London open: Stocks fall after disappointing US tech results; NatWest tumbles

London stocks fell in early trade on Friday following underwhelming results overnight from Apple and Amazon, and as NatWest tumbled after its third-quarter numbers.

At 0830 BST, the FTSE 100 was down 0.7% at 7,025.37.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "Disappointing results from Amazon and Apple have piled further pressure on the tech-laden Nasdaq composite, which shed 178 points in the last trading session. The wider concerns from last night’s results point to a weakening economy, which although we’ve been warned about, still have the ability to spook the market when we see the tangible effects.

"The world’s largest retailer took investors by surprise last night with an utterly bleak outlook for sales, while profits could do a disappearing act because of fierce competition and soaring inflation. Over at Apple, while there was an overall beat on sales, iPhone revenue didn’t live up to expectations, in another sign that the consumer base is now seriously compromised. That said, a revenue beat is still a beat, and keeping customers flocking to Apple’s products at the rate they are is pretty impressive."

On home shores, NatWest slid after it reported flat third-quarter profit of £1.1bn amid a deteriorating outlook. This fell short of expectations of £1.2bn.

Richard Hunter, head of markets at Interactive Investor, said: "NatWest has rounded off the banks’ reporting season in mixed fashion, with some enforced financial writedowns blotting the overall copybook.

"The planned withdrawal from the Republic of Ireland through its Ulster Bank subsidiary has led to a charge on the mortgage book of some €420m. In addition, NatWest has succumbed to the necessity of making bad debt provisions in line with most of its peers. Whereas the group bucked the trend in the second quarter by releasing £18m of provisions, for this quarter a charge of £242m has been made.

"This leaves the cumulative figure for this year as a provision of £193m, which compares to a release of £904m in the corresponding period last year, and the £1bn swing has affected overall numbers."

British Airways owner IAG was also in the red despite saying it swung to a third-quarter profit as airline travel continued to recover from the Covid pandemic.

Elsewhere, Computacenter lost ground after it said 2022 was set to be a year of "modest" growth in adjusted pre-tax profit following two "exceptional" years.

On the upside, Airtel Africa was the top gainer on the FTSE 100, having suffered heavy losses on Thursday after its half-year pre-tax profit missed analysts’ expectations.

Market Movers

FTSE 100 (UKX) 7,025.37 -0.68%
FTSE 250 (MCX) 17,908.78 -0.96%
techMARK (TASX) 4,222.64 -0.11%

FTSE 100 - Risers

Airtel Africa (AAF) 111.20p 3.15%
Reckitt Benckiser Group (RKT) 5,678.00p 1.54%
GSK (GSK) 1,398.00p 0.79%
Vodafone Group (VOD) 99.25p 0.59%
National Grid (NG.) 945.60p 0.57%
British American Tobacco (BATS) 3,426.50p 0.37%
Centrica (CNA) 69.86p 0.34%
AstraZeneca (AZN) 9,980.00p 0.29%
Unilever (ULVR) 3,875.50p 0.27%
F&C Investment Trust (FCIT) 888.00p 0.23%

FTSE 100 - Fallers

NATWEST GROUP (NWG) 231.60p -6.50%
Prudential (PRU) 785.80p -3.82%
Antofagasta (ANTO) 1,179.50p -3.20%
Ocado Group (OCDO) 480.70p -2.93%
Anglo American (AAL) 2,638.00p -2.87%
Rio Tinto (RIO) 4,532.00p -2.83%
M&G (MNG) 175.20p -2.59%
Standard Chartered (STAN) 522.00p -2.58%
Glencore (GLEN) 488.15p -2.56%
Hargreaves Lansdown (HL.) 748.80p -2.45%

FTSE 250 - Risers

Energean (ENOG) 1,449.00p 2.84%
Renishaw (RSW) 3,670.00p 2.23%
FirstGroup (FGP) 106.00p 0.66%
Capricorn Energy (CNE) 249.80p 0.64%
Hill & Smith Holdings (HILS) 1,038.00p 0.58%
Indivior (INDV) 1,597.00p 0.57%
Oxford Instruments (OXIG) 2,030.00p 0.50%
Petershill Partners (PHLL) 200.00p 0.40%
Drax Group (DRX) 497.20p 0.28%
Biffa (BIFF) 414.00p 0.24%

FTSE 250 - Fallers

ASOS (ASC) 611.50p -5.34%
Morgan Sindall Group (MGNS) 1,488.00p -4.74%
Urban Logistics Reit (SHED) 133.00p -4.66%
Bridgepoint Group (Reg S) (BPT) 210.40p -4.45%
IP Group (IPO) 58.05p -3.73%
Computacenter (CCC) 1,838.00p -3.67%
Future (FUTR) 1,195.00p -3.47%
Warehouse Reit (WHR) 118.20p -3.43%
OSB Group (OSB) 402.00p -3.27%
Workspace Group (WKP) 413.40p -3.23%