London close: Stocks mixed again after slew of earnings

Wed 27 Apr 2022

LONDON (SHARECAST) - (Sharecast News) - London stocks ended a turbulent Wednesday mixed, after a morning filled with earnings updates and as Wall Street opened higher across the pond.
The FTSE 100 ended the session up 0.53% at 7,425.61, while the FTSE 250 fell 0.27% to 20,437.77.

Sterling was also going in different directions, last weakening 0.41% against the dollar to $1.2522, while it strengthened 0.48% on the euro to trade at €1.1878.

"The move higher in the opening minutes of the session on Wall Street is already rapidly disappearing, with indices heading back towards flat on the day, while in Europe the morning gains are vanishing too," said IG chief market analyst Chris Beauchamp.

"Under the sustained pressure of earnings season stocks are vulnerable to further declines.

"While continental European markets and their US counterparts seem poised for a push back towards the recent March lows, rising commodity prices are helping the FTSE 100 to outperform, a continuing turnaround in fortunes for the UK's top index and one that is perhaps the most surprising development of the year so far for markets."

On the economic front, fresh industry research showed UK retail sales struggling in April, as the cost of living crisis saw consumers rein in spending.

According to the latest CBI Distributive Trades Survey, sales volumes tumbled by far more than expected, to -35 in the year to April compared to 9 a month previously.

Analysts had been looking for a balance of around -5.

Retail sales were seen as poor for the time of year, with a balance of -24 in April compared to -23 in March, while orders placed with suppliers was also down, at -7 compared to 3 in March.

Internet sales volumes continued to fall in the year to April, at -36, though at a slower pace than in March, when the balance was -46.

"Retail sales were below seasonal norms in April, as consumer spending power continued to shift back towards services and rising prices impacted households spending power," said Martin Sartorius, principal economist at the CBI.

"Rapid inflation means that the cost of the living crisis is going nowhere soon."

On the continent, Russia reportedly cut off gas supplies to Poland and Bulgaria earlier in the day, causing European energy prices to spark.

In a statement, state-controlled energy giant Gazprom, which supplies around 40% of European gas, said it suspended supplies after both nations refused to pay in roubles.

Russia first announced in March that it would require roubles payments from so-called "unfriendly countries" after financial sanctions caused the currency to slump.

A number of European buyers refused, however, arguing that it contradicted contract terms and could be used to bypass sanctions.

"Energy is being increasingly weaponised as the war in Ukraine looks set to enter the long haul and expectations grow that a crude oil embargo will end up being slapped on Russia by the European Union," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"If Russia's customers continue to refuse to sign contracts in roubles, and accelerate efforts to find other sources of energy as they pledged to do, these revenue streams risk turning into a trickle, putting fresh pressure on the rouble."

In equities, Industrial software company Aveva tumbled 15.91% after it reported a "strong" close to the financial year just ended, with organic constant currency revenue growth coming in at 18% in the fourth quarter, although it warned of lower revenue growth and margins amid rising costs.

Retail banking giant Lloyds reversed earlier gains to close down 0.25%, after reporting a fall in first-quarter pre-tax profits, as higher net income was offset by an underlying impairment charge.

The bank posted profits of 1.6bn, up from 1.8bn a year earlier, and said the underlying impairment charge of 200.0m reflected a low incurred charge and limited impact from a revised economic outlook, including higher inflation offset by stronger house prices and unemployment.

Primary Health Properties slipped 0.54% after reporting "good progress" in converting its year-end pipeline into committed deals in its first quarter.

London Stock Exchange Group closed down 1.53%, after it reported "strong" financial and operational progress in the first quarter, with total income excluding recoveries up 6.3%.

The FTSE 100 exchange operator said it saw "good growth" across all divisions, with total income rising 6.8% adjusting for the actions taken in response to Russia's invasion of Ukraine.

Communications group WPP closed 1.37% lower, after it made a "strong start to the year", with like-for-like revenue guidance being raised from 5% to between 5.5% and 6.5% amid continued investment into growth.

Persimmon slid 4.77% after saying it was currently trading in line with expectations, with demand remaining strong and private average sales rates rising 2% year-on-year.

The housebuilder, which also highlighted its "robust" forward order book of roughly 2.8bn, anticipated full-year completions would be weighted towards the second half, with first half completions being lower than those delivered in 2021.

Stationery and travel outlet chain WH Smith finished 3.74% weaker, despite swinging to a profit for the half-year as air and rail passengers returned after Covid lockdowns.

On the upside, Drax Group added 4.09% after it said that, after a strong first quarter, it expected 2022 adjusted EBITDA to be around the top end of the current range of analyst expectations.

GlaxoSmithKline advanced 2.42% after posting above-forecast numbers, boosted by strong demand for its Covid-19 drug.

The blue chip reported first-quarter turnover of 9.8bn, a 32% improvement year-on-year, while operating profits rose 65% to 2.8m.

Adjusted earnings per share were 32.8p, a 43% increase.

In broker note action, Beazley shares were up 4.66% after the stock was upgraded by UBS to 'buy' from 'sell'.

Market Movers

FTSE 100 (UKX) 7,425.61 0.53%
FTSE 250 (MCX) 20,437.77 -0.27%
techMARK (TASX) 4,286.87 -0.72%

FTSE 100 - Risers

Glencore (GLEN) 479.65p 6.74%
Anglo American (AAL) 3,497.50p 5.89%
Rio Tinto (RIO) 5,660.00p 5.64%
Antofagasta (ANTO) 1,544.50p 5.18%
Severn Trent (SVT) 3,160.00p 3.50%
GlaxoSmithKline (GSK) 1,797.00p 3.32%
Croda International (CRDA) 7,630.00p 2.89%
Fresnillo (FRES) 793.80p 2.77%
HSBC Holdings (HSBA) 486.30p 2.63%
AstraZeneca (AZN) 10,512.00p 1.74%

FTSE 100 - Fallers

Aveva Group (AVV) 1,924.00p -15.91%
Rolls-Royce Holdings (RR.) 82.38p -5.12%
Persimmon (PSN) 2,076.00p -4.77%
Hargreaves Lansdown (HL.) 940.00p -3.96%
Standard Chartered (STAN) 479.70p -3.54%
Royal Mail (RMG) 339.30p -3.53%
Barratt Developments (BDEV) 492.40p -3.46%
Electrocomponents (ECM) 1,002.00p -3.38%
Ashtead Group (AHT) 4,173.00p -3.36%
Schroders (SDR) 2,870.00p -3.30%

FTSE 250 - Risers

Tullow Oil (TLW) 55.45p 4.95%
Wood Group (John) (WG.) 213.20p 4.93%
Beazley (BEZ) 418.00p 4.66%
BlackRock World Mining Trust (BRWM) 693.00p 4.21%
Drax Group (DRX) 824.50p 4.09%
Spirent Communications (SPT) 223.60p 3.81%
National Express Group (NEX) 241.80p 3.78%
Ferrexpo (FXPO) 168.90p 3.68%
Fidelity China Special Situations (FCSS) 236.00p 3.28%
Ibstock (IBST) 183.60p 3.03%

FTSE 250 - Fallers

Discoverie Group (DSCV) 753.00p -8.05%
Baltic Classifieds Group (BCG) 131.20p -6.95%
Bytes Technology Group (BYIT) 448.00p -6.08%
Kainos Group (KNOS) 1,175.00p -6.00%
PureTech Health (PRTC) 175.00p -5.81%
Softcat (SCT) 1,397.00p -5.48%
Genus (GNS) 2,518.00p -5.34%
Trustpilot Group (TRST) 104.80p -5.24%
Hays (HAS) 117.30p -5.02%
Petershill Partners (PHLL) 252.00p -4.91%
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