London open: FTSE falls amid rate hike concerns

London stocks fell in early trade on Thursday amid another deluge of earnings, as investors continued to digest hawkish guidance from US Federal Reserve chair Jerome Powell on rate hikes.

At 0830 GMT, the FTSE 100 was down 0.4% at 7,896.55.

Victoria Scholar, head of investment at Interactive Investor, said: "European markets have opened lower with US futures pointing to a softer open as markets digest a slew of corporate news and the testimony from Fed Chair Jay Powell.

"The FTSE 100 is leading the declines across Europe with miners like Rio Tinto languishing near the bottom of the basket following a drop in the Shanghai Composite and the Hang Seng overnight."

Investors were mulling the latest data from the National Bureau of Statistics in China, which showed that consumer price inflation eased more than expected in February.

CPI rose 1% on the year following a 2.1% increase in January, and versus expectations of 1.9%. It marked the slowest rate since February 2022.

The NBS put the slowdown down to cooling demand after the Lunar New Year holiday and ample food supply conditions thanks to warm weather.

Meanwhile, producer price inflation fell 1.4% on the year, having declined by 0.8% in January. Analysts had been expecting a 1.3% drop.

On home shores, the latest survey from the Royal Institution of Chartered Surveyors showed that the housing market is still falling but there are indications that pessimism is easing.

RICS said a return of optimism, and lower-than-expected interest rates, had boosted short-term hopes after a weak start to 2023.

Its monthly survey showed a net balance of -29% last month, up from -45% in January. This was the smallest decline since July although still the 10th consecutive negative reading.

The reading measures the proportion of surveyors who reported a rise in new buyer inquiries from those saying they fell.

New sales readings also improved in February, to -26% from a net balance of -36%. However, the average time taken to complete a transaction continues to rise and is now approaching 19 weeks.

In equity markets, Spirax-Sarco Engineering slumped despite reporting a rise in full-year adjusted pre-tax profit, with higher revenues driven by volume growth and price increases to protect margins.

M&G lost ground after it posted a 27% drop in its full-year adjusted operating profits to reach £529m, together with a similar-sized decline in its operating capital generation to £821m.

Hammerson slid as the property developer said it had narrowed annual losses and that it was looking to cut costs further amid the tougher economic outlook.

Endeavour Mining and Network International also fell after full-year results.

DS Smith was on the back foot after it said third-quarter trading was in line with management expectations, while National Express was knocked lower by a downgrade to ‘sell’ from ‘hold’ at Liberum.

Recruiter PageGroup retreated despite hailing a record year, reporting a rise in profit and revenue and lifting its dividend.

On the upside, Aviva rallied after it posted a better-than-expected 35% rise in annual operating profit and announced a £300m share buyback, driven by a rise in life and general policy sales.

Profits for 2022 came in at £2.2bn against a company-compiled consensus of £1.75bn and a total dividend of 31p a share was declared, in line with expectations. Aviva upgraded dividend guidance to low-to-mid single digit growth.

Informa gained as it announced the acquisition of B2B events group Tarsus for $940m, alongside its full-year results.

Convatec and Volution were also trading up after results.

Market Movers

FTSE 100 (UKX) 7,896.55 -0.42%
FTSE 250 (MCX) 19,735.08 -0.59%
techMARK (TASX) 4,647.73 -0.18%

FTSE 100 - Risers

Aviva (AV.) 463.40p 2.95%
Informa (INF) 693.40p 2.06%
Convatec Group (CTEC) 228.00p 1.60%
BAE Systems (BA.) 924.80p 1.05%
Pearson (PSON) 867.20p 0.49%
British American Tobacco (BATS) 3,168.00p 0.40%
Sainsbury (J) (SBRY) 264.80p 0.38%
Persimmon (PSN) 1,283.00p 0.35%
Flutter Entertainment (CDI) (FLTR) 14,120.00p 0.32%
Admiral Group (ADM) 2,009.00p 0.30%

FTSE 100 - Fallers

Spirax-Sarco Engineering (SPX) 11,320.00p -4.63%
M&G (MNG) 208.00p -3.88%
Rio Tinto (RIO) 5,737.00p -3.74%
Endeavour Mining (EDV) 1,647.00p -2.60%
Smith (DS) (SMDS) 335.00p -2.36%
Beazley (BEZ) 610.00p -1.85%
Barclays (BARC) 166.40p -1.47%
Antofagasta (ANTO) 1,605.00p -1.26%
Anglo American (AAL) 2,848.50p -1.11%
JD Sports Fashion (JD.) 177.75p -0.95%

FTSE 250 - Risers

Close Brothers Group (CBG) 1,060.00p 6.11%
Volution Group (FAN) 365.00p 2.82%
Watches of Switzerland Group (WOSG) 821.00p 1.92%
Redrow (RDW) 498.00p 1.88%
Essentra (ESNT) 224.50p 1.58%
Dunelm Group (DNLM) 1,276.00p 1.03%
Cranswick (CWK) 3,100.00p 0.91%
Syncona Limited NPV (SYNC) 155.40p 0.91%
Darktrace (DARK) 264.00p 0.80%
Quilter (QLT) 92.72p 0.72%

FTSE 250 - Fallers

National Express Group (NEX) 134.00p -6.03%
Network International Holdings (NETW) 261.00p -4.26%
BlackRock World Mining Trust (BRWM) 688.00p -3.78%
Trainline (TRN) 250.30p -3.25%
Pacific Horizon Inv Trust (PHI) 629.00p -3.23%
Pagegroup (PAGE) 459.00p -3.21%
Molten Ventures (GROW) 355.00p -3.06%
Warehouse Reit (WHR) 103.60p -3.00%
Aston Martin Lagonda Global Holdings (AML) 277.20p -2.74%
Tullow Oil (TLW) 30.64p -2.73%