London pre-open: FTSE set for another positive start
By Josh White
Date: Friday 29 Apr 2022
(Sharecast News) - London's top-flight index was set for another positive open on Friday following a solid session on Wall Street overnight, as investors waded through another flood of earnings reports.
The FTSE 100 was expected to open up 1.04%, or 77.7 points, having closed 1.13% higher on Thursday at 7,509.19.
"The Nasdaq has see-sawed its way through earnings season, ultimately ending 10% down in the last month," said Hargreaves Lansdown lead equity analyst Sophie Lund-Yates.
"Huge insecurities around the long-term attractions of growth stocks in a high inflationary environment have sent jitters through global markets.
"Long seen as the untouchables of the investing universe, big tech has had a rude awakening - there have been times in recent weeks when some big tech names have come within a whisker of being considered truly valuable."
Lund-Yates said belt-tightening had caused the investment cases of some huge names to be called into question, with "sticky" subscription-based revenues not proving as reliable as once thought.
"The spate of volatility is unlikely over for growth names, but for those with a long-term investing horizon there are some diamonds among this rough."
On the economic front, industry research showed the number of shops standing empty fell in the first quarter, as the UK economy reopened following the worst of the pandemic.
According to the latest BRC-LDC Vacancy Monitor, the overall vacancy rate decreased to 14.1% in the first three months of the year, 0.3 percentage points down on the fourth quarter and only the second quarter of falling vacancy rates since the start of 2018.
All locations reported falls, with vacancies easing to 14.1% from 14.4% three months earlier on the high street and to 19.0% from 19.1% in shopping centres.
In retail parks, the number of empty shops eased by 0.7 percentage points to 10.6%.
"The economy has fully reopened, with more city workers back in the office and more tourists out on the streets," said Helen Dickinson, chief executive of the British Retail Consortium.
"This allowed some businesses to grow and invest in repurposing and reopening empty units, especially in retail parks and high streets."
In equities, packaging company Smurfit Kappa said that both revenue and underlying earnings had grown by a third in the three months ended 31 March, reflecting the "significant, ongoing capital investment" made by the group to support customer growth and security of supply.
It stated revenues were up 33% year-on-year at €3.02bn, while EBITDA had also grown 33% to €514.0m, with an EBITDA margin of 17% for the period.
The FTSE 100-listed firm added that its first-quarter performance had set a "strong foundation" for 2022.
Building materials supplier Travis Perkins said higher prices would form a higher proportion of sales growth this year due to inflation as it posted a rise in first-quarter sales and maintained guidance
The company said total sales for the three months to 31 March were up 13.6%.
"The group's forecast for materials price inflation, which was originally expected to ease into the second half of the year, is now more uncertain with pricing likely to form a higher proportion of sales growth across the year than previously thought," the company said.
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