Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FTSE 100 falls to fresh lows as wall Street makes weak start

Published 16/05/2023, 14:35
Updated 16/05/2023, 14:40
© Reuters. FTSE 100 falls to fresh lows as wall Street makes weak start

© Reuters. FTSE 100 falls to fresh lows as wall Street makes weak start

Proactive Investors -

  • FTSE 100 well off session peak of 7,804.93
  • US stocks down awaiting US debt ceiling talks
  • Vodafone (LON:VOD) hits 16-year low as results disappoint, axes 11,000 jobs

'Farm to Fork' pressure

New research from consumer group Which? shows prices for some grocery items have doubled over the past year, while others including some prices for onions, sausages and yoghurt have risen over 85%.

This has led to calls for Prime Minister Rishi Sunak to help struggling consumers with sky-high supermarket price inflation, just as an investigation has been launched by the UK competition watchdog over high food and fuel prices.

Downing Street is hosting a 'farm to fork' summit today with bosses from the supermarket, farming and food production industries, while the Competition and Markets Authority (CMA) said overnight that it is stepping up its probe into the grocery sector, with concerns that "weak competition" may be resulting in consumers paying higher prices than they should be.

Grocery industry inflation data showed prices in April were 17.3% above where they were the year before, while the latest official inflation numbers showed a 19.1% jump in food prices in March, while world wholesale food costs dropped by 19.7% year-on-year.

Inflation on supermarket own-label budget items stepped up to 25% in April, according to data from Which, though overall food price inflation had started to ease to 17.1% from 17.2% the month before.

PM Sunak was urged by Which to "challenge supermarket chief executives to do more" at the food summit.

"He should ask them to take urgent action to help consumers cope with rampant food price increases by ensuring that smaller convenience stores stock a range of essential budget lines that support a healthy diet, especially in areas where they are most needed," the consumer group said.

It's a gas

Centrica (LON:CNA), the owner of British Gas is firmly in favour with analysts at US bank Citi, who have reiterated a 'buy' recommendation ahead of what they say are four big catalysts coming up.

Thursday sees the first of these potential shots in the arm with an LNG teach-in focused on the sustainability of earnings from its trading arm (EM&T). Next, regulator Ofgem’s underlying profit [EBIT] margin review also can structurally uplift Centrica’s energy supply remuneration.

The Citi analysts also expect Centrica's next trading statement to highlight robust retail profits due to a clawback of past costs, while, fourthly, first-half results might see a further £500mln cash return.

“In our view, the Centrica shares are cheap, with the prospect of c.20% from its market cap being returned over 18 months, currently trading on an unchallenging one-year forward 5x P/E and 2x EV/EBITDA," they concluded.

Centrica shares were up 1.2% to 119p.

A look at the risers and fallers on the junior market

Rurelec PLC (LON:RUR) shot up nearly 60% after the power-production company entered into a conditional agreement to sell its Argentinian Interests to Verafont, Basic Energy Limited and Esteban Reynal for a consideration of up to US$5mln (£4mln).

Glantus Holdings PLC (LON:GLAN) shares rose 13% after the provider of Accounts Payable automation and analytics solutions reported upbeat trading for the first quarter (Q1) of 2023 and revealed a change of chief financial officer (CFO).

On The Beach Group PLC (LON:OTB) fell 9% after investors took the view that the company's first-half performance may leave the online travel agent struggling to meet some punchy full-year targets.

Genus PLC (LON:GNS) shares fell 5% following a cut in its full-year profit forecast due to difficulties in the animal genetics firm's Chinese porcine business.

Shoe Zone PLC (LON:SHOE) shares fell 12.5% to 210p on Tuesday morning as the retailer reported a halving in first-half profits.

Read more on Proactive Investors UK

Disclaimer

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.