- FTSE 100 closes 0.6% higher
- Ocado in demand after upgrade
- Vodafone lifted by trading news
4.45pm: FTSE 100 ends higher lifted by banks
Stocks in the UK closed higher as the FTSE 100 Index inched closer to recouping all its late-January losses as value stocks, including many oil companies and banks lifted the UK benchmark.
The blue-chip FTSE 100 made up of the largest companies listed on the London Stock Exchange, rose 47.22 points, or 0.6% higher to close at 7,583.
According to market watchers, the FTSE 100’s recovery, compared to Wall Street and other global benchmarks has been more pronounced thanks to its higher make-up of cheaper, so-called value shares rather than high-growth technology and biotech stocks.
Meanwhile, two-year yields on British bonds hit their highest since 2011 amid expectations for a 50-basis-point rate hike from the Bank of England.
Miners Anglo American, Rio Tinto and Glencore were among the top gainers on the London blue-chip index, aided by stronger copper and gold prices, reported Reuters.
3.52pm: UK market set for another upbeat day
Leading shares remain in positive territory heading into the close.
Investors have taken comfort from signs from the US Federal Reserve that interest rates might not rise as quickly as previously expected.
But tomorrow sees the latest Bank of England meeting, which could well see UK rates increase.
And there is also the small matter of the European Central Bank, which will have found its view that pricing pressures are transitory tested by today's record Eurozone inflation figures.
Despite that the FTSE 100 is up 55.48 points or 0.74% at 7591.26, having earlier managed to breach the 7600 barrier.
The rise comes despite Wall Street turning a little more cautious. The Dow Jones Industrial Average is now down 0.12% after a bright start, but the S&P 500 and Nasdaq Composite remain in the green.
Elsewhere oil continues to recover after Opec+ stuck to its output targets for March rather than increasing them to meet demand.
Brent crude is up 1.16% to US$90.19 a barrel while West Texas Intermediate is up 1.42% at US$89.45.
This has done little for Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL) and BP PLC (LSE:BP.) however, which are both marginally lower.
Heading higher are Ocado Group PLC (LSE:OCDO), up 6.22%, and Auto Trader Group PLC (LSE:AUTO), 3.38% better, after broker upgrades.
Vodafone Group PLC (LSE:VOD) has been lifted 3.33% by its latest update.
But Antofagasta PLC (LSE:ANTO) is down 5.18% on concerns Chile may nationalise its copper industry.
There are also reports the government might increase taxes to cope with rising social pressures.
3.21pm: Energy companies climb on talk of support package to cope with soaring bills
Reports that the UK government may provide loans to energy firms to help ease the impact of soaring domestic bills have lifted gas and electricity company shares.
The suggestion comes as Ofgem prepares to unveil its price cap tomorrow, letting households know how much their bills will increase. The disclosue comes a week ahead of schedule.
British Gas owner Centrica PLC (LSE:CNA) has climbed 2.91% while SSE PLC (LSE:SSE) is up 1.13%.
2.59pm: Tech stocks support US markets
US markets have started in positive territory with tech stocks in focus as the Nasdaq has gained for the last three days in a row after the January sell-off.
In New York, the Dow Jones Industrial Average gained around 53 points in early deals to stand at 35,458. The broader-based S&P 500 advanced around 19 at 4,567.
The tech-laden Nasdaq Composite Index added 93 points to go to 14,439.
Alphabet Inc (NASDAQ:GOOG) shares zipped up over 9% after the Google owner announced strong earnings and a surprise 20:1 share split.
Conversely, PayPal (NASDAQ:PYPL)) shares plunged over 23% after the company's fourth quarter earnings missed analyst expectations and the outlook was downgraded, in part, blamed on inflation.
Meanwhile, investors seem to have shrugged off the private payroll data from ADP, which fell by 301,000 for January instead of the 200,000 rise expected.
In the UK, the FTSE 100 is now up 54.53 or 0.72% at 7590.31.
1.49pm: Oil price rebounds as Opec sticks to output plan
Opec and its associates including Russia have decided to keep their output increase in March in line with previous expectations, after a surprisingly brief 16 minute meeting.
The group has stuck to its plan to raise production by 0.4mln barrels a day next month, with the next meeting due on March 2.
25th #OPEC and non-OPEC Ministerial Meeting concludes#OOTT https://t.co/bjkl5hJQVG pic.twitter.com/nVKfMTtqnb
— Reza Zandi (@R_Zandi) February 2, 2022
The news has pushed the oil price higher.
Brent crude is now up 0.92% at US$89.98 a barrel while West Texas Intermediate has climbed 1.12% to US$89.19.
1.31pm: US firms slash jobs unexpectedly
Pause for thought for the US Federal Reserve in its interest rate deliberations.
American employers unexpectedly cut jobs last month as Omicron spread, the first negative figure since December 2020, according to private payroll firm ADP.
Ahead of the widely watched non-farm payroll numbers, ADP reported a 301,000 fall in private payrolls in January compared to expectations of a 200,000 rise.
The previous month's gain of 807,000 has also been revised down to 76,000.
Nela Richardson, ADP chief economist, said "The labour market recovery took a step back at the start of 2022 due to the effect of the Omicron variant and its significant, though likely temporary, impact to job growth."
12.18pm: Antofagasta under pressure
Mining group Antofagasta PLC (LSE:ANTO) is the biggest faller in the leading index.
The Chilean copper specialist is down 3.16% after continuing talk of the country possibly nationalising its copper industry.
On Tuesday the environomental commission of the country's assembly approved an early stage proposal for such a move.
The idea would need a vote from the full assembly to be included in Chile's new constitution, which would itself be put to a referendum later this year.
Apart from this, business has also been unsettled by talk of tax rises to help deal with inflation.
11.44am: US markets expected to continue gains as Alphabet pleases investors
US stocks look set for further gains after a strong start to February led by the Nasdaq as tech stocks got a boost after Google parent Alphabet Inc (NASDAQ:GOOG) reported a surge in profit.
Nasdaq-100 futures were 1.2% higher on Wednesday, while contracts for the broader S&P 500 index added 0.5%, although those for the Dow Jones Industrial Average were fairly flat after rising 0.8% on Tuesday.
Stocks have staged a recovery in recent days after a January performance which was the worst month since the coronavirus (COVID-19) pandemic began.
Signals from the Federal Reserve of plans to tighten monetary policy faster than previously expected to fight spiraling inflation weighed on sentiment and prompted a sell-off in growth stocks last month, but those losses are being recouped this week.
Much will depend, however, on Friday's always crucial monthly US non-farm payrolls report. Ahead of that key data release, ADP will report on private-sector employment in January later today. A JOLTS report on Tuesday showed that job openings rose and the quit rate remained high in December.
Traders also have their eyes on the latest corporate earnings season, which is now about halfway through, with the number of companies that have beaten Wall Street’s expectations on sales and profit above average, although lower than earlier in the recovery, according to analysis from Deutsche Bank.
Shares of Alphabet surged over 10% in off-hours trading on Tuesday after the Google owner's profit rose by a third in the last quarter. The tech giant also announced a 20-for-1 stock split.
But PayPal (NASDAQ:PYPL) (PayPal (NASDAQ:PYPL)) shares tumbled close after the company posted lower earnings and higher expenses.
Meanwhile the FTSE 100 remains in a positive mood.
The index is up 63.79 points or 0.85% at 7599.57, just below the day's high of 7604.
10.44am: Leading shares close to the day's high
Leading shares continue to move higher, taking their lead from a strong performance from Wall Street.
The FTSE 100 is up 62.99 points or 0.84% to 7598.77, close to the day's high.
Investors have taken heart from signs that the US Federal Reserve may not be as hawkish on interest rate rises as had earlier been feared.
But there is still some caution ahead of the meetings tomorrow of the Bank of England, which could well lift rates again for a second time after a move in December, and the European Central Bank. The latter has to make its latest decision in the light of record Eurozone inflation figures just released.
Among the risers Vodafone Group PLC (LSE:VOD) is up 3.45% following its latest update, while broker notes continue to support Ocado Group PLC (LSE:OCDO), up 6.67%, and Auto Trader Group PLC (LSE:AUTO), 3.64% higher.
10.11am: Price rises put pressure on ECB
Eurozone inflation has hit a new record, coming in much higher than expected in January, putting pressure on the European Central Bank as it meets this week.
The ECB, unlike the Bank of England and US Federal Reserve, has maintained pricing pressures are transitory.
But the latest figures show the Eurozone consumer price index rising 5.1% last month, up from 5% and worse than the forecast 4.4%.
Energy prices showed the biggest rises, up 28.6% compared to 25.9% in December, with food, alcohol and tobacco up 3.6% and services 2.4%.
- Eurozone CPI Estimate (Y/Y) Jan P: 5.1% (est 4.4%; prev 5.0%)
- Eurozone CPI Core (Y/Y) Jan P: 2.3% (est 1.9%; prev 2.6%)
- Eurozone CPI (M/M) Jan P: 0.3% (est -0.4%; prev 0.4%)
— LiveSquawk (@LiveSquawk) February 2, 2022
9.58am: Darktrace heads mid-cap risers
Cyber security firm Darktrace PLC (LSE:DARK) is up 5.03% as one of its early backers edged up its shareholding.
KKR Dark Aggregator, which sold shares towards the end of last year, has raised its stake from 8.588% to 9.254%, according to a filing issued after the market closed on Tuesday.
Darktrace is the leading riser in the FTSE 250, helping the mid-cap index add 0.75% to 22,334.
9.13am: Brokers boost Ocado and Auto Trader
The top two risers in the leading index are both benefiting from broker upgrades.
Ocado Group PLC (LSE:OCDO) has jumped 7.02% after analysts at Credit Suisse raised their rating from underperform to outperform.
They said the company’s improved technology system could lead to stronger relations with its existing clients.
And Auto Trader Group PLC (LSE:AUTO) has accelerated 3.26% as Jefferies moved from hold to buy.
9.07am: Deals for Vodafone?
More on Vodafone Group PLC (LSE:VOD) after its third quarter update.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the update added to suggestions the mobile phone group may be seeking deals.
She said: “Speculation surrounding a deal with Three and a fresh tie up in Italy is set to intensify with this update, given Vodafone has reiterated its commitment to ‘proactive portfolio actions’ to try and keep shareholders happier.
"There is some relief that Omicron has not disrupted lucrative roaming fees too badly, with the company posting a 2.7% growth in service revenue. The fact the company is on track for the full year is also reassuring, and the door seems wide open to future deals."
Indeed, any plans the company had may now be accelerated, given the newly revealed presence of activist investor Cevian on the share register.
8.59am: Oil flat as Opec meets
Oil prices are fairly flat after recent gains, ahead of today's meeting of the Opec oil cartel and its associates including Russia.
Brent crude has edged down 0.01% to US$89.15 a barrel while West Texas Intermediate - the US benchmark - is off the same amount at US$88.19.
But they still remain near seven year highs, with the so-called Opec+ group expected to resist attempts to raise its output substantially.
On Tuesday, there was an unexpected fall in US oil stocks to meet increased demand.
They fell by 1.6mln barrels last week compared to analyst forecasts of a rise of 1.5mln barrels, according to the American Petroleum Institute.
Victoria Scholar, head of Investmen at interactive investor, said: “Oil is holding steady with Brent hovering close to $90 a barrel. Having enjoyed its best month in a year in January, the market is in wait-and-see mode ahead of today’s OPEC+ meeting.
"Driven by a backdrop of rising oil prices and a global energy shortage, Opec+ is under pressure to expedite its supply releases to the market. However, the cartel looks set to stick its guns, keeping policy unchanged by supplying 400,000 barrels per day in March. By holding back supply in the face of supercharged demand, the market is likely to remain well supported with the potential for $95 oil near-term.”
This has not stopped oil shares slipping. Shell PLC (LSE:SHEL, NYSE:SHEL, EURONEXT:SHELL) is down 1.02% while BP PLC (LSE:BP.) has dipped 0.67%.
Overall the FTSE 100 is hovering around its earlier levels, up 37.27 points or 0.49% at 7573.05.
8.17am: Market adds to Tuesday's gains
Leading shares have started where they left off on Tuesday, gaining more ground as investors become a little more relaxed about the prospect of higher interest rates.
Recent central bank comments - notably from the US Federal Reserve - seem to have rowed back from some of the more hawkish suggestions about the pace of rate rises.
So the FTSE 100 is up 38.16 points or 0.51% at 7573.94 in early trading.
But investors are likely to remain cautious ahead of two central bank meetings tomorrow - the Bank of England and European Central Bank.
Ahead of those meetings come the Eurozone inflation figures for January.
The ECB, unlike the Bank of England and the US Federal Reserve, seems wedded to the idea that the current inflationary pressures are transitory, and so it maintains it will not be rushed into action.
So it is likely to welcome the inflation figures if they come in as forecast. Headline CPI is expected to fall from 5% in December to 4.4%, with core prices set to fall back from 2.6% to 2%.
But Michael Hewson at CMC Markets UK warned: "While it will be convenient for the ECB to paint this as evidence of their argument that inflationary pressure is transitory and now falling, we already know from the experience of the US it is nothing of the sort.
"There is also the added complication that factory gate price in inflation is even higher, and well above 20% in Germany, Italy and Spain. With markets already pricing in the prospect of two ECB rate rises this year, tomorrow’s ECB press conference will be an exercise in trying to spin a narrative that the market simply doesn’t buy."
Another big event later this week is the US non-farm payroll report due on Friday, and ahead of that come the latest figures from ADP, the private payroll company. Although this tend to be little help in predicting the non-farm numbers, they are still taken into account by the market.
Oil watchers will be keeping an eye on the latest Opec+ meeting today to see what news comes out about future production plans.
Elsewhere Vodafone Group PLC (LSE:VOD) had added 1.8% after it reaffirmed its earnings guidance for the year in the wake of a 2.7% rise in third quarter group service revenue.
There had been some excitement in the shares earlier in the week following news that activist investor Cevian Capital had taken a stake.
6.50am: Market gains set to continue as central banks calm nerves
The FTSE 100 is seen higher ahead of Wednesday’s open as markets temper interest hyperbole as central bankers measure their comments.
CFD firm IG Markets reckoned the blue-chip benchmark is to rise around 60 points, making a price of 7,581 to 7,585 with just over an hour to go until the open.
Global equities - American equities in particular - have steadied somewhat in the week to date and slightly calmer, more even-minded narratives have emerged around inflation and interest rates.
“US markets continued their recent resilient tone, closing higher for the third day in a row, also bolstered by the more measured tone, as the US dollar slid back for the second day in succession,” said Michael Hewson, analyst at CMC Markets.
“Having heard from Mary Daly of the San Francisco Fed, Kansas City’s Esther George, Raphael Bostic of the Atlanta Fed, and Patrick Harker of the Philadelphia Fed, there was a common theme, in that markets were getting ahead of themselves, and that any moves should not be disruptive in nature.”
The Dow Jones closed Tuesday up 273 points or 0.78% at 35,405 whilst the S&P 500 notched 0.7% higher to finish at 4,546.
Meanwhile, the Nasdaq advanced 0.75% to 14,346 and the small-cap tracking Russell 2,000 index rose by 1.1% to 2,050.
Around the markets
Pound: US$1.3523, up 0.01%
Gold: US$1,797 per ounce, down 0.18%
Silver: US$22.65 per ounce, up 0.09%
Brent crude: US$89.37 per barrel, up 0.12%
WTI crude: US$88.43 per barrel, up 0.3%
Bitcoin: US$38,408, up 0.13%
Ethereum: US$2,764, up 1.09%
6.50am: Early Markets - Asia / Australia
Markets in mainland China, South Korea, Singapore and Hong Kong were closed on Wednesday for the Lunar New Year holidays.
Japan’s Nikkei 225 rose 1.68% to close at 27,533.60 while the Topix index gained 2.14% to 1,936.56.
Australia’s S&P/ASX200 advanced 1.17% to end the day at 7087.70 points, even as Reserve Bank governor Philip Lowe admitted interest rates could rise in 2022.
Lowe last year held the view that an increase to the record low 0.1% cash rate was unlikely until late 2023 or 2024.