London open: Stocks edge down; AB Foods slumps on update
By Michele Maatouk
Date: Thursday 20 Jan 2022
(Sharecast News) - London stocks fell in early trade on Thursday, having opened in the black, as investors digested news that China had cut lending rates.
At 0935 GMT, the FTSE 100 was down 0.4% at 7,563.32.
Neil Wilson, chief market analyst at Markets.com, said: "After a decent start for stocks in Europe, the main bourses turned broadly lower, after more selling in the US, whilst Asian markets snapped a week's run of losses as China cut benchmark mortgage rates.
"As the UK and US tighten policy, they are leaving many peers behind...The Bank of Canada might hike next week, the RBA likely later this year. The ECB is way behind and looks deaf to cries of inflation - German PPI inflation rose to a record-breaking 24.2% in December, data this morning shows.
"The FTSE 100 marked a fresh post-pandemic high at almost 7,620 in early trade but turned lower to trade down about 0.3% after the first hour of trade."
Overnight, China's central bank trimmed two key lending rates in a bid to bolster activity in the country's property sector and in order to help small businesses.
The People's Bank of China cut its one-year loan prime rate by 10 basis points from 3.8% to 3.7%, as expected by economists, and the five-year loan prime rate by five basis points from 4.65% to 4.60%.
The reduction in the 10-year rate was the first since April 2020 and although the market consensus had been for a larger reduction, it was the first time in 21 months that both lending rates were reduced simultaneously.
In UK corporate news, Associated British Foods lost ground after it said fourth quarter sales at its Primark stores had been hit by the surge in Covid Omicron cases, but were now showing signs of recovery as it maintained full-year guidance.
Shell and BP gushed lower as oil prices dropped, while Compass and Games Workshop declined as they traded without entitlement to the dividend.
Consumer goods giant Unilever gained after it said late on Wednesday that it would not be lifting its £50bn offer for GlaxoSmithKline's consumer healthcare business. Glaxo was on the back foot.
Network International rallied after it said full-year revenue and adjusted EBITDA were ahead of market expectations, while Spirent Communications rose after lifting its full-year expectations for adjusted operating profit.
Premier Foods advanced as it said full-year profit was set to be above market expectations after three strong quarters of trading and after the Mr Kipling brand enjoyed its "biggest ever" Christmas.
Clay and concrete building products manufacturer Ibstock rose after it said full-year profit was set to be "modestly" ahead of its previous expectations following strong trading in the final quarter.
Market Movers
FTSE 100 (UKX) 7,563.32 -0.35%
FTSE 250 (MCX) 22,661.23 0.03%
techMARK (TASX) 4,495.91 0.05%
FTSE 100 - Risers
Fresnillo (FRES) 855.80p 1.98%
Dechra Pharmaceuticals (DPH) 4,204.00p 1.89%
Hikma Pharmaceuticals (HIK) 2,055.00p 1.73%
Prudential (PRU) 1,307.00p 1.59%
Rentokil Initial (RTO) 524.20p 1.59%
Pearson (PSON) 670.20p 1.55%
Unilever (ULVR) 3,730.00p 1.48%
Scottish Mortgage Inv Trust (SMT) 1,132.00p 1.25%
Polymetal International (POLY) 1,232.50p 1.15%
Intermediate Capital Group (ICP) 1,951.50p 1.11%
FTSE 100 - Fallers
Lloyds Banking Group (LLOY) 52.40p -2.75%
Royal Dutch Shell 'A' (RDSA) 1,828.40p -2.19%
Royal Dutch Shell 'B' (RDSB) 1,830.80p -2.17%
BP (BP.) 386.05p -2.04%
Compass Group (CPG) 1,675.00p -2.02%
GlaxoSmithKline (GSK) 1,634.80p -1.90%
Evraz (EVR) 557.60p -1.69%
Informa (INF) 560.00p -1.58%
Associated British Foods (ABF) 2,098.00p -1.55%
NATWEST GROUP PLC ORD 100P (NWG) 245.90p -1.48%
FTSE 250 - Risers
Premier Foods (PFD) 117.60p 6.91%
Spirent Communications (SPT) 244.80p 6.25%
Hochschild Mining (HOC) 129.10p 4.20%
Network International Holdings (NETW) 290.00p 3.87%
Petropavlovsk (POG) 16.03p 3.29%
Homeserve (HSV) 800.50p 2.89%
IG Group Holdings (IGG) 825.50p 2.80%
TUI AG Reg Shs (DI) (TUI) 250.20p 2.58%
Trainline (TRN) 248.60p 2.30%
Centamin (DI) (CEY) 95.46p 2.18%
FTSE 250 - Fallers
Ultra Electronics Holdings (ULE) 2,996.00p -3.29%
Safestore Holdings (SAFE) 1,271.00p -3.20%
Countryside Properties (CSP) 320.40p -2.55%
Energean (ENOG) 929.00p -2.21%
Discoverie Group (DSCV) 890.00p -2.20%
RHI Magnesita N.V. (DI) (RHIM) 3,600.00p -1.91%
Harbour Energy (HBR) 357.60p -1.87%
Wood Group (John) (WG.) 227.30p -1.64%
Hiscox Limited (DI) (HSX) 970.60p -1.44%
Carnival (CCL) 1,425.00p -1.44%
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