- FTSE 100 closes up
- Ocado lifted by upgrade
- Banks benefit from rate rise talk
5pm: Footsie finishes ahead
FTSE 100 closed a shade higher as mining, banking and oil stocks led the way.
The UK blue-chip index closed up nearly 12 points, or 0.16%, at 7,516.87
"For once having a small tech sector is proving to be a good thing for the FTSE 100, meaning it has been able to escape the further losses that have plagued growth stocks of late due to the rise in bond yields, though following its drubbing yesterday Ocado has managed a decent bounce," said Chris Beauchamp, chief market analyst at spreadbetting group IG.
"The continued outperformance of sectors such as mining, banks and oil points towards a resurgence of the ‘rebound trade’ for those stocks poised to benefit from an improving global economy and the expected rise in yields and interest rates around the globe, a theme supported by today’s solid ADP report, which itself has prepared investors for a decent NFP number on Friday."
4.04pm: Airlines lifted as markets remain positive
Leading shares remain in positive territory as we head into the close, but off their best levels.
The FTSE 100 is currently up 15.23 points or 0.2% at 7520.38 having earlier climbed to 7529.
On a quiet day for corporate news, analyst upgrades gave some support to the market. Ocado Group PLC (LSE:OCDO), up 3.73%, benefited from a positive recommendation, as did London Stock Exchange Group PLC (LSE:LSEG), 2.32% better.
The prospect of more interest rate rises is good for the banks, with Lloyds Banking Group PLC (LSE:LLOY) lifted by 2.12%.
British Airways owner International Consolidated Airlines Group (LSE:IAG), a volatile stock these days, climbed 1.79% on news that travellers arriving in the UK will now only have to take a lateral flow rather than PCR test.
easyJet plc (LSE:EZJ) is also up 2.12% on the news, helping the mid-cap FTSE 250 to edge up 0.13% to 23,927.
In the US, markets remain mixed, with the Dow Jones Industrial Average higher but the S&P 500 and Nasdaq Composite both in the red.
After the stronger than expected US jobs figures from ADP, there are more signs that the overall economy is holding up.
The service sector PMI from IHS Markit came in a 57.6 in December, just slightly down on November's 58 and marginally ahead of the intial estimate of 57.5.
The strength in services helped make up for a more muted manufacturing performance, so the composite PMI came in at 57, down just slightly from 57.2 in November.
But pricing pressures continue. IHS said soaring wage bills and greater supplier prices led to the steepest increase in cost burdens on record.
Siân Jones, senior economist at IHS Markit, said: “Service sector business activity growth remained strong in December, supporting indications of a solid uptick in economic growth at the end of 2021. Although the expansion in output softened slightly, the flow of new orders picked up, with buoyant client demand rising at the fastest pace for five months.
"The service sector continued to aid overall growth, as the manufacturing sector saw output hampered again by material and labor shortages. The impact of the latter, however, had a burgeoning effect on service providers as job creation rose at only a marginal pace amid challenges keeping hold of staff and enticing new starters.
"Subsequently, soaring wage bills and increased transportation fees drove the rate of cost inflation up to a fresh series high."
2.52pm: US markets cautious ahead of Fed
US stocks started mixed and mainly lower as the prospect of rising interest rates comes back onto the investor radar.
The Dow Jones Industrial Average added around 19 points at 36,819 in early deals in New York. The S&P 500 fell around seven points to stand at 4,785. The Nasdaq shed around 90 at 15,536.
Investors are becoming increasing convinced that the Federal Reserve will raise rates three times in 2022, starting in May, noted analyst Fawad Razaqzada from Thinkmarkets.com.
"This is because inflation has surged to multi-decade highs and the Fed simply cannot allow price pressures to rise further and get out of hand.
"The FOMC has already announced it will be wrapping up its bond purchases by March. Minutes of the Fed’s December meeting, when the central bank announced it would be winding down bond-buying quicker, will be closely watched later on," he added.
The stronger than expected US jobs data from ADP adds to the evidence for a rate rise.
1.20pm: US hirings double the forecast number
US jobs figures have come in much better than expected.
According to the ADP private payroll numbers for December, some 807,000 jobs were added compared to estimates of a figure of 410,000.
The forecasts were for a decline rather than a rise from November's 534,000, itself revised down to 505,000.
This was the fastest pace for seven months.
US ADP Employment Change Dec: 807K (est 410K; prev 534K)
— LiveSquawk (@LiveSquawk) January 5, 2022
The report comes ahead of the widely watched US non-farm payrolls numbers on Friday, and adds more pressure on the Federal Reserve to raise rates.
Craig Erlam, senior market analyst at Oanda, said: "With the Fed minutes still to come later and the US jobs report on Friday, there's plenty to look forward to this week that could lay the groundwork for the rest of the month as far as investors sentiment goes. And with the ADP release massively exceeding expectations on Wednesday - driven by services which made up a large part of the beat - excitement ahead of the NFP on Friday will only grow."
12.50pm: Mid-cap index in the red
Leading shares remain in positive mood but the mid-cap index has dipped into the red.
The domestically focused FTSE 250 is currently down 0.14% at 23,863.61, despite a 15.12% jump in Cineworld Group PLC (LSE:CINE) on continued recovery hopes.
The FTSE 100 however remains ahead, up 11.74 points or 0.16% at 7516.89.
11.45am: US investors await Fed minutes
US stocks are expected to make a mixed start as investors shift out of rate-sensitive tech stocks and into cyclicals ahead of the release of minutes from the Federal Open Market Committee’s most recent meeting, which may indicate future interest rate hikes.
Futures for the Dow Jones Industrial Average rose 0.02% in Wednesday pre-market trading, while the broader S&P 500 index declined 0.07% and those for the tech-heavy Nasdaq 100 fell 0.35%.
After a strong start to the year, stocks also ended mixed on Tuesday, with the Dow gaining 0.59% to a record close of 36,800, while the S&P 500 edged back three points, or 0.06%, to 4,794 and the Nasdaq declined 1.33%, to 15,623.
Richard Hunter, head of markets at interactive investor, said the current thinking was that the Fed would make an initial interest rate hike in March, which has helped push up US Treasury yields.
Back in the UK, the FTSE 100 is now up 14.66 points or 0.2% at 7519.81.
11.35am: Regulator to look at Capita deal
What a difference a day makes.
On Tuesday Capita PLC (LSE:CPI) said it had completed the sale of its Secure Solutions and Services business - whose customers are the emergency services and justice sectors - to NEC Software Solutions UK for £62mln.
The proceeds are earmarked to cut Capita's debt.
But today the Competitions and Markets Authoritiy said it had decided to investigate the completed transaction and had made an initial enforcement order. This effectively means the two businesses have to be run separately until the CMA has decided whether to refer the deal or not.
Capita is down 1.2% on the news.
10.20am: Omicron hits Eurozone growth in December
Over in Europe, and growth fell to a nine month low in December as the Omicron variant spread.
According to the latest IHS Markit report, after a growth spurt in November, the eurozone composite PMI fell to 53.3 last month.
The service sector was hit by the virus while manufacturing continued to suffer supply chain problems.
Pricing pressures remain an issue, with output charges and input costs increasing at the second-sharpest rates on record, surpassed only by those seen in November.
Eurozone #PMI fell to a 9-month low of 53.3 in December (Nov: 55.4), driven by a weakening service sector as #covid cases flared up amid the Omicron variant. Growth fell across the region, especially in ???????? where output stalled. Read more: https://t.co/jueAnfV8uE pic.twitter.com/s1AjeYZeC3
— IHS Markit PMI™ (@IHSMarkitPMI) January 5, 2022
Joe Hayes, senior economist at IHS Markit said: “The accelerated expansion in output we saw in November unfortunately turned out to be brief. Amid a resurgence of COVID-19 infections across the euro area, growth slowed to the weakest since March in December.
"In Germany, where measures to combat COVID-19 have been more stringent than other monitored euro area countries, levels of economic activity broadly stagnated in December. Nonetheless, slower growth was seen across the board.
“The spread of the Omicron variant had a particularly profound impact on the services sector, reflecting renewed hesitancy among customers due to the novel strain of the virus. Looser travel restrictions in recent months had facilitated greater levels of tourism, which in turn provided additional support to the eurozone service sector. However, this was withdrawn in December as overseas demand declined for the first time since May.
“There was also little to cheer with regards to inflation. Although there was a marginal easing of price pressures, we’re still in excessively hot territory – increases in both input and output costs were the second-quickest on record
“As euro area nations deal with the latest developments in the pandemic, it’s clear that risks to the economy are now greater as tighter restrictions to curb the spread of COVID-19 are more likely than they have been recently.”
9.21am: BP and Shell climb despite dip in crude prices
Investors have turned more positive after a negative start.
The FTSE 100 is now up 8.69 points or 0.12% at 7513.84 having earlier fallen to 7484.
On a fairly quiet corporate news day (surprise), some broker recommendations are providing support.
Apart from the previously mentioned positive updates on Ocado Group PLC (LSE:OCDO) and Intercontinental Hotels Group PLC (LSE:IHG), an upgrade from Citigroup has lifted London Stock Exchange Group PLC (LSE:LSEG) by 3.08%.
Building materials group Ferguson PLC (LSE:FERG) is 0.68% better after Berenberg moved from hold to buy.
Oil companies are also helping the recovery despite a dip in the crude price as OPEC+ stuck with its plans to increase production by 400,000 barrels a day in February.
Neil Wilson, chief market analyst at Markets.com, said: "The implication is that the cartel is confident demand is withstanding Omicron. API data [from the US] showed a larger-than-expected draw of 6.4m barrels last week, with the benchmark EIA report due later today forecast to show a draw of 3.5m barrels."
BP PLC (LSE:BP.) is 1.89% better while Royal Dutch Shell PLC (A shares) (LSE:RDSA) has risen 1.29%.
8.42am: Broker upgrades provide some support
Fresh from its strong performance in the latest Kantar figures, Ocado Group PLC (LSE:OCDO) is the top riser in the leading index, up 3.2% to 1606p.
It has also been helped by analysts at Berenberg raising their recommendation from hold to buy with a 1990p target.
The analysts said: " Ocado's ecosystem of grocery e-commerce solutions is best-in-class; we believe it will continue to sign more deals with both existing and new partners."
Also benefitting from an upgrade is Intercontinental Hotels Group PLC (LSE:IHG), up 1.15% as UBS moved from neutral to buy.
But Vodafone Group PLC (LSE:VOD) is the biggest faller so far, down 1.2%.
Overall the FTSE 100 is off its worst levels but still down 5.45% or 0.07% at 7499.7.
Richard Hunter, head of markets at interactive investor, said “After a sprightly start to the New Year, investor focus switched to the more pressing issue of interest rate hike expectations.
"Rising Treasury yields in the US prompted a bout of rotation from high growth stocks, such as technology, into value, boosting financial and industrial shares.
"In particular, interest rate sensitive stocks such as the banks attracted buying interest ahead of the imminent fourth quarter reporting season. Although it is extremely unlikely that rates will rise to historical levels, there is nonetheless an improvement in sentiment given that the impending environment should improve prospects for the banks over the coming months."
Lloyds Banking Group PLC (LSE:LLOY) is up 0.94% while NatWest Group PLC (LSE:NWG) has edged up 0.3%.
8.24am: Supermarkets see sales accelerate in December although they fell from last year's record figure
Christmas grocery sales slipped from the record levels seen in 2020 but were stronger than pre-pandemic figures, according to the latest report from consultancy Kantar.
But food price inflation was at its highest for four years, excluding a brief period in spring 2020 when promotions were cut amid product shortages.
Prices rose fastest in markets such as fresh beef, savoury snacks and skincare while falling in fresh bacon, bath and shower products and spirits.
Overall, grocery sales reached £31.7bn over the 12 weeks to 26 December 2021, down by 3% compared with 2020 but up 8% on 2019.
Fraser McKevitt, head of retail and consumer insight at Kantar, says: “People seized the chance to enjoy Christmas with friends and family after last year’s muted festivities, and grocery sales hit £11.7 billion over the month of December alone. This lofty spend figure is down just 0.2% on record 2020 sales when several areas faced restrictions and the data suggests that while there weren’t formal rules in place across the UK this year, many people celebrated at home again due to Omicron. We can really see just how much spending accelerated in December compared with earlier in the year by looking at the average trend during March to November when sales were down by 2.5% against 2020.”
Premium own-label sales broke records this Christmas and shoppers spent £627mln on supermarkets’ own upmarket lines over the four weeks to 26 December, an increase of 6.8% versus 2020.
On price rise, McKevitt said: “Grocery price inflation reached 3.5% in December, adding nearly £15 to shoppers’ average monthly grocery bill. We saw prices rise faster for a short while in Spring 2020 when promotions were cut to maintain product availability, but before that you would have to go back nearly four years to January 2018 to see inflation running higher.”
As for individual supermarkets, Ocado Group PLC (LSE:OCDO) saw a 2% increase in the 12 weeks, Aldi was flat, Tesco PLC (LSE:TSCO) dipped 0.9% but grew its market share to a hefty 27.9%, Asda fell 3.9%, J Sainsbury PLC (LSE:SBRY) dropped 4.4% and Morrisons lost 6.5%
8.12am: Rally runs out of steam
Leading shares have edged lower after a strong start to the year's trading on Tuesday.
The dip follows a mixed performance on Wall Street and declines in Asia as US Treasury yields continue to climb.
The FTSE 100 is down 20.72 points or 0.28% at 7484.43.
Later come the latest US jobs figures in the form of the ADP private payrolls report for December, itself an indicator (however unreliable) of the widely watched non-farm payroll numbers due on Friday.
And there is also the small matter of the Federal Reserve minutes from its last meeting, with the prospect of rising rates behind the rise in US yields.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "The rising yields will be a major story of the coming months of course as the Fed is preparing to end its QE purchases and hike rates. And the Fed minutes should give some light on the Fed’s plans at today’s release. The December dot plot hinted at three 25bp rate hikes throughout this year, while the Fed could push for at least a 100bp total hike in 2022 to fight the rising inflation."
6.50am: Market expected to pause for breath after strong start to the year's trading
The FTSE 100 is seen starting Wednesday on the back foot, predicted to dip back beneath the 7,500 level briefly reached on Tuesday.
CFD firm IG Markets has the blue-chip benchmark around 28 points lower making a price of 7,468 to 7,471 with just over an hour to go until the open.
Wall Street indices saw mixed price action on the first trading day of 2022 - OANDA analyst Jeffrey Halley pointed to a rotation out of ‘growth into value’ favouring the Dow Jones Industrial Average over the Nasdaq and S&P, amidst rising US yields.
“Whether it lasts is another thing altogether, with such rotations running out of steam over the past 18 months, without really ever gathering momentum. Still, a couple of things are ‘different this time’ namely the omicron variant is rapidly being repriced as omi-gone. Secondly, the Federal Reserve has commenced tapering its QE and will likely start hiking soon after the mid-year,” Halley said in a note.
“US yields should keep rising, not a certainty and the world has been led to water many a time over the past 18 months on this front.”
On Wall Street, the Dow Jones rose 214 points or 0.59% to close Tuesday’s trading at 36,799.
The S&P 500 dipped only slightly lower to 4,793 whilst the Nasdaq fell 1.33% to 15,622.
The small-cap Russell 2000 index meanwhile gained just over 1% to 2,268.
Around the markets
The pound: US$1.3534, up 0.03%
Gold: US$1,815 per ounce, up 0.07%
Silver: US$22.90 per ounce, down 0.69%
Brent crude: US$80.01 per barrel, up 1.3%
WTI crude: US$77.00 per barrel, up 1.2%
Bitcoin: US$46,385, up 0.14%
Ethereum: US$3,815, up 1.64%
6.50am: Early Markets - Asia / Australia
Stocks in the Asia-Pacific region fell on Wednesday as investors watched U.S. Treasury yields, which rose at the fastest new year pace in two decades.
The benchmark 10-year U.S. Treasury yield rose to as high as 1.71% on Tuesday, its biggest rise on the first day of the year in two decades, and was last trading at 1.6422%.
China’s Shanghai Composite fell 1.00% and Hong Kong’s Hang Seng index declined 1.30%.
The Nikkei in Japan rose 0.10% while South Korea’s Kospi dipped 1.21%.
Australia’s S&P/ASX200 closed 0.32% lower at 7,565.8 points, hit by heavy losses in the healthcare and technology sectors.
https://news.google.com/__i/rss/rd/articles/CBMinAFodHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL25ld3MvOTcwNDAzL2Z0c2UtMTAwLWdhaW5zLWJ1dC13YWxsLXN0cmVldC1tYWtlcy1taXhlZC1zdGFydC1hcy11cy1qb2JzLWZpZ3VyZXMtYmVhdC1leHBlY3RhdGlvbnMtOTcwNDAzLmh0bWzSAT5odHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL2FtcC9uZXdzLzk3MDQwMw?oc=5
2022-01-05 17:04:00Z
CBMinAFodHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL25ld3MvOTcwNDAzL2Z0c2UtMTAwLWdhaW5zLWJ1dC13YWxsLXN0cmVldC1tYWtlcy1taXhlZC1zdGFydC1hcy11cy1qb2JzLWZpZ3VyZXMtYmVhdC1leHBlY3RhdGlvbnMtOTcwNDAzLmh0bWzSAT5odHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL2FtcC9uZXdzLzk3MDQwMw
Tidak ada komentar:
Posting Komentar