London open: Stocks in the red as power firms slide

London stocks fell in early trade on Tuesday, with sentiment dented by disappointing results from Snap across the pond, and power firms under the cosh.

At 0840 BST, the FTSE 100 was down 0.9% at 7,447.04.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Investors are getting set for another twist on the rollercoaster with Monday’s gains set to be largely erased after Snap interrupted the brief rally with a very downbeat snapshot.

"The FTSE 100 and FTSE 250 have opened 0.9% lower while in Japan the Nikkei slid by 1% and the Hang Seng in Hong Kong dropped by 2%.

"The owner of Snapchat notched up fresh worries after the bell on Wall Street by lowering its revenue and profits forecasts for June and blaming the rapidly weakening economic environment. That sent the stock into a tailspin, falling more than 30% in after-hours trading, pulling down other battered tech stocks with it, with Meta falling 7% and Pinterest by 11%."

On home shores, data from the Office for National Statistics showed that government borrowing fell more than expected in April but remained above pre-Covid levels.

Government borrowing fell by £5.6bn from the previous year to £18.6bn, coming in below analysts’ forecasts of £18.8bn and the Office for Budget Responsibility’s forecast of £19.1bn. Nevertheless, it remained above pre-Covid levels - up by £7.9bn compared to April 2019 - and was the fourth-highest April borrowing since monthly records began.

The ONS cut its estimate for borrowing in 2021/2022 by £7.2bn to £144.6bn.

Paul Dales, chief UK economist at Capital Economics said: "The lower-than-expected public borrowing and the downward revisions to borrowing in 2021/22 “will only add to the pressure on the Chancellor to go big when finalising the imminent support package for households".

"We think any support will be small and targeted rather than big and widespread," he added.

In equity markets, SSE, Drax and Centrica all slid following a report that Chancellor Rishi Sunak has ordered a plan for a windfall tax on electricity generators. In addition, SSE and Drax were knocked lower by downgrades to ‘neutral’ and ‘sell’ respectively at Citi.

Elsewhere, Royal Mail was under the cosh after a downgrade to ‘sell’ at Peel Hunt.

On the upside, SSP rallied after the Upper Crust owner said it swung to an interim core profit as the travel sector rebounded from Covid restrictions but warned inflationary pressures would increase in the second half.

Convenience food manufacturer Greencore also rose after saying it swung to an interim profit as revenues grew and that it would resume the return of £50m to shareholders.

Cranswick was up as the food producer reported full-year revenues above £2bn.

Market Movers

FTSE 100 (UKX) 7,447.04 -0.88%
FTSE 250 (MCX) 19,928.78 -1.08%
techMARK (TASX) 4,394.38 -0.47%

FTSE 100 - Risers

Barclays (BARC) 160.72p 1.89%
Airtel Africa (AAF) 151.20p 1.61%
Mondi (MNDI) 1,519.50p 1.20%
B&M European Value Retail S.A. (DI) (BME) 424.90p 0.45%
Vodafone Group (VOD) 126.66p 0.44%
Sage Group (SGE) 672.00p 0.21%
Relx plc (REL) 2,305.00p 0.17%
United Utilities Group (UU.) 1,130.50p 0.09%
BAE Systems (BA.) 763.00p 0.00%
Smurfit Kappa Group (CDI) (SKG) 3,095.00p 0.00%

FTSE 100 - Fallers

SSE (SSE) 1,767.00p -7.80%
Royal Mail (RMG) 314.80p -5.18%
ITV (ITV) 71.66p -3.63%
WPP (WPP) 934.60p -3.19%
Rolls-Royce Holdings (RR.) 80.70p -2.93%
Harbour Energy (HBR) 434.70p -2.71%
Melrose Industries (MRO) 118.35p -2.59%
Flutter Entertainment (CDI) (FLTR) 9,114.00p -2.44%
Coca-Cola HBC AG (CDI) (CCH) 1,699.50p -2.24%
DCC (CDI) (DCC) 5,686.00p -2.24%

FTSE 250 - Risers

SSP Group (SSPG) 250.10p 6.11%
Cranswick (CWK) 3,258.00p 3.17%
Hill & Smith Holdings (HILS) 1,400.00p 2.94%
Moonpig Group (MOON) 268.80p 2.91%
Greencore Group (CDI) (GNC) 109.70p 2.24%
Big Yellow Group (BYG) 1,314.00p 2.18%
Shaftesbury (SHB) 589.00p 1.64%
Trustpilot Group (TRST) 110.00p 1.57%
Bytes Technology Group (BYIT) 445.80p 1.41%
Rank Group (RNK) 104.60p 1.36%

FTSE 250 - Fallers

Drax Group (DRX) 725.00p -10.71%
Centrica (CNA) 81.90p -8.59%
Kainos Group (KNOS) 1,153.00p -6.34%
Greencoat UK Wind (UKW) 149.70p -5.91%
Aston Martin Lagonda Global Holdings (AML) 638.80p -5.05%
Wizz Air Holdings (WIZZ) 3,013.00p -4.11%
Baltic Classifieds Group (BCG) 126.40p -3.95%
Network International Holdings (NETW) 214.00p -3.95%
Currys (CURY) 77.15p -3.80%
The Renewables Infrastructure Group Limited (TRIG) 130.00p -3.70%