Selasa, 05 Desember 2023

FTSE 100 Live: Stocks called lower after weak US showing - Proactive Investors UK

  • FTSE 100 down 23 points at 7,490
  • Food price inflation drops to 9.1% says Kantar
  • Barclays slips as Qatar wealth fund cuts stake

10:04am: Trading in small caps to resume, says LSEG

An update on the trading issues - The London Stock Exchange is to resume trading in its smaller cap shares after a trading halt that lasted almost half an hour.

FTSE 100 and 250 stocks were unaffected by the halt.

"We are now resuming trading on impacted instruments" the London Stock Exchange said. "Instruments will go into auction at 09:55 with uncrossing beginning at 10:15."

9:59am: London Stock Exchange investigating trading problems

The London Stock Exchange is currently investigating an issue impacting its trading/information system.

Currently only FTSE 100, FTSE 250 and IOB (international order book) securities are available for trading.

9:51am: UK private sector returns to growth in November

The UK private sector expanded for the first time since July, helped by an improving service economy, according to a report on Tuesday.  

The S&P Global/Chartered Institute of Procurement & Supply UK services PMI index rose to 50.9 points in November, from 49.5 in October, above an earlier flash estimate of 49.5 points.  

“Rising output reflected a slight rise in new orders, but survey respondents continued to report subdued demand and low confidence among clients,” S&P said. 

“Service providers experienced another sharp increase in their average cost burdens, largely due to rising staff wages and elevated inflationary pressures across the broader economy,” the report continued. 

Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply said: "After three months of continuous contraction, the services sector began to show signs of life.” 

He highlighted “the biggest rise in new orders since July and export orders since August,” while a softening in the headline rate of inflation and improved raw material prices “set the scene for some clients to commit to new work while the remainder stayed mostly cautious until there were stronger improvements in the UK economy.” 

The wider composite PMI reading, calculated using a weighted average of the services and manufacturing data, rose to 50.7 points in November, from 48.7 in October.

It was the first time since July that the composite PMI has risen above the 50.0 mark.

9:20am: Moody's cut on China hits Asia-focused London stocks

The Moody’s downgrade on China has pushed Asia-focused stocks lower in London with Prudential down 2.3%, HSBC down 1.2% and Standard Chartered down 1.4%. 

Commodity stocks are also lower on fears of lower demand from the world’s second largest economy – Anglo American is down 2.5% and Antofagasta down 1.2%. 

Victoria Scholar, head of investment, interactive investor said: “China has struggled with a bumpier than expected post covid recovery.”  

“It has been grappling with weak demand, an embattled property sector, declining imports and exports, and heavy debts from long-term infrastructure spending.”  

"While the authorities have been attempting to bolster demand through stimulus measures, more needs to be done,” she felt. 

8:56am: Moody's cuts outlook on China credit to ‘negative’ 

Also weighing on markets today is news that Moody's Investors Service has cut its outlook on China’s sovereign credit rating to negative, citing growing risks of persistently lower medium-term economic growth and the overhang of a property sector crisis. 

The news sent the Shanghai Composite down 1.7%, while the FTSE 100 is holding near session lows. 

The credit rating agency changed the outlook to negative from stable while affirming China's A1 long-term local and foreign-currency issuer and senior unsecured ratings and the (P)A1 foreign-currency senior unsecured shelf rating.                 

“The change to a negative outlook reflects rising evidence that financial support will be provided by the government and wider public sector to financially-stressed regional and local governments and State-Owned Enterprises, posing broad downside risks to China's fiscal, economic and institutional strength,” Moody’s said.  

The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector, it said.  

8:31am: Food inflation drops more with record Xmas sales forecast

Food price inflation fell again in November while the cost of a Christmas dinner is rising by less than the headline rate, according to latest figures. 

Market research firm Kantar reported annual grocery inflation dropped to 9.1% in the four weeks to November 26, down from 9.7% a month earlier. 

“The retailers are also battling it out to offer value to consumers during this important month for trading and are doing what they can to keep prices low,” said Fraser McKevitt, head of retail and consumer insight at Kantar. 

In better news for shoppers, McKevitt pointed out the average cost of a frozen turkey Christmas dinner for four with all the trimmings, Christmas pudding and sparkling wine was up 1.3% at £31.71 with the prices held down by cheaper Brussels sprouts and Christmas pudding than a year ago. 

Kantar predicts take-home supermarket sales will surpass £13 billion for the first time ever this December, with Friday December 22 set to be the busiest day for festive grocery shopping. 

McKevitt said the scene is set for “record-breaking spend through the supermarket tills this Christmas.” 

The two biggest supermarkets continued their fightback in the battle for market share last month,  McKevitt said. 

“Sainsbury’s delivered its largest market share gain in over a decade this November, taking an additional 0.4 percentage points to reach 15.6%.  The last time it made this big a jump was in March 2013.”   

Its growth was driven by the continued success of its own-label offer, with sales of its popular ‘Taste the Difference’ range up by a whopping 23% year on year.   

Tesco also put in a strong performance to increase its market share to 27.5% following a growth in sales of 8.6%, marking the fifth month in a row that Britain’s largest retailer has made gains. 
  
Lidl was again the fastest growing grocer, boosting sales by 14.2% to take a record high share of 7.8%, while Aldi increased sales by 11.1% and now holds 9.6% of the market.   

Sales at Asda and Morrisons were up by 2.6% and 3.7% respectively, giving them 13.4% and 8.7% of the market each respectively.   

Co-op’s share stands at 5.8%, while Waitrose accounts for 4.4% of the market.   

Frozen specialist Iceland saw an increase in sales of 3.0% and growing ahead of the market, Ocado’s sales jumped by 12.1%, holding its market share steady at 1.7%. 

8:12am: FTSE 100 lower as market lose some of "recent poise"

The FTSE 100 made a weak start to the day as investors continue to lock in profits after recent gains. 

At 8:12am, London's blue-chip index was down 37.94 points, 0.5%, at 7,475.02 while the FTSE 250 was little changed at 18,366.17.

Jim Reid at Deutsche Bank said markets have lost a “little of their recent poise” over the last 24 hours. 

“There hasn't been a specific catalyst for the softness, but the astonishing rally in November and long positioning has led to some scepticism about how much further it’s able to run, at least until we get some more data that’s soft-landing friendly,” he said.  

“After all, even though markets are fully pricing in a Fed rate cut by the May meeting in just 5 months’ time, this isn’t the first time this year that rate cut speculation has built up,” he pointed out.  

In the UK, retailers were in the spotlight following mixed signals from two closely watched surveys. 

The British Retail Consortium-KPMG report showed UK retail sales increased by just 2.7% in November, a significant weakening on last November's 4.2%. 

Paul Martin, UK head of retail at KPMG, said: "With less than a month to go and sales growth limping along, the cost-of-living crisis has taken its toll on Christmas spending for many households, and the continued economic conditions are testing consumer resilience. 

But separate figures from Barclays showed consumer card spending grew 2.9% year-on-year in November – just up on October's 2.6% – as confidence in spending on non-essential items reached its highest level since April. 

In company news, Barclays fell 3.1% after reports that Qatar’s wealth fund has sold nearly half the shares it holds in the lender. 

Elsewhere, Land Securities rose 1.2% as Goldman Sachs (NYSE:GS) upgraded to ‘buy’ from ‘hold’ and raised its price target to 690p from 580p while British Land jumped 1.7% as Goldman upgraded to ‘neutral’ from ‘sell’ and lifted its price target to 350p from 290p. 

7:46am: Qatar slashes stake in Barclays - reports

Qatar’s sovereign wealth fund is slashing its stake in Barclays, the UK bank that is coming under pressure from investors to overhaul its strategy and improve its performance, according to reports. 

Qatar Holding, a subsidiary of the Qatar Investment Authority that helped bail out Barclays during the global financial crisis, launched the sale on Monday of almost 362 million shares, worth about £510 million, the Financial Times reported. 

The QIA is Barclays’ second-biggest shareholder, according to Bloomberg data, and the stock sale is expected to reduce its stake from 5.3% to 2.9%.  

The bank is under presure to improve performance and last week announced it was cutting 900 back office jobs. 

Reports also suggested the lender was looking at axing less profitable clients in its investment banking arm. 

7:41am: Marston's posts full-year loss but sales rise

Marston's PLC reported Christmas bookings are well ahead of last year as in unveiled a jump in full-year sales.  

The pub operator said in the 52 weeks ended 30 September total revenue climbed 9.1% to £872.3 million from £799.6 million the year before although it was not enough to prevent a pre-tax loss of £20.7 million compared to profit of £163.4 million before. 

On an underlying basis, pre-tax profit advanced to £35.5 million from £27.7 million.  

Like-for-like sales rose 10.1% compared to last year with both drink and food sales encouraging, demonstrating the trading resilience of the group's predominantly community pub estate. 

Underlying operating margin were flat at 14.3%, preserving margins in a high inflation environment, the company said. 

Marstons said current trading was positive, with like-for-like sales since year end up 7.4% compared to last year with Christmas bookings tracking well and ahead of last year. 

The firm said it is targeting margin improvement of at least 200bps in the medium term and will continue to find efficiencies to improve margin.  

7:26am: Ashtead delivers record first half despte recent warning

First up on Tuesday, results from Ashtead Group PLC which has reported a record first half performance despite its recent warning that full-year profits would be below expectations. 

The international equipment rental company said in the half year ended 31 October  group revenue advanced 16% to $5.57 billion from $4.80 billion the year prior with US revenue up 18% and rental revenue up 14%. 

The firm said investment during the period is enabling it to take advantage of substantial structural growth opportunities. 

Despite the recent warning, Ashtead said its end markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts.  

“We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural change,” the company said. 

Pre-tax profit grew 5% to $1.25 billion from $1.19 billion, adjusted  earnings per share increased 6% to 225.8 cents from 212.2 cents while the interim dividend was hiked 5% to 15.75 cents from 15.0 cents. 

7:00am: FTSE 100 seen lower after subdued US and Asian trading

The FTSE 100 is expected to open lower on Tuesday after falls in US and Asian markets. 

Spread betting companies are calling London’s lead index down by around 32 points after closing down 16.39  points, 0.2%, at 7,512.96 on Monday. 

In Asia, the Nikkei 225 was down 1.3% in late trade in Tokyo, while in China, the Shanghai Composite was 0.9% lower, and the Hang Seng in Hong Kong was 1.7% lower. 

In New York on Monday, the Dow Jones Industrial Average fell 0.1%, the S&P 500 fell 0.5% and the Nasdaq Composite declined 0.8%. 

In London, Barclays will be in focus after reports that Qatar has offloaded almost its shares in the UK lender while the latest BRC retail sales monitor will be examined ahead of the key Christmas trading period. 

Later in the trading session, service sector PMI readings are due in the UK, Europe and US while the first of a number of releases on the US jobs market are due with the Jolts job vacancy report. 

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2023-12-05 07:01:00Z
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