London open: FTSE edges up as JD Sports rallies, Sainsbury's falls
London stocks edged higher in early trade on Wednesday, taking their cue from a positive session on Wall Street after US Fed chair Jerome Powell refrained from saying anything about rate policy in a speech in Sweden.
At 0820 GMT, the FTSE 100 was up 0.2% at 7,706.99.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, noted the fact that Powell failed to make any comments on forthcoming monetary policy.
"While that won’t have directly given the markets something to digest, there is an element of no news is good news," she said.
"Reports of global supply chain bottlenecks easing, and the reopening of China mean that ultimately, markets are baking in some renewed optimism. There is a ceiling to this good mood, though. Stock markets remain highly sensitive and have been prone to some misdirection in recent trading days."
In equity markets, JD Sports Fashion was sitting pretty at the top of the FTSE 100 after saying it expects annual profits to be at the top end of expectations after revenues grew by more than a fifth over the Christmas period.
Current market expectations for the year to January 28 are for group profit before tax and exceptional items of £933m-985m although the final figure will reflect trading through the rest of January with the post-Christmas sale period still to take place in some of the company’s most important European markets.
Insurer Direct Line tanked more than 25% after saying it no longer expects to declare a final dividend for 2022 as it took a hit from claims related to severe cold weather and increases in motor inflation.
The company noted the recent prolonged period of sub-zero temperatures across the UK. Although it is still relatively early, Direct Line expects claims associated with the cold snap to be around £90m across Home and Commercial.
This, together with the freeze event from January 2022 and subsidence related claims over the summer means that it currently expects total weather claims of around £140m for 2022, versus its previous expectations of £73m.
Cybersecurity firm Darktrace also tumbled after it lowered annual revenue forecasts as potential customers balked at trialling the company’s products amid the tougher macro-economic environment.
Sainsbury’s was in the red even as it increased full-year profits guidance after "record" Christmas trading. The supermarket chain said sales in the 16 weeks to 7 January 2023 rose by 5.2%, excluding fuel, or by 5.9% on a like-for-like basis. In the Christmas trading period - the six weeks to 7 January - sales jumped 7.1%.
Recruiter PageGroup lost ground after it downgraded its full-year profit expectations following a slowdown in the fourth quarter.
Market Movers
FTSE 100 (UKX) 7,706.99 0.16%
FTSE 250 (MCX) 19,387.72 -0.02%
techMARK (TASX) 4,487.70 0.10%
FTSE 100 - Risers
JD Sports Fashion (JD.) 145.30p 3.12%
Glencore (GLEN) 541.60p 1.40%
Anglo American (AAL) 3,540.50p 1.35%
Antofagasta (ANTO) 1,776.50p 1.25%
Endeavour Mining (EDV) 1,939.00p 1.15%
Rio Tinto (RIO) 6,142.00p 1.14%
Sage Group (SGE) 786.00p 1.08%
BT Group (BT.A) 126.45p 1.04%
Spirax-Sarco Engineering (SPX) 11,185.00p 0.99%
Flutter Entertainment (CDI) (FLTR) 12,475.00p 0.93%
FTSE 100 - Fallers
Aviva (AV.) 438.80p -4.28%
Barratt Developments (BDEV) 410.20p -3.16%
Legal & General Group (LGEN) 250.30p -3.10%
Taylor Wimpey (TW.) 103.50p -2.59%
Persimmon (PSN) 1,249.00p -2.35%
Berkeley Group Holdings (The) (BKG) 4,017.00p -1.93%
M&G (MNG) 193.05p -1.78%
Sainsbury (J) (SBRY) 241.60p -1.71%
Smith (DS) (SMDS) 341.30p -1.24%
Tesco (TSCO) 239.20p -1.20%
FTSE 250 - Risers
Currys (CURY) 61.00p 2.26%
ASOS (ASC) 588.50p 1.73%
Allianz Technology Trust (ATT) 209.50p 1.70%
Grafton Group Ut (CDI) (GFTU) 850.00p 1.49%
Marks & Spencer Group (MKS) 143.35p 1.45%
Supermarket Income Reit (SUPR) 100.50p 1.31%
Watches of Switzerland Group (WOSG) 937.00p 1.24%
Murray International Trust (MYI) 1,332.00p 1.22%
Tullow Oil (TLW) 35.62p 1.02%
Centamin (DI) (CEY) 123.60p 0.98%
FTSE 250 - Fallers
Darktrace (DARK) 270.00p -7.98%
Kainos Group (KNOS) 1,473.00p -5.82%
Pagegroup (PAGE) 418.60p -4.73%
Close Brothers Group (CBG) 1,095.00p -2.23%
Travis Perkins (TPK) 962.00p -2.12%
Vistry Group (VTY) 679.50p -1.66%
Britvic (BVIC) 758.50p -1.24%
Bellway (BWY) 1,975.00p -1.15%
Victrex plc (VCT) 1,680.00p -1.12%
Coats Group (COA) 63.00p -1.10%