London open: FTSE little changed after US tech results, ahead of payrolls

By Michele Maatouk

Date: Friday 03 Feb 2023

London open: FTSE little changed after US tech results, ahead of payrolls

(Sharecast News) - London stocks were steady in early trade on Friday following disappointing US tech results and as investors erred on the side of caution ahead of the latest non-farm payrolls report.
At 0820 GMT, the FTSE 100 was flat at 7,820.16.

Sentiment took a hit after earnings from Amazon, Alphabet and Apple all disappointed.

Richard Hunter, head of markets at Interactive Investor, said: "After a generally strong showing from US markets, sentiment soured slightly after the closing bell.

"The next piece of the economic jigsaw will follow this afternoon with the release of the latest non-farm payrolls data. The current consensus is that 185,000 jobs will have been added in January, as compared to 223,000 the previous month, in what would be the lowest reading for two years.

"At the same time, unemployment is expected to tick up slightly to 3.6%, with hourly wage inflation remaining flat. Such a reading would add fuel to the fire that the end of the Federal Reserve aggression is nearing, although any sharp positive deviations would unsettle investors and prompt a rethink around the central bank's next move."

The payrolls report is due out at 1330 GMT, along with the unemployment rate and average earnings. On home shores, the S&P Global/CIPS services PMI for January is scheduled for release at 0930 GMT.

In the meantime, investors were mulling over the latest retail industry data, which showed that footfall strengthened last month as shoppers sought out a bargain in the January sales and employees headed back to the office.

The latest BRC-Sensormatic IQ Footfall Monitor showed total footfall jumped 12.5% year-on-year in January, down 2.6 percentage points on a strong December but comfortably ahead of the three-month average of 10.3%.

Within that, high streets saw footfall increase 20.2%, a 0.5 percentage point improvement on December, and shopping centres reported a 12.4% jump year-on-year. Retail parks, however, saw footfall decline 3.5%.

Total footfall also remains below pre-pandemic levels, falling 6.5% against January 2019.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Footfall saw strong growth as employees made more trips to the office and international tourism improved, compared to last year when some Covid restrictions were in place.

"Growth was most pronounced in high streets and shopping centres, as many shoppers sought out a bargain in the January sales. Retail parks faltered as the cost-of-living crisis put many shoppers off buying big ticket home products often located there."

On the corporate front, there was no FTSE 350 news of note but retailers were on the move after Deutsche Bank put out a note on the sector.

B&M European Value Retail was the standout gainer on the FTSE 100 after DB upgraded the shares to 'buy' from 'hold'. Marks & Spencer rose on the back of the same upgrade.

On the downside, however, B&Q owner Kingfisher was the worst performer on the top-flight index after Deutsche cut its rating to 'hold' from 'buy'. It applied the same rating downgrade to Pets at Home, Wickes and Asos.

Also in broker note action, Direct Line was cut to 'underweight' at Barclays, while IWG was downgraded to 'equalweight'.

Standard Chartered was lifted to 'buy' at Investec, while Provident Financial was cut to 'hold' at Peel Hunt.

Market Movers

FTSE 100 (UKX) 7,820.16 0.00%
FTSE 250 (MCX) 20,614.69 0.00%
techMARK (TASX) 4,528.51 0.00%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 486.80p 2.03%
Pershing Square Holdings Ltd NPV (PSH) 3,015.00p 1.01%
Shell (SHEL) 2,357.00p 0.83%
Reckitt Benckiser Group (RKT) 5,672.00p 0.82%
Hiscox Limited (DI) (HSX) 1,130.50p 0.62%
JD Sports Fashion (JD.) 182.60p 0.61%
Rio Tinto (RIO) 6,100.00p 0.59%
Hargreaves Lansdown (HL.) 949.40p 0.57%
Compass Group (CPG) 1,894.00p 0.45%
BAE Systems (BA.) 833.20p 0.39%

FTSE 100 - Fallers

Kingfisher (KGF) 285.00p -2.23%
Persimmon (PSN) 1,501.50p -1.93%
Admiral Group (ADM) 2,262.00p -1.65%
Vodafone Group (VOD) 93.31p -1.61%
Scottish Mortgage Inv Trust (SMT) 793.20p -1.51%
SEGRO (SGRO) 908.40p -1.28%
Auto Trader Group (AUTO) 629.20p -1.16%
Entain (ENT) 1,549.00p -1.09%
HSBC Holdings (HSBA) 585.00p -1.02%
Unite Group (UTG) 1,043.00p -0.95%

FTSE 250 - Risers

Clarkson (CKN) 3,360.00p 1.97%
SSP Group (SSPG) 280.00p 1.86%
AJ Bell (AJB) 360.00p 1.64%
Marks & Spencer Group (MKS) 163.45p 1.49%
Chemring Group (CHG) 286.50p 0.88%
Volution Group (FAN) 391.00p 0.77%
Diversified Energy Company (DEC) 112.20p 0.72%
Close Brothers Group (CBG) 1,001.00p 0.65%
IP Group (IPO) 64.30p 0.63%
Indivior (INDV) 1,916.00p 0.58%

FTSE 250 - Fallers

Trainline (TRN) 280.70p -4.10%
ASOS (ASC) 948.50p -3.41%
Great Portland Estates (GPE) 589.00p -2.40%
Molten Ventures (GROW) 386.00p -2.28%
Dr. Martens (DOCS) 163.30p -2.27%
Quilter (QLT) 99.68p -2.23%
Direct Line Insurance Group (DLG) 183.50p -2.05%
Wizz Air Holdings (WIZZ) 2,816.00p -2.05%
Wood Group (John) (WG.) 137.00p -2.00%
IWG (IWG) 193.90p -1.92%


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