Yahoo Finance FTSE 100 Live: Blue-chip index at 18-month low, pound moves back toward $1.13
Traders are braced for more volatility as investors absorb more stronger-than -forecast US inflation numbers, that could signal another big hike in interest rates by the Federal Reserve.
Headline CPI for September eased slightly to 8.2% from the previous month’s 8.3% annual rate, but the month-on-month reading of a 0.4% rise was bigger than expected and likely to fuel rate rise expectations ahead of the Fed’s meeting next month.
It’s been another difficult week for markets, with the FTSE 100 index closing last night at an 18-month low after heavy falls for banking and housebuilding stocks.
FTSE 100 Live Thursday
US inflation release adds to market jitters
FTSE 100 at 18-month low after run of losses
EasyJet forecasts £190 million loss, demand strong
New York stocks fall sharply as inflation data wipes out the prospect of a rebound
Thursday 13 October 2022 14:41 , Michael Hunter
More stronger-than-expected US inflation data hit Wall Street stocks, wiping out the prospect of a rebound and leading to an opening fall for the S&P 500.
The broad New York share index fell by over 80 points to 3496.45 in initial trade, a decline of over 2%. Before the publication of the Consumer Price index of September in the run up to the market open, futures trade has predicted a rise of around 0.7%.
The CPI index for the month looked to increase the prospects of further aggressive rate hikes from the Federal Reserve, which has repeatedly voiced its determination to cool inflation.
Headline CPI for September eased slightly to 8.2% from the previous month’s 8.3% annual rate, but the month-on-month reading of a 0.4% rise was bigger than expected.
Pound holds $1.12 on Westminster rumours of Budget U-turn even as dollar rallies after US inflation numbers
Thursday 13 October 2022 14:10 , Michael Hunter
Sterling stayed above the $1.12 level amid growing talk in Westminster of a potential U-turn on the government’s tax plans into an update on them due at the end of the month.
The pound remained higher overall -- up 1% at $1.1201 -- even with a wider trend across currency markets after more stronger-than-forecast inflation data pointed to further aggressive rate rises from the Federal Reserve.
The dollar index, which tracks the US currency against a range of other currencies, was up 0.2%, reading 113.59.
Wall Street stocks expected to fall in opening trade after US inflation data
Thursday 13 October 2022 13:43 , Michael Hunter
There was little sign that the Federal Reserve’s aggressive fight against inflation was working in September, with the consumer price index for the month coming in higher than expected.
After an initial sanguine reaction to the data, Wall Street futures trade cooled and pointed to an opening fall of around 62 points to 3526.75, a decline of almost 2%. Beforehand, it had indicated gains of around 0.7%
Headline CPI for September eased slightly to 8.2% from the previous month’s 8.3% annual rate, but the month-on-month reading of a 0.4% rise was bigger than expected.
It looked to leave the way open for further jumbo rate hikes from the US central bank,
Pound heads back toward $1.13 amid talk of further changes to government Budget plans
Thursday 13 October 2022 13:15 , Michael Hunter
Sterling is up over a cent and is heading back toward $1.13, with prices of UK government debt also rallying amid talk in Westminster of growing pressure on the government to further revise its tax plans.
The moves in UK asset priced came toward the end of the Bank of England’s current intervention in the bond market.
The BoE has signalled it will finish its £65 billion scheme as scheduled at the end of this week, implying that pension funds have had enough time to sell their bond holdings in order to get their finances in order after the slump in bond prices after the government’s so-called mini-Budget.
A sharp drop in the value of gilts, as UK bonds are known, caused worries about the financial position of some fund managers, who sell them in order to meet their complex financial commitments.
When the BoE intervened, the yield on the longest-dated, 30-year gilts, was trading around 5%, as the return demanded by investors to hold the debt rose in response to its lower price. On Thursday, the yield eased to 4.4%, having closed at 4.81% yesterday. The benchmark 10-year gilt was yielding 4.245 per cent, having closed at 4.417% yesterday.
Amid a febrile atmosphere at Westminster, Cabinet minister James Cleverly repeatedly refused to rule out another U-turn, this time over Mr Kwarteng’s decision to ditch the previously planned increase in corporation tax from 19p to 25p next April.
He also told rebel MPs not to seek to topple Ms Truss, a warning believed to be unprecedented given the Prime Minister has only been in No10 for 38 days.
BlackRock sees third-quarter profit fall
Thursday 13 October 2022 11:55 , Simon Hunt
BlackRock has become the latest victim of global economic turmoil as the world’s largest asset manager reported a fall in third-quarter profits.
Profits dropped 17% to $1.4 billion for the three months to 30 September, higher than analyst expectationa according to Refinitiv data.
The value of the firm’s assets under management dropped 16% to $8 trillion led by a drop in the value of investments in European and Asian markets.
Biggest morning movers
Thursday 13 October 2022 11:00 , Simon Hunt
Three hours into this morning’s session, here’s a look at some of the price action on the FTSE 100:
GSK vaccine progress fails to lift shares, FTSE 100 flat
Thursday 13 October 2022 10:26 , Graeme Evans
GSK shares have fallen despite encouraging trial results on a potential blockbuster vaccine.
GSK said its respiratory syncytial virus (RSV) vaccine candidate for people aged over 60 showed overall efficacy of 82.6%, with data from the late stage clinical trial also revealing a 94.1% decline in severe disease.
There are currently no RSV vaccines despite 60 years of research, with GSK currently in a race with Pfizer and Johnson & Johnson to make the breakthrough for a market that analysts believe could be worth £5 billion.
UBS said today: “Blockbuster vaccines do not come around very often, and the focus and excitement is hence understandable.”
Investors were unmoved by today’s progress, however, as their focus remains on the potential for US litigation around heartburn drug Zantac that has contributed to a recent slide in GSK’s valuation.
Shares were more than 1750p in mid-July but now stand at 1345p, including today’s fall of 13.5p. UBS has a price target of 1820p.
The bank said: “Overall this data looks pretty good and may offer some upside to consensus. However, this is unlikely to be enough to shift the focus from the Zantac litigation at this point.”
GSK’s chief scientific officer Tony Wood described the trial results as “truly exceptional” given that RSV is one of the major infectious diseases still without a vaccine.
The lacklustre performance of GSK shares reflected another downbeat session as the FTSE 100 index remained near an 18-month low, falling 11.57 points to 6814.58 ahead of the release of pivotal US inflation figures.
Stocks including Taylor Wimpey, Tesco and WPP were on the fallers board as they began trading without the right to their latest dividend awards. NatWest, Lloyds and Rolls-Royce all rose after sustaining heavy losses yesterday.
Business intelligence stock Informa posted one of the biggest top flight gains, lifting 11p to 546.2p after Goldman Sachs highlighted a “buy” recommendation and 775p target price.
The FTSE 250 index improved 25.62 points to 16,636.78, aided by a 2% recovery for housebuilders Redrow and Bellway and 3% gain for fast-fashion retailer ASOS.
Snapshot: FTSE 100 sinks to 18-month lows
Thursday 13 October 2022 10:01 , Simon Hunt
Here’s a look at the FTSE 100 index over the past two years as it dips under 6,900 to hit 18-month lows.
Hays latest to see signs of hiring slowdown as economic woes mount
Thursday 13 October 2022 09:42 , Simon Hunt
Hays has become the latest recruitment firm to flag signs of a hiring slowdown as it said mounting economic gloom was impacting activity in the UK and United States.
The group said it has seen hiring activity drop “modestly” in some of its markets worldwide “as macroeconomic uncertainties increase”.
Hays said this was being seen across the UK and Ireland, which accounts for more than a fifth of net fees, as well as the US and Australia and New Zealand.
It comes after rival PageGroup said on Wednesday that it was seeing a “slight softening” in confidence among firms recruiting across most of its markets worldwide.
Hays shares went up 0.4% to 14p this morning.
Sport promoter World Chess set for €8 million float on the London Stock Exchange next month
Thursday 13 October 2022 09:29 , Simon Hunt
World Chess is to check around for a knight in shining armour for an €8 million (£7 million) buy out after the promotion body’s board decided to float it on the open market.
The organisation that was established in 2017 and promotes the “mass market appeal of chess globally”announced its intention to float on the London Stock Exchange. The offer is expect to take place next month on the main market for listed securities.
World Chess controls the FIDE gaming platform, events and competitions, clubs, media, talent, sponsorship and merchandise. The body said it wanted to develop the sport so that it “looks like a hybrid of e-sports with a Nobel prize awards ceremony”.
OnTheMarket says property demand remains strong but prices could fall
Thursday 13 October 2022 09:00 , Simon Hunt
Property portal OnTheMarket said it was still seeing strong demand for homes but the firm warned prices could fall amid dwindling buying power due to cost of living pressures and mortgage rate increases.
OnTheMarket boss Jason Tebb told the Standard: “Six months ago there was a clear supply and demand market at play with hundreds of people looking at one property, but now there’s a surge of properties coming into the market.
“As mortgage affordability makes things more challenging there may be a cooling off of prices and in some areas a reduction in house prices…[but] I’m not hearing there are swathes of people looking to make low offers and trying to pick up bargains.”
The firm reported a 38% drop in operating profit to £1.3 million in the year to July 2020 but sales grew 14% to £17 million.
Tebb said the firm’s earnings were set to fall in line with forecasts, as the company’s performance was not linked to house price activity because of its ongoing contracts with estate agents and housebuilders.
OnTheMarket shares climbed 1.4% to 75p.
FTSE 100 down 0.5%, housebuilders hit by fresh falls
Thursday 13 October 2022 08:27 , Graeme Evans
The FTSE 100 index is down 33.85 points at 6791.82, a bigger-than-expected fall of 0.5% caused by worries over higher interest rates after last night’s release of Federal Reserve meeting minutes.
Hargreaves Lansdown senior analyst Susannah Streeter said: ‘’The realisation that the Federal Reserve is in it for the long haul when it comes to setting and maintaining higher interest rates has sent a fresh wave of worry through financial markets.”
She highlighted a small ray of relief in terms of inflationary pressures after Brent crude futures eased back towards $93 a barrel.
Big fallers in London’s top flight again included housebuilders after falls of 6% and 2% for Taylor Wimpey and Barratt Developments respectively. Advertising and marketing business WPP also dropped 2%.
The FTSE 250 index was 25.30 points lower at 16,588.79, although easyJet shares rose 2% on the back of its latest trading update.
EasyJet flying towards a £190 million loss
Thursday 13 October 2022 08:23 , Simon Hunt
EasyJet is heading for loss of up to £190 million including £75 million of disruption costs but said demand remains strong.
The airline said it expects to deliver underlying pre-tax profits of between £470 million and £490 million over its final quarter to September 30 as passenger numbers soared to 24 million and revenues leapt to around £2.5 billion from £1 billion a year ago.
It signalled resilient demand despite the cost-of-living crisis, with its flight programme during October and Christmas weeks back to levels seen before the pandemic.
The group is expecting to fly 20 million seats in the last three months of 2022 – up 30% on a year ago – while it added it was already seeing demand for next summer.
World Chess makes stock market move
Thursday 13 October 2022 08:06 , Graeme Evans
World Chess is to list on the London stock market in a move set to raise eight million euros (£7 million).
Established in 2017, World Chess is the holding company of a group which aims to promote the mass market appeal of chess globally. This includes the organisation of top-level tournaments and operation of the online gaming platform of the International Chess Federation.
Chief executive Ilya Merenzon said: “There continues to be an explosion of interest in chess, which has accelerated through recent years and even more during the pandemic.
“To keep pace with this growth we are scaling up our operations and expanding our range of services internationally.”
Dealings in the shares will commence next month under the ticker CHSS. Novum Securities is acting as financial adviser and retail investors will be able to register their interest in the IPO by applying through PrimaryBid.
London casinos lead as gamblers return to Rank Group’s but spend less per visit
Thursday 13 October 2022 07:58 , Michael Hunter
Rank Group has said that the number of people visiting its London casinos is growing, but people are spending less during their nights out, leading to an overall decline in net gaming revenue.
The improvement in visits is significantly stronger in London, with net gaming revenue (NGR )up 21%, offsetting a 17% fall outside the capital. With spending constrained, overall NGR fell by 5%, to an average of £5.7 million a week.
Revenue at its Mecca bingo venues rose 2% in the quarter, with visits up 4% and spending down 2%.
John O’Reilly, Chief Executive, said: “The Group has a number of key initiatives underway to improve long term revenues. These include some key refurbishment projects and new electronic roulette and jackpot games in Grosvenor; improving the gaming machine offering in Mecca [and] increased personalisation and a stronger live casino offering in the UK digital business.”
Entain looks to world cup boost as online sales fall
Thursday 13 October 2022 07:34 , Simon Hunt
Gaming and sports betting business Entain is hoping for a world cup boost as the firm said its earnings were expected to hit forecasts.
The firm said online gaming revenues were down 2% on last year, counterbalanced by a 10% rise in retail gaming revenues. Earnings before income tax were set to fall between £925-£975 million for the year.
Entain boss Jette Nygaard-Andersen said: “We have healthy momentum across the business and look forward to a strong finish to the year which includes the World Cup.
“Looking ahead, we remain vigilant of the economic backdrop. However, our diversified revenue base and robust business model enable us to remain confident in our ability to deliver on our growth and sustainability strategy."
S&P extends losing run, FTSE 100 seen lower
Thursday 13 October 2022 07:30 , Graeme Evans
The S&P 500 index last night recorded a sixth consecutive session in the red, finishing at its lowest level since November 2020.
The prospect of another inflation print above 8% means the leading benchmark is in danger of further losses that will make this the worst run since February 2020.
Last night’s Federal Reserve meeting minutes contained few surprises, with policymakers restating their determination to tackle inflation.
With little sign of a shift in their approach, Wall Street is braced for a further 0.75% rate hike when Federal Reserve members next meet in early November.
It was also another disappointing session in London yesterday as the FTSE 100 index closed at an 18-month low, dragged lower by sharp falls for banks and housebuilders.
The declines reflected the sharp rise in long term yields as markets continue to fret about the Government’s fiscal plans and the prospect of a bumper rate hike by the Bank of England next month.
CMC Markets expects the FTSE 100 to open 11 points lower at 6815. The pound, meanwhile, stood at $1.107 this morning.
