- FTSE 100 opens lower
- Ex-dividend stocks weigh
- AO World advances after results
FTSE 100 remained lower in early trading as several blue chip stocks traded ex-dividend today and following falls in US and Asian markets overnight.
By 9.00am the lead index was trading down 13.16 points at 7,502.59 although the FTSE 250 made solid early progress up 41.12 points at 20,068.16.
Richard Hunter, Head of Markets at interactive investor, commented: “The muted end to the US trading session and a lacklustre performance across Asian markets left the FTSE100 with little inspiration, with the index opening fractionally lower, reducing its gain in the year to date to 1.5%.”
“The decline was additionally due to a raft of constituents going ex-dividend, including such heavyweights as HSBC and Imperial Brands (LON:IMB).”
“In early exchanges, ex-dividend stocks peppered the top of the loser board, while the oil majors and the housebuilders made a brave attempt to advance following share price pressure over recent days.”
AO World surged 13.60% after the online electrical retailer said EBITDA for the full year would be above current market expectations.
Analysts at Shore Capital said the guidance for EBITDA of between £20mln to £30mln was better than current expectations of £17.7mln.
AO World posted a 52% increase in group revenue to £1,557mln in the 12 months to March 31st but slipped into the red with an operating loss of £32mln against £30mln against full year 2021.
It reduced estimates for the closure of its German business to £5mln from £15mln and said trading through the first quarter of full year 2023 has remained broadly in-line with expectations.
8.20am: Ex-divs weigh on FTSE
FTSE 100 opened lower this morning with ex-dividend stocks weighing on the leading index and as investors digested the latest minutes from the US Federal Reserve.
At 8.20am the blue chip index was down 16.35 points at 7,499.40 with the broader FTSE 250 broadly unchanged.
Victoria Scholar, head of investment, interactive investor said, “Negative momentum from a down day on US and Asian markets has carried forward to the European session with markets opening in the red. The FTSE 100 is underperforming, trading below resistance at 7,500 while the DAX and the FTSE MIB are eking out modest gains.”
“US markets closed lower after the Fed’s meeting minutes for July showed that policymakers saw little evidence that inflationary pressures are softening stateside.”
“The FOMC appears to be committed to its rate hiking path with the potential for a 50 or 75 basis point rate hike in September followed by a possible slowdown in the pace of rate increases in the following months.”
Shares in casino operator, Rank PLC, slumped 7.2% in early trading, as analysts highlighted that recent increases in energy prices would prompt cuts to earnings forecasts.
Greg Johnson at Shore Capital said the results were in line with revised guidance but added “the recent hike in energy prices, with spot prices implying around £46m in full year 2023 versus 2022 will likely see us revise our full year 2023 operating profit estimate £75mln to around £50mln to £55mln.”
Marshalls reported revenue growth of 17% to £348.4mln in the six months to June reflecting two months contribution from Marley or growth of 7% on a like for like basis, while profit before tax on a statutory basis was £23.9mln (2021: £38.9mln) reflecting the impact of adjusting items of £20.7mln.
Martyn Coffey, Chief Executive, said: “The board's expectations for the group as a whole remain in line with market expectations for the full year, with the more positive backdrop within Marshalls Building Products and Marley expected to balance the continuation of tougher trading conditions in Marshalls Landscape Products, which has greater exposure to the discretionary element of private housing RM.”
Analysts at Peel Hunt said “Marshalls has delivered another good first-half performance” adding “the business continues to see robust levels of demand in its key end markets of new build residential and commercial/infrastructure, and input cost inflation is still being offset by strong pricing.”
Made.com fell 10% after it said it is considering all options to allow it to strengthen its balance sheet.
Responding to recent press speculation, Made.com said: "As indicated in the quarter two trading update, MADE is considering all options to allow it to strengthen its balance sheet.”
"MADE confirms that these options include a potential equity capital raise. MADE continues to consider its options and a further announcement will be made if and when appropriate."
7.30am: Subdued start seen in London
The FTSE 100 is set to open slightly higher today after US stocks closed off their worst levels for the day on Wednesday following publication of the minutes from the latest Federal Reserve meeting, although ex dividend stocks in London are likely to limit any gains.
Spread betting companies are calling the lead index up by around 8 points.
Ex-dividends are set to reduce the FTSE 100 by 19.21 points including Pershing Square (NYSE:SQ), Imperial Brands, GSK, Anglo American (LON:AAL), HSBC Holdings (LON:HSBA), Hikma Pharmaceuticals (LON:HIK), London Stock Exchange, abrdn, Legal & General, Aviva (LON:AV), Prudential (LON:PRU), Berkeley Group , M&G, and Entain (LON:ENT).
Michael Hewson chief market analyst at CMC Markets UK: said “Last night’s Fed minutes showed that officials on the FOMC were concerned that there was a risk they might overtighten in their attempts to convince markets they were serious about keeping a lid on inflation.”
“That said there was a general consensus that rates might need to stay restrictive for some time to keep prices in check given a lack of confidence that inflation was likely to improve in the short term.”
“The key takeaway from these minutes would appear to show that there is little inclination on the part of anyone on the FOMC to even look at the possibility of rate cuts, and chime with more recent comments from Fed officials which suggest that we could see at least another 1.5% in rate rises by year end, which would push the Fed Funds rate at 3.75-4% by year end.”
In London, a number of results were released this morning.
Rank Group PLC (LSE:LON:RNK) reported underlying operating profit for the full year of £40.4mln, in line with guidance of £40mln provided in June 2022, with the second half adversely impacted by difficult trading conditions in Grosvenor venues, particularly in London.
John O'Reilly (NASDAQ:ORLY), chief executive said: "Whilst we have been seeing improvements in London in recent weeks, the trading environment across the UK is likely to remain difficult in the months ahead with inflationary pressures squeezing consumer discretionary expenditure and cost increases, particularly in energy prices, putting pressure on profit margins.”
Online electrical retailer, AO World PLC (LSE:AO.), posted a 52% increase in group revenue to £1,557mln in the 12 months to June 30th but slipped into the red with an operating loss of £32mln against a £30mln operating profit against full year 2021.
It reduced estimates for the closure of its German business to £5mln from £15mln and said trading through the first quarter of full year 2023 has remained broadly in-line with the Board's expectations with revenues in the approximate range of £1bn to £1.25bn and group adjusted EBITDA for the full year in the range of £20mln to £30mln.
6.55am: FTSE 100 seen firmer
The FTSE 100 is seen opening slightly higher on Thursday as US stocks came off their lows by the end of the session yesterday.
Spread betting companies are calling the lead index up by around 10 points.
The Dow closed Wednesday down 172 points, 0.5%, at 33,980, the Nasdaq Composite slid 164 points, 1.3%, to 12,938 and the S&P 500 dropped 31 points, 0.7%, to 4,274. For the Dow, the losing session snapped a five-day winning streak.
Investors reacted to the minutes from the latest Federal Reserve meeting, as the benchmarks spiked briefly after they were released at 2 pm. The Fed stated that it would likely continue to raise interest rates in order to combat inflationary pressures.
“No surprise to see the market take a breather from the summer rally it’s been riding,” said Chris Larkin, managing director of trading at E-Trade Financial, according to CNBC.”
In London results are due from Rank, Marshalls and AO World.
Ex-dividends to reduce the FTSE 100 by 19.21 points: Pershing Square, Imperial Brands, GSK, Anglo American, HSBC Holdings, Hikma Pharmaceuticals, London Stock Exchange, abrdn, Legal & General, Aviva, Prudential, Berkeley Group , M&G, Entain.
Curtis Banks Group PLC (AIM:CBP)