London open: Stocks fall ahead of more Fed commentary

21st May 2024 08:31

(Sharecast News) - London stocks fell in early trade on Tuesday as investors mulled the latest comments from US Federal Reserve officials and looked ahead to more speeches later in the day.

At 0900 BST, the FTSE 100 was down 0.3% at 8,400.91.

Derren Nathan, head of equity research at Hargreaves Lansdown, said the FTSE was missing out on the tech enthusiasm seen on Wall Street, where sharp gains for Nvidia pushed the Nasdaq to a record high.

"Given the absence of big tech names on the FTSE 100, it's no big surprise that the index has opened down 0.4% today back below the 8,400 mark.

"This comes as oil prices have retreated from recent gains, with Brent Crude heading back towards $83 per barrel, as two of the Fed's Vice Chairs, Philip Jefferson and Michael Barr, voiced continuing concerns over the direction of US inflation. Gold and copper prices have also retreated a little but that needs to be seen in the context of recent record highs."

Looking ahead to the rest of the day, investors were eyeing speeches from Federal Reserve officials John Williams, Thomas Barkin, Michael Barr, Raphael Bostic and Christopher Waller.

On home shores, Bank of England governor Andrew Bailey is due to give a speech at 1800 BST. Investors were also looking ahead to Wednesday's UK inflation data.

The latest data from Kantar showed that grocery price inflation has fallen for the fifteenth month in a row, to 2.4% - its lowest level since October 2021.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Typically, an inflation rate of around 3% is when we start to see marked changes in consumers' behaviour, with shoppers trading down to cheaper items when the rate goes above this line and vice versa when the rate drops.

"However, after nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost of living crisis. Own-label lines are proving resilient, for example, and they are still growing faster than brands, making up over half (52%) of total spending. Sales of premium own label ranges continue to increase too, up by 9.9% compared with a year ago."

In equity markets, Asia-focused Standard Chartered and Prudential were among the worst performers.

Pennon was under the cosh after the South West Water owner slashed its dividend by £2.4m following a record fine for illegally dumping sewage into rivers and the sea. United Utilities and Severn Trent also fell sharply.

Upper Crust and Ritazza owner SSP and Cranswick both lost ground after results, while B&Q owner Kingfisher fell after it said first-quarter like-for-like sales were down on last year on the back of weakness in France, but full-year expectations were unchanged.

On the upside, AstraZeneca rallied as it laid out plans to hit $80bn in revenue by 2030.

Big Yellow rallied after full-year results late on Monday, in which it posted robust revenue growth and increased profitability.

Market Movers

FTSE 100 (UKX) 8,400.91 -0.28%

FTSE 250 (MCX) 20,794.19 -0.38%

techMARK (TASX) 4,863.67 1.12%

FTSE 100 - Risers

Schroders (SDR) 375.60p 1.40%

Flutter Entertainment (DI) (FLTR) 16,470.00p 0.98%

AstraZeneca (AZN) 12,208.00p 0.93%

BAE Systems (BA.) 1,381.00p 0.66%

Imperial Brands (IMB) 1,949.50p 0.52%

Reckitt Benckiser Group (RKT) 4,553.00p 0.37%

Pershing Square Holdings Ltd NPV (PSH) 4,090.00p 0.34%

3i Group (III) 2,987.00p 0.34%

Intermediate Capital Group (ICG) 2,300.00p 0.26%

Convatec Group (CTEC) 255.00p 0.24%

FTSE 100 - Fallers

Standard Chartered (STAN) 771.40p -1.68%

Prudential (PRU) 793.00p -1.52%

United Utilities Group (UU.) 1,077.00p -1.51%

Severn Trent (SVT) 2,594.00p -1.48%

Smith (DS) (SMDS) 370.60p -1.44%

easyJet (EZJ) 468.60p -1.33%

JD Sports Fashion (JD.) 122.25p -1.25%

F&C Investment Trust (FCIT) 1,034.00p -1.15%

Diageo (DGE) 2,762.00p -1.15%

GSK (GSK) 1,755.00p -1.13%

FTSE 250 - Risers

Big Yellow Group (BYG) 1,242.00p 5.25%

SThree (STEM) 450.00p 4.05%

Octopus Renewables Infrastructure Trust (ORIT) 71.60p 2.73%

Tyman (TYMN) 385.00p 2.39%

HGCapital Trust (HGT) 500.00p 2.04%

Just Group (JUST) 107.80p 1.89%

Baltic Classifieds Group (BCG) 240.50p 1.69%

Genuit Group (GEN) 465.50p 1.31%

Dr. Martens (DOCS) 86.50p 1.29%

Hays (HAS) 104.60p 1.26%

FTSE 250 - Fallers

SSP Group (SSPG) 192.40p -7.85%

W.A.G Payment Solutions (WPS) 69.60p -6.70%

Pennon Group (PNN) 670.00p -6.49%

North Atlantic Smaller Companies Inv Trust (NAS) 4,080.00p -2.63%

Cranswick (CWK) 4,320.00p -2.37%

Barr (A.G.) (BAG) 578.00p -2.36%

AJ Bell (AJB) 353.50p -2.35%

Keller Group (KLR) 1,320.00p -2.22%

Diversified Energy Company (DEC) 1,101.00p -2.13%

Rathbones Group (RAT) 1,744.00p -2.13%