 100 was drifting lower by 0.03% to 7,643.83 and the second-tier index by 0.28% to 19,256.82.

Sterling was flat alongside at 1.2870.

Weekly jobless data released the day before in the US had led to some ‘market chatter’ regarding the risk of more interest rate hikes than anticipated.

Worth noting, over the following week, rate-setters at the Bank of Japan, European Central Bank and Federal Reserve were all due to announce their latest policy decisions.

China’s Politburo was expected by some to announce fresh policy stimulus on 28-30 July, although the extent of the same remained a matter of conjecture.

The latest economic data out on home shores came in mixed.

According to the National Office for Statistics, UK retail sales jumped in June at a month-on-month of 0.7% (consensus: 0.2%).

Non-food store sales did especially well, rising by 1.0% over the month thanks to higher than average temperatures.

Retail sales remained 1.0% below their pre-Covid level, but that was the smallest shortfall since September, said Gabriella Dickens, senior U.K. economist at Pantheon Macroeconomics.

July’s 17% drop in household energy bills would boost real incomes, but families could be expected to either save more or focus on paying down debt.

However, consultancy GfK’s consumer confidence index slumped from a June reading of -25 to -30 in July (consensus: -25).

Public sector net borrowing printed at £18.5bn for June (consensus: £22.0bn).

But Samuel Tombs, chief UK economist at Pantheon, said: “Good news on recent levels of public borrowing will not be celebrated much at the Treasury, given that the outlook for debt interest payments has deteriorated substantially since the Budget.”

HSBC in the market spotlight

HSBC was the focus of some ‘market chatter’ at the end of the week on the back of the shares’ rise to four-year highs.

Liontrust Asset Management said that its its proposed offer for Swiss rival GAM was “full and final”. The UK asset manager that its offer “good and fair”, taking into account the current financial run rate of losses, future contractual liabilities and the restructuring costs needed to bring GAM back into the black.

Glencore reported a 4% decrease in own-sourced copper production in its first half on Friday, mainly due to mining sequences at Collahuasi and Antamina, and lower copper by-products outside the copper department. The FTSE 100 firm said cobalt production increased 5%, while nickel production saw a 20% decline. Ferrochrome production was 9% below the first half of 2022 due to planned smelter offline days, and coal production remained steady. Glencore maintained its full-year production guidance.

FirstGroup said in an update on Friday that its trading performance for the financial year-to-date was in line with the expectations it outlined in June. The FTSE 250 passenger transport operator also said it had completed £70.9m of its £75m on-market share buyback programme, launched last December, adding that on completion, it planned to initiate another buyback of up to £115m of shares, subject to approval at its annual general meeting being held later in the day.

Market Movers

FTSE 100 (UKX) 7,648.93 0.04%
FTSE 250 (MCX) 19,263.79 -0.25%
techMARK (TASX) 4,460.51 -0.20%

FTSE 100 – Risers

Ashtead Group (AHT) 5,582.00p 1.49%
Hargreaves Lansdown (HL.) 922.40p 1.36%
Entain (ENT) 1,274.50p 1.27%
Relx plc (REL) 2,611.00p 1.24%
3i Group (III) 1,972.50p 1.15%
Centrica (CNA) 127.00p 1.07%
Bunzl (BNZL) 2,870.00p 0.74%
Rentokil Initial (RTO) 635.00p 0.70%
Weir Group (WEIR) 1,788.50p 0.65%
Ocado Group (OCDO) 687.20p 0.64%

FTSE 100 – Fallers

Prudential (PRU) 1,060.50p -1.39%
SEGRO (SGRO) 779.60p -1.32%
Flutter Entertainment (CDI) (FLTR) 15,220.00p -1.30%
Rio Tinto (RIO) 5,127.00p -0.91%
Abrdn (ABDN) 234.70p -0.84%
NATWEST GROUP (NWG) 255.00p -0.74%
Mondi (MNDI) 1,321.00p -0.71%
GSK (GSK) 1,377.40p -0.71%
Fresnillo (FRES) 620.80p -0.70%
Land Securities Group (LAND) 657.20p -0.70%

FTSE 250 – Risers

Babcock International Group (BAB) 374.00p 3.43%
Energean (ENOG) 1,135.00p 2.25%
easyJet (EZJ) 483.20p 1.60%
FirstGroup (FGP) 147.20p 1.31%
Wizz Air Holdings (WIZZ) 2,661.00p 1.06%
Oxford Instruments (OXIG) 2,535.00p 1.00%
Hays (HAS) 107.00p 0.94%
Tate & Lyle (TATE) 753.50p 0.94%
Lancashire Holdings Limited (LRE) 604.00p 0.75%
Redrow (RDW) 518.50p 0.68%

FTSE 250 – Fallers

Senior (SNR) 165.00p -2.48%
Allianz Technology Trust (ATT) 265.00p -2.21%
CMC Markets (CMCX) 151.00p -1.95%
CLS Holdings (CLI) 141.60p -1.94%
Synthomer (SYNT) 79.05p -1.92%
Fidelity China Special Situations (FCSS) 205.00p -1.91%
Baltic Classifieds Group (BCG) 196.20p -1.90%
Derwent London (DLN) 2,218.00p -1.86%
Trainline (TRN) 274.80p -1.86%
Schroder Oriental Income Fund Ltd. (SOI) 248.00p -1.78%

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