Proactive Investors -
- FTSE 100 heads lower, down 21 points
- New car registrations jump 26%
- Miners slip after Chinese GDP targets
New car registrations jump 26%
UK new car registrations grew by 26.2% year-on-year in February as 74,441 new cars joined Britain’s roads, according to the latest figures from the Society of Motor Manufacturers and Traders.
The figures show last month, which was the seventh month of consecutive growth, was the busiest February for car sales since 2020, as easing supply chain shortages steered the market closer to pre-pandemic levels.
UK new car market posts seventh straight month of growthhttps://t.co/BYcodag2QE pic.twitter.com/p91BSeQPlK— SMMT (@SMMT) March 6, 2023
Deliveries to private buyers up 5.8%, while purchases by large fleets jumped 46.2%. Business registrations rose by a mere 0.7%, or just nine cars.
The SMMT reports that hybrid electric vehicles (HEVs) recorded the most significant growth of all fuel types, up 40.0%. HEVs have a fossil fuel engine, which can charge an electric battery which can drive an electric drivetrain.
Petrol sales were 35.8% higher than a year ago, while diesel registrations fell by -7.0%.
Battery electric vehicle (BEV) registrations were up 18.2%, and make up one in six new UK car registrations, while sales of plug-in hybrids (PHEVs) were 1.0% higher.
Miners in the red
Mining companies dipped on Monday after the disappointing Chinese growth targets.
China set a modest economic growth target of around 5% for the year, with the nation’s top leaders avoiding any large stimulus to boost a recovery still being weighed down by weak business confidence and an uncertain property market.
Economists had expected a more ambitious target of above 5% following a rebound in consumer and business spending after the end of coronavirus restrictions.
Neil Wilson at markets.com said: “Caution seemed the order of the day across markets early on Monday as China set itself one of the lowest gross domestic product target in many years, hinting to investors that the big reopening boom may not be as positive for the global economy as hoped.”
“Beijing set a target of around 5% growth this year, creating a relatively low bar for the regime to clear. Oil and other industrial commodities slipped on the news, whilst basic resources stocks in London were hit, dragging the FTSE 100 marginally into the red at the open,” he added.
Anglo American was down 3.2%, Antofagasta PLC slipped 2.5% and Rio Tinto PLC fell 2.2%.
Dyson urges Chancellor not to lift business taxes
The Footsie remained around its opening levels in early exchanges with led by falls in mining companies after China issued growth targets that disappointed investors.
At 8.50am the FTSE 100 stood at 7,940.79, down 6.32 points, or 0.080% while the FTSE 250 was at 19,954.98, up 29.21 points, or 0.15%.
Victoria Scholar at interactive investor noted: “The FTSE 100 is lagging broader gains across Europe to start the week, trading just shy of the flatline. Miners like Anglo American , Antofagasta and Rio Tinto are languishing towards the bottom of the UK index after China issued a modest growth target of 5% for its economy this year.”
Susannah Streeter, head of money and markets, Hargreaves Lansdown suggested: “Financial markets are set for some choppy trade early this week as investors search for a fresh sense of direction.”
That direction may come later in the week when Fed chair Jerome Powell addresses Congress and US non-farm payrolls figures are released.
The Budget is also on the horizon as well in the UK and entrepreneur Sir James Dyson has urged the government not to lift taxes on businesses, claiming that a double tax grab will hurt the economy.
In a letter to Jeremy Hunt, seen by The Sun, Dyson warned the chancellor of the “unintended consequences” of hiking corporation tax and bringing in a new global levy on multinationals agreed by the OECD.
Big pre Budget intervention from Sir James Dyson: https://t.co/OyiPAC5tMA— Harry Cole (@MrHarryCole) March 5, 2023
Dyson, who has criticised Rishi Sunak’s administration before, told Hunt that the government has “done nothing but pile tax upon tax on to British companies.”
He reminded the chancellor that pharmaceuticals firm AstraZeneca recently chose to build a US$360m advanced manufacturing factory in Ireland, not the UK, and cited ‘discouraging’ UK tax rates.
Elsewhere, and Tesco PLC (up 1.1%) and Kingfisher PLC (up 1.1%) benefited from an upgrade by Jefferies to buy from hold.
FTSE edges lower in early exchanges
The FTSE 100 made a subdued start on Monday with little major economic or corporate news to provide direction.
At 8.15am London’s lead index was down 4.01 points at 7,943.10 while the FTSE 250 was at 19,944.51, up 18.74 points, or 0.094%.
Investors will be eyeing US non-farm payrolls figures on Friday while the chair of the Federal Reserve Jerome Powell will appear before the US Congress tomorrow.
"Looking at the latest set of data, the U-turn of easing inflation and last month's blowout jobs figures, we don't expect to hear anything less than hawkish from Powell. But it's always possible that a word like 'disinflation' slips out of his mouth, and that we get a boost on risk," said Swissquote Bank's Ipek Ozkardeskaya.
On a quiet day of corporate news WANdisco became the latest the company to say it was looking at an additional listing in the US although it stressed it remained committed to the AIM market. Shares rose 1.1%.
Shell’s new boss told The Times that the US was a more attractive proposition for energy investment than the UK.
Wael Sawan told the paper that the UK government should look to recent actions in the US, such as the Inflation Reduction Act, which gives a US$369bn subsidy package to encourage domestic green investment.
Sawan said he would "think twice" about further oil investment, citing "more attractive" propositions, such as the US Gulf of Mexico. Shares opened 0.2% higher.
AstraZeneca PLC (LSE:AZN) noted positive high-level results from an analysis of the ongoing Destiny-PanTumor02 phase II trial for Enhertu. Enhertu, or trastuzumab deruxtecan, met the target for objective response rate and showed a durable response across multiple HER2-expressive advanced solid tumours in heavily pretreated patients. Enhertu is being jointly commercialised by Astra and Daiichi Sankyo. Shares were little changed.
Shipping services company Clarkson reported a sharp rise in annual earnings, driven by a strong performance in its broking division. Investors liked the update marking shares up by 2.4%.
Pre-tax profit for the 2022 calendar year came in at £100.1mln, compared with £69.1mln a year earlier. The total dividend was lifted to 93p a share from 84p.
One early faller was Reckitt Benckiser which was downgraded to hold from buy by Deutsche Bank. The German bank left its price target unchanged at 6,500p. “We feel there are limited catalysts for a near-term re-rating,” the broker said. Shares fell 1%.
Heading the other way was B&M European Value Retail SA, up 1.1%, as RBC upgraded to outperform with a 550p price target.