London open: Stocks edge higher after positive US session; Fed decision eyed
By Michele Maatouk
Date: Wednesday 29 Jan 2020
(Sharecast News) - London stocks edged higher in early trade on Wednesday, taking their cue from a positive session on Wall Street and with sentiment underpinned by solid results from Apple, as investors eyed the latest policy announcement from the Federal Reserve.
At 0840 GMT, the FTSE 100 was up 0.4% at 7,512.59.
Spreadex analyst Connor Campbell said: "Despite the number of Chinese coronavirus cases now outstripping the SARS epidemic of the early noughties, and the Hang Seng entering the Lunar New Year down 3%, the European indices pushed ahead with their rebound on Wednesday.
"It helped that Apple smashed it out of the park overnight. The demand for iPhone 11s drove Q1 sales up 8% year-on-year to £91.8 billion, topping analysts' estimates by around $3 billion."
However, Campbell pointed out that "even that blockbuster update wasn't free of the coronavirus".
"Apple has a huge, often performance-dictating, exposure to China, causing Tim Cook to reassure investors it was 'closely monitoring' the situation in the country. After all, reduced store hours and a populace on lockdown could come to impact the tech giant's second quarter," he said.
Market participants were looking ahead to the Fed rate announcement at 1900 GMT.
Neil Wilson, chief market analyst at Markets.com, said: "We expect no change to the fed funds rate and for the FOMC statement to describe policy appropriate. Market pricing indicates no chance of a cut. The emergence of the coronavirus in China will warrant a degree of caution in the outlook from the Fed, whilst there is little upward pressure on prices to suggest a shift in the FOMC's stance. The signing of the US-China trade deal only confirms priors and doesn't materially alter the outlook from last month."
In equity markets, 3i Group was the star performer after an upgrade to 'overweight' at Morgan Stanley, while Premier Inn owner Whitbread rallied on the back of an upgrade to 'buy' at HSBC.
Builders' merchant Travis Perkins gained after it reported "strong" fourth-quarter sales at Wickes and said plans to demerge the home improvement business this year were on track.
Low-cost airline Wizz Air flew higher after it lifted its full-year net profit guidance as it reported a record profit for the third quarter. The company said it now expects net profit of between €350m and €355m in 2020, up from previous guidance of between €335m and €350m.
McCarthy & Stone was under the cosh on news that private equity firm Anchorage Capital has placed 43m shares in the retirement housebuilder. According to terms seen by Bloomberg, the shares are being placed at 145p, with Goldman Sachs as bookrunner.
Avast suffered heavy losses for the second day running after Peel Hunt initiated coverage of the stock on Tuesday with a 'sell' rating. It said that in the long term, the cybersecurity company is facing a number of "existential threats" such as Microsoft's native cybersecurity, which is proving to be a "serious challenger".
Burberry - which has a large exposure to China - was in the red yet again as investors continued to fret about the impact of the coronavirus.
Market Movers
FTSE 100 (UKX) 7,512.59 0.43%
FTSE 250 (MCX) 21,504.82 0.33%
techMARK (TASX) 4,239.15 0.16%
FTSE 100 - Risers
3i Group (III) 1,129.00p 2.73%
NMC Health (NMC) 1,414.50p 2.28%
St James's Place (STJ) 1,153.50p 2.03%
Whitbread (WTB) 4,434.00p 1.93%
Kingfisher (KGF) 208.30p 1.86%
TUI AG Reg Shs (DI) (TUI) 829.00p 1.62%
Evraz (EVR) 372.30p 1.53%
Royal Bank of Scotland Group (RBS) 221.20p 1.51%
Mondi (MNDI) 1,608.50p 1.42%
Johnson Matthey (JMAT) 2,730.00p 1.41%
FTSE 100 - Fallers
Polymetal International (POLY) 1,251.50p -0.75%
Centrica (CNA) 87.76p -0.66%
Flutter Entertainment (FLTR) 8,882.00p -0.43%
SSE (SSE) 1,501.00p -0.37%
Spirax-Sarco Engineering (SPX) 8,885.00p -0.28%
Diageo (DGE) 3,138.50p -0.25%
Rightmove (RMV) 664.00p -0.18%
Coca-Cola HBC AG (CDI) (CCH) 2,791.00p -0.14%
Royal Dutch Shell 'A' (RDSA) 2,146.50p -0.12%
Ocado Group (OCDO) 1,306.00p -0.11%
FTSE 250 - Risers
Virgin Money UK (VMUK) 179.95p 4.32%
Crest Nicholson Holdings (CRST) 489.80p 3.64%
Tullow Oil (TLW) 54.66p 3.13%
Bakkavor Group (BAKK) 139.20p 2.96%
Quilter (QLT) 164.55p 2.56%
Travis Perkins (TPK) 1,610.00p 2.52%
SIG (SHI) 93.90p 2.12%
Energean Oil & Gas (ENOG) 840.00p 2.07%
William Hill (WMH) 178.90p 2.02%
Galliford Try (GFRD) 140.00p 1.97%
FTSE 250 - Fallers
Avast (AVST) 452.00p -6.19%
McCarthy & Stone (MCS) 147.60p -5.20%
Barr (A.G.) (BAG) 608.00p -3.03%
Stagecoach Group (SGC) 137.90p -3.02%
Sirius Real Estate Ltd. (SRE) 89.00p -2.52%
Marston's (MARS) 104.90p -1.87%
Foresight Solar Fund Limited (FSFL) 116.50p -1.69%
Kainos Group (KNOS) 848.00p -1.17%
Hochschild Mining (HOC) 163.40p -1.15%
Euromoney Institutional Investor (ERM) 1,276.00p -1.09%
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