- FTSE 100 closes 16 points higher
- UK consumer confidence slumps
- Chelsea bidders narrowed down
4.55pm: FTSE 100 finishes above water
The FTSE 100 closed out the week in positive territory as stocks demonstrated relative resiliency in the face of upbeat economic data.
The UK's blue-chip index closed Friday at 7,483 points, a 0.2% gain on the day.
Some late weakness has seen equities fall back, but overall, the rally in equities is still going, says Chris Beauchamp, chief market analyst at online trading platform IG.
“An afternoon wobble shows that nervousness remains, but equities have moved through the week without giving back too much ground," Beauchamp said.
“The recent bounce from the lows is still going intact, if it has taken a knock in afternoon trading, although the darker global economic outlook means that many are wondering whether these gains can be sustained. Investors keep waiting for the other shoe to drop, but as yet stocks are not giving people the trigger to begin selling once again."
4:00pm: FTSE 100 climbs into the green, oil rally ends as EU avoids Russian oil ban
New research by the CGA, the provider of market measurements across various industries reported that drinks sales in the seven days up to 19 March grew by 7% compared to 2019.
“St Patrick’s Day provided the best trading day of last week, with drinks sales on 17 March up by 37% on the same day in 2019.”
“Knock-on celebrations kept sales well ahead on both Friday, up 7%, and Saturday, up 11%. Saturday trading was also lifted by rugby fans watching the final round of Six Nations fixtures in pubs and bars.”
The data will be good news for listed companies when reporting on future results and will act as a true indicator of performance that is unaffected by lockdown and restrictions.
JD Wetherspoons was up 1.2% to 800p, Mitchells and Butlers fell 0.18% to 227p and Fuller, Smith and Turner also fell slightly by 1.60% to 614p.
3.16pm: Modest Friday
European markets have made modest gains ahead of the weekend, with Craig Erlam, senior market analyst at OANDA providing further insight.
"We appear to have hit a point in which the initial shock of the Ukraine invasion has passed and markets have corrected back to a point where the economic risks are deemed to be priced in."
"In the absence of any significant developments, equity markets have come to a relative standstill and could remain that way until we see some progress."
"Volatility remains in the commodity space which is contributing to the day-to-day fluctuations in equity markets. Higher commodity prices mean a further squeeze on the global economy this year and more inflation at a time when central banks are already accelerating tightening plans after falling behind the curve."
"Developments in Ukraine are also being monitored closely from negotiations with Russia to sanctions and the risk of escalation. The West continues to warn about the risk of Putin authorising the use of biological, chemical, or nuclear weapons and has warned there would be a response."
2.48pm: Rolls-Royce on top
London's blue-chip index remains fairly flat, with analysts predicting that's how it will close.
Rolls Royce has climbed to the top of the index climbers, up 3.43% to 95p.
2.16pm: Nasdaq opens lower
The Dow Jones and S&P 500 opened higher as expected, up 0.3% to 34,6815 and 0.17% to 4,527 respectively.
The Nasdaq, which features tech stocks such as Apple, Micrsoft and Amazon fell 0.27%, or 38 points, to 14,153.
London's blue-chip index continues to move upwards, gaining 32 points to 7,449.
If it continues to move, or even stay at the same level, it will finish the week with its highest close in a month.
1.51pm: UK consumer confidence slumps again
UK consumer confidence fell for the fourth month in a row, with the overall consumer index score at -31.
Berenberg notes that things will get worse in the second quarter before they get better.
“Initial measures of activity for March, such as the PMIs, have held up better than expected, which reflects solid underlying momentum and the easing of COVID-19 restrictions.”
“However, forward-looking confidence indicators point to trouble ahead. Due to the shock of a major European war and a surge in inflation, consumer confidence and business expectations are flashing red having plunged to levels only witnessed during the great financial and euro crises, and the early phase of the pandemic.”
“Amid unusually high uncertainty, we now expect UK real GDP to flatline in the second quarter, instead of growing by 0.1% quarter on quarter, and Eurozone GDP to expand by just 0.2% quarter on quarter, instead of 0.6%.”
The investment bank does believe however that the third quarter will show signs of recovery, as the situation in Ukraine hopefully provides further clarity on how long the war will continue as well as pent-up demand potentially loosening the purse strings heading into summer.
1.21pm: US preview
US stocks are seen opening modestly higher on Friday, reflecting continued worries over inflationary pressures and spikes in commodity prices amid the continuing war in Ukraine and the prospect of higher interest rates in the world's biggest economy.
On Thursday, US president Joe Biden warned that Nato would respond if Russia began to use chemical weapons in Ukraine. His remarks led to worries of a further escalation in the war, and in turn, over the growth-dampening effects of the war.
Futures for the Dow Jones Industrial Average were up 0.1%, while those for the S&P 500 were also up 0.1% and contracts for the tech-heavy Nasdaq-100 rose 0.2%.
“Wild price moves and jaw-dropping margin calls push many investors out of the commodity markets, which, in return, reduce liquidity and has a boosting effect on price volatility,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Nickel has clearly become the face of that wild volatility, as the price surged 15% to the limit for the second day in a row yesterday. The rising commodity prices further boost inflation expectations and the central bank hawks, weigh on government bonds, yet equity traders remain surprisingly bullish," she added.
Separately, the EU’s inability to slap an embargo on Russian oil helped dampen oil prices but benchmark Brent crude was still trading at just over $115 a barrel, while gold - seen as a safe haven in the midst of uncertainty - was at around $1,958 an ounce.
US data on Thursday came in on the strong side with the manufacturing and service sectors showing strong growth while weekly jobless claims dropped to their lowest in decades. The latter reflects US Federal Reserve chairman Jerome Powell’s remarks earlier in the week that the US labor market is strong, underscoring the need for interest rates in the world’s biggest economy to rise rapidly.
A US consumer confidence survey, due out at 11.00am ET, will be in focus, especially if it continues to point toward pessimism, adding to market volatility.
1.13pm: Footsie sitting pretty in the green
Footsie remains in the green, up 12 points to 7,480.
An upbeat note from Rentokil’s own brokers seems to have sparked a flurry of movement, with shares in the services group up 3% to 534p, making it the blue-chip index’s biggest climber.
Retailers Next and JD also seemed to be unphased by a reported slow down of business in February, with analysts believing the worst may be yet to come for the sector.
12.05pm: Oil on the retreat
Oil prices are down as the EU holds back from a Russia oil ban, and the FTSE 100 and other European indices are all now up in positive territory.
President Joe Biden, who is still in Brussels for talks with other leaders, announced an agreement where the US will increase shipments to Europe of liquefied natural gas to help the continent reduce its reliance on Russian gas.
Brent crude, which has been on the rise over the past week, was down 2% to US$116.63.
US stock futures also perked up, with the Dow Jones and S&P 500 both expected to rise 0.3% and the tech-heavy Nasdaq-100 up 0.4%.
On oil, analyst Ipek Ozkardeskaya noted that for prices: “The long-term outlook remains comfortably bullish as the combination of tight global supply, and the expectation that the global oil demand will reach a record high in the second half of the year should throw a floor under the short-term price pullbacks.”
US data on Thursday came in on the strong side with the manufacturing and service sectors showing strong growth while weekly jobless claims dropped to their lowest in decades. The latter reflects US Federal Reserve chairman Jerome Powell’s remarks earlier in the week that the US labor market is strong, underscoring the need for interest rates in the world’s biggest economy to rise rapidly.
A US consumer confidence survey, due out at 11.00am ET, will be in focus, especially if it continues to point toward pessimism, adding to market volatility.
10.35am: Share sales and downgrades
London's blue-chip fallers this morning are led by Airtel Africa PLC (LSE:AAF), down more than 8% after a major shareholder sold a chunk of shares at a big discount to yesterday's close.
Singapore Telecom sold at 140p, versus the 155.5p closing price yesterday, recouping £84mln in total.
Next of the fallers is Antofagasta PLC (LSE:ANTO) after it was downgraded by UBS.
While the Chilean copper miner's shares had rallied in line with the rest of the commodity complex and global mining equities following Russia's invasion of Ukraine, the analysts reckon copper is one of the commodities where "supply is likely to be least impacted by Russia/Ukraine and fundamentals are not strong enough to support prices at >$10k/t".
A downgrade also hit discounter B&M European Value Retail SA (LSE:BME), which was cut by Credit Suisse to 'neutral' from 'outperform'.
"While discounters and food retailers should be defensive in the year ahead, B&M also has a large discretionary element to its range, a core customer which is going to be very squeezed by oil, gas and food prices," the Swiss bank's analysts said.
Elsewhere, housebuilders are among the big fallers, led by Taylor Wimpey PLC (LSE:TW.), Barratt Developments PLC and Persimmon PLC.
JPMorgan has put out a note this morning where it adds in the cladding risk for the big builders, which is "likely to remain an overhang until clarity emerges," as well as looking at the impact on the sector's earnings from material inflation.
The FTSE 100 is just above flat now at 7,468.
9.23am: Retail woe
Despite disappointing UK retail sales figures earlier, Next PLC (LSE:NXT) and Kingfisher PLC (LSE:KGF) shares are rebounding from the losses incurred over the last couple of days after both cut their profit guidance for the year ahead.
The owner of B&Q has climbed 2% to 267p this morning, while the fashion chain was up 2.1% to 6,304p.
Earlier, retail sales figures showed volumes, even including petrol, fell by 0.3% month-to-month in February, when they had been expected to rise 0.7%.
Annual growth slowed to 7.0% from 9.4% in January, also undershooting consensus forecasts.
There was also consumer confidence data earlier from GfK, showing a worsening in its UK index to -31 in March from -26 in February, slightly worse than the -30 expected.
Analysts are predicting tough times ahead.
Susannah Street, a senior investment and market analyst at Hargreaves Lansdown adds sales last month were hit by “the cost of living squeeze intensifying” and storm Eunice “keeping crowds away from the high street.”
“With the only way up for prices, with retailers lining up to prepare customers for hikes, it’s likely this drop in sales is the first sign of fresh falls to come.”
9.10am: Final Chelsea bidders
Several suitors have been ruled out of the bidding for Chelsea as advisers whittled down the potential buyers to a final three.
It is believed a consortium led by LA Dodgers owner Todd Boehly is one of the front-runners, along with another US group led by private equity billionaires Josh Harris and David Blitzer, who own the Philadelphia 76ers, according to reports.
British property developer Nick Candy's consortium is thought to be out of the running.
This comes as news emerged that oligarch Roman Abramovich, who is having to sell Chelsea due to economic sanctions sparked by Russia’s invasion of Ukraine, is leading new peace talks between Russia and Ukraine, with his role personally approved by Vladimir Putin.
8.53am: Snapshot of the market
A quick glance at what's happening across the markets, as the index loses 14 points to 7,452.
Electric vehicle charging points will rise 10-fold by the end of the decade, the Department for Transport said. The government’s new Electric Vehicle Infrastructure Strategy will increase the UK’s chargepoints from 30,000 to 300,000 by 2030.
The Transport Secretary urged the P&O boss to quit after he admitted to breaking the law over 800 sackings. The law will also be changed to stop the company from paying employees below minimum wage.
8.45am: Footsie down with Airtel Africa the biggest faller
London's blue-chip index fell 18 points on its open, down to 7,449.
Airtel Africa PLC (LSE:AAF) was the index's largest faller, losing 10% at 140p following the telecommunication mast company's announcement it has signed over its Malawi business to Helios Towers for a total consideration of US$55mln.
Away from the Footsie, Petropavlovsvk slumped a further 24% as it said sanctions imposed on its bank and principal offtaker Gazprombank effectively meant it couldn't sell any gold.
Gazprombank (GBP) is the off-taker of 100% of the group's gold production, said the Russia-based gold miner.
“The company is urgently considering with its advisers the implications for the Group's activities and financing arrangements resulting from GPB being designated for the purposes of an asset freeze.”
Shares slumped to 1.45p compared to 25p before the start of the Ukraine war
6.47am: Footsie predicted to open lower
FTSE 100 was being called slightly lower as raised concerns over the Ukraine conflict weighed on investor sentiment.
Financial spread firms had the UK index down 0.1% (11 points) ahead of the open of trading. In the US, the S&P 500 Index closed up 1.4%, while Hong Kong’s Hang Seng slipped 2.5%.
Joe Biden raised the stakes with Russia by warning that NATO “would respond” if the country used chemical weapons against Ukraine, speaking after an emergency summit in Brussels. The US president is visiting Poland today.
The UK blue-chip index has edged just over 1% higher this week, at the tail end of the corporate reporting season.
The gauge of Britain’s biggest stocks is little changed for the year, having recovered ground lost when the market was spooked by the potential repercussions of Russia’s invasion of Ukraine. Several companies have warned about an uncertain outlook and soaring energy costs triggered by the conflict.
Engineering firm Smiths Group (LSE:SMIN) Plc and water supplier United Utilities Group PLC (LSE:UU.) are among companies posting results on Friday, while economic data include consumer spending figures.
“We should see UK consumer spending continue to look solid in February, with retail sales set to rise by 0.5%, excluding fuel sales and 0.7% with fuel sales included,” wrote Michael Hewson, chief market analyst at CMC Markets UK.
6.50am: Early Markets - Asia / Australia
Asian shares were mixed on Friday as core consumer prices in Japan's capital rose at the fastest pace in more than two years in March.
The Tokyo core consumer price index (CPI), which excludes fresh food but includes energy items, lifted 0.8% year-on-year in March, the fastest pace since December 2019.
Japan’s Nikkei 225 rose 0.14% and South Korea’s Kospi gained 0.05%.
The Shanghai Composite in China dipped 0.94% while Hong Kong’s Hang Seng index tumbled 2.56%.
Australia’s S&P/ASX200 gained 0.26% to close at a two-month high to finish the week, supported by strong gains from the major banks and miners.