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London midday: Stocks flat but airlines higher on easyJet update

Published 25/01/2023, 11:55
Updated 25/01/2023, 12:12
London midday: Stocks flat but airlines higher on easyJet update

London midday: Stocks flat but airlines higher on easyJet update

Sharecast - The FTSE 100 was flat at 7,753.25.

Russ Mould, investment director at AJ Bell, said: "It feels like UK stocks are waiting for some direction from across the Atlantic as US earnings season gets into full swing and key economic announcements loom at the end of the week.

"A gloomy prognosis on its immediate prospects from Microsoft (NASDAQ:MSFT) won’t have helped the market’s mood and neither will Johnson & Johnson’s warnings of a continued impact from inflation. It’s the turn of Tesla later; will its decision to cut prices give a boost to sales and what are the implications for earnings?

"Thursday’s fourth quarter GDP figures for the US could either reinforce or blow-up expectations for a soft landing for the American economy, with core inflation numbers on Friday helping to provide some insight into the Federal Reserve’s decision making ahead of its crunch meeting next week."

In the meantime, data released earlier by the Office for National Statistics showed that producer price inflation slowed in December as cost pressures eased.

Producer input prices rose by 16.5% in the year to December, down from 18% in the year to November and 20.2% in October. Input prices, which hit a record high of 24.6% last June, are the prices businesses pay for materials and other goods

Factory gate prices rose by 14.7%, down from 16.2% in November and 17.5% in October.

The ONS said inputs of other parts and equipment, and petroleum products, provided the largest downward contributions to input and output inflation respectively. Metals and non-metallic minerals provided the largest upwards contribution to input PPI.

However, despite December’s fall, producer price inflation remains near record highs. Before Russia invaded Ukraine, which caused energy and good prices to soar, it averaged 2.4% between 1985 and 2020.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown (LON:HRGV), said: "The falling costs of parts, equipment and fuel prices are all helping, and the overall trend is encouraging, showing inflation is heading in a downwards direction.

"But it’s clear that producers are still grappling with the high cost of doing business while attempting to keep a lid on price increases for customers."

Elsewhere, the latest retail industry research showed that footfall in the UK saw strong growth during 2022, although it remains below pre-pandemic levels.

According to retail consultancy Springboard, footfall fell 14.2% in 2022 compared to 2019. Within that, high streets saw a 16.9% decline and shopping centres a 18.8% slide. Footfall eased 3.7% in retail parks.

Compared to 2021, overall footfall sparked 42%, with a 51.2% jump on high streets, a 52% increase in shopping centres and a 11.7% improvement in retail parks. However, while 2022 was the first restriction-free year since the start of the pandemic, in 2021 the UK was in lockdown for the first four months of the year with all bar essential retail closed.

In equity markets, budget airline easyJet (LON:EZJ) flew higher after saying it expects to beat full-year profit expectations, as it narrowed losses in the first quarter and forward bookings into the summer surged. British Airways and Iberia owner IAG and Wizz Air (LON:WIZZ) also rallied.

Ascential surged after saying that full-year revenues and adjusted EBITDA were set to be ahead of market expectations, and announcing the planned separation of its digital assets.

Insurer Aviva (LON:AV) was trading higher after it maintained its dividend guidance and capital returns outlook for the year.

JD Wetherspoon was down after it reported a jump in first-half sales, although they remain below pre-pandemic levels.

In broker note action, Entain (LON:ENT) was knocked lower by a downgrade to ‘neutral’ at Exane, while Experian fell after a downgrade to ‘neutral’ at Credit Suisse (SIX:CSGN).

Dr Martens was hit by a downgrade to ‘hold’ at HSBC (LON:HSBA), while Direct Line was weaker after a downgrade to ‘hold’ at Berenberg. Darktrace (LON:DARK) was boosted by an upgrade to 'overweight' at Morgan Stanley (NYSE:MS).

Market Movers

FTSE 100 (UKX) 7,753.25 -0.05%

FTSE 250 (MCX) 19,850.41 -0.02%

techMARK (TASX) 4,432.48 -0.50%

FTSE 100 - Risers

Aviva (AV.) 455.30p 3.17%

International Consolidated Airlines Group (LON:ICAG) SA (CDI) (IAG) 169.80p 2.09%

Lloyds Banking Group (LON:LLOY) 51.00p 1.74%

Antofagasta (LON:ANTO) 1,789.00p 1.47%

GSK (GSK) 1,403.00p 1.15%

United Utilities Group (UU.) 1,070.00p 1.09%

Rio Tinto (LON:RIO) 6,344.00p 1.02%

Frasers Group (FRAS) 768.50p 0.99%

Tesco (LON:TSCO) 246.30p 0.98%

Anglo American (LON:AAL) 3,615.00p 0.98%

FTSE 100 - Fallers

Fresnillo (LON:FRES) 854.40p -2.75%

Experian (EXPN) 2,889.00p -2.46%

BT Group (LON:BT.A) 128.20p -2.17%

Ocado Group (LON:OCDO) 719.00p -1.94%

Scottish Mortgage Inv Trust (SMT) 751.00p -1.86%

Melrose Industries (LON:MRON) (MRO) 142.05p -1.83%

Croda International (CRDA) 6,898.00p -1.71%

Convatec Group (CTEC (LON:CTEC)) 239.60p -1.64%

British American Tobacco (LON:BATS) 3,050.00p -1.41%

Spirax-Sarco Engineering (SPX) 11,410.00p -1.38%

FTSE 250 - Risers

Ascential (ASCL) 253.40p 21.83%

easyJet (EZJ) 518.20p 10.73%

Baltic Classifieds Group (BCG) 160.00p 5.96%

Discoverie Group (DSCV) 828.00p 4.55%

Darktrace (DARK) 258.00p 3.78%

Tullow Oil (LON:TLW) 37.68p 3.63%

Wizz Air Holdings (WIZZ) 2,990.00p 3.46%

Apax Global Alpha Limited (APAX) 179.60p 1.93%

Hilton Food Group (HFG) 641.00p 1.91%

Syncona Limited NPV (SYNC) 171.20p 1.90%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 235.20p -4.00%

National Express Group (LON:NEX) 132.60p -3.91%

FDM Group (Holdings) (FDM) 767.00p -3.76%

Mitchells & Butlers (MAB) 165.20p -3.39%

Wetherspoon (J.D.) (JDW) 463.80p -3.17%

Hikma Pharmaceuticals (LON:HIK) 1,615.50p -3.00%

Molten Ventures (GROW) 377.80p -2.58%

Genus (LON:GNS) 2,910.00p -2.55%

CMC Markets (CMCX) 237.50p -2.46%

Dr. Martens (DOCS) 135.70p -2.37%

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