Proactive Investors -
- FTSE 100 firms but off highs, sterling advances
- British Airways (LON:ICAG) owner, IAG, riases profit guidance
- IHG (LON:IHG) falls despite strong growth; CEO to step down
German factory orders tumble, FTSE off highs
German factory orders fell 10.7% in March from the previous month, a much bigger drop than economists expected, raising concerns about a sharp slowdown in Europe’s biggest economy.
The slide in new orders for manufacturers was the largest since pandemic lockdowns hit in April 2020 and reflected declines in all sectors except consumer goods.
Foreign orders were down 13.3% while domestic orders dropped 6.8%.
Claus Vistesen Chief Eurozone Economist at Pantheon Macroeconomics said: "This is a terrible headline, but a big fall had been coming given weak surveys and the outsize increase in one-off major orders, mainly in transport equipment."
"More generally, it is difficult to know what to think about these data."
"Usually we only see this kind of collapse in manufacturing orders when Germany is about to go into recession, but Germany has effectively been tiptoeing on the edge of recession since the fourth quarter."
"So, is it about to get worse," he asked.
"It’s possible, but given the weakness in the surveys, it is strange that manufacturing orders have held up for this long."
Meanwhile, the FTSE's bright start is fading, now up just 22 points.
FTSE 100 holds gains, sterling advances
The FTSE 100 is continuing it strong progress on Friday, now up 47 points, while the pound has jumped above US$1.26, levels not seen since June 2022.
Victoria Scholar, head of Investment, interactive investor says, “After slumping to a one-month low on Thursday, the FTSE 100 is trading higher lifted by British Airways’ parent company IAG which has taken to the skies following first quarter earnings."
IAG's raised guidance remains a firm feature, up 3%, providing support to easyJet PLC (LON:EZJ), up 1.2%, and Wizz Air Holdings PLC (LON:WIZZ), up 1.4%.
Meanwhile, sterling continues to march higher with the pound up a further 0.4% to US$1.2618 on expectations that US interest rates have peaked.
The oil price also rallied with Brent crude up 1.25% to US$73.41 boosting shares in BP PLC (LON:BP) and Shell (LON:RDSa), up 3.1% and 2.1% respectively.
Banks also rebounded with Barclays (LON:BARC) up 3%, NatWest (LON:NWG) up 2.4% and Lloyds Banking Group PLC (LON:LLOY) up 2%.