London open: Investors shake off overnight losses in Asia-Pacific

Helping to offset the drag from the pandemic was a slightly lower-than-expected CPI print in the UK.

"Pandemic concerns have provided markets with an excuse to book some of the last week's profits. Rich valuations, notably in the US, mean that even as corporate America rolls out the juicy earnings as expected, investors will be asking themselves, "what's next?" That is a valid point when one ponders the implications of the Biden administrations taxation plans," Oanda Senior Market Analyst for Asia Pacific, Jefrrey Halley, told clients.

"It does, however, look like noise and not a structural turn in sentiment. That will require our good friend, the US 10-year yield, to move quite a bit higher from here and for the US yield curve to steepen. I believe we have not heard the last of that story. Rather than seconding guess it, a wiser strategy is to wait for it to unfold."

As of 0847 BST, the FTSE 100 was bouncing back by 0.65% or 45.98 points to 6,905.18, alongside a gain of 0.3% or 65.75 points to 22,174.3 for the second-tier index.

In parallel, futures tracking the S&P 500 were 2.5 points higher to 4,129.0.

Japan's Nikkei-225 lost 2.03% to 28,508.55, but India's Sensex dipped just 0.51% to 47,705.8 and the Shanghai Stock Exchange's composite index was flat at 3,604.14.

According to reports, local authorities in Osaka and Tokyo were moving closer to imposing lockdowns in Japan's two largest economic centres.

Meanwhile, the latest wave of Covid-19 infections in India was being described by some as "out of control".

On home shores, the Office for National Statistics reported a year-on-year rate of increase in headline consumer prices in the UK accelerated from 0.4% in February to 0.7% for March, undershooting the consensus estimate of 0.8%.

Core CPI however did hit the consensus projection for a rise of 1.1%, which was up from 0.9% in the month before.

Commenting on Wednesdays CPI release, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, predicted that CPI would rise past the Bank of England's 2.0% target "only briefly", arguing that rate-setters shouldn't flinch and anticipating little pressure to raise rates before 2023.

Worth noting, Reuters published the contents of the US Federal Reserve chairman's written response, dated 8 April, to a US Senator.

In that missive, Jerome Powell said the Fed does "not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period."

No major economic reports are scheduled for release in the UK or US on Wednesday.

Also impacting on trading, overnight US media giant Netflix posted lower-than-expected earnings per share and revenues for its first quarter.

Critically, it also reported just 3.98m new subscriber adds (consensus: 6.0m) and guided towards just 1.0m adds for the second quarter (consensus: 4.4m) as the pandemic ebbs.

Miner BHP confident

BHP said it was ready to finish the year strongly as the miner reported record production at its Western Australia iron ore business in the first nine months. The company left annual production guidance for iron ore and petroleum unchanged but reduced guidance for metallurgical coal and energy coal, partly due to wet weather.

Hikma Pharmaceuticals has resumed the launch of its generic version of GlaxoSmithKline's ‘Advair Diskus’ in the United States, it announced on Wednesday, following Fod and Drug Administration (FDA) approval of an amendment to its Abbreviated New Drug Application in January. The FTSE 100 pharmaceuticals maker said the amendment reflected enhanced packaging controls to meet new industry standards adopted since its initial submission. It said it would immediately resume launch activities of its generic product.

Distribution specialist Bunzl reported a rise in first quarter revenue driven by demand for Covid-related products, but warned of a slight slowdown in the second half as it maintained full year guidance. The company said group revenue in the first quarter was up 5.4% at actual exchange rates, with acquisitions contributing revenue growth of 4.3%. Bunzl expected “robust” revenue growth in 2021 after excluding larger Covid-19 related orders which contributed approximately £550m last year.

Contracts-for-difference trading platform Plus500 has made its first foray into the US market after buying Cunningham Commodities and Cunningham Trading Systems for $30m. The deal, which “brings with it a scarce and valuable license” to operate US markets, will be funded from Plus500's existing cash balances, the company said on Wednesday, adding that some of the cash would be held in escrow for two years from completion for retention purposes.

Telecommunications and mobile money provider Airtel Africa announced the signing of a new $500m (£359.35m) loan facility with a group of relationship banks. The FTSE 250 company said the new committed facility consisted of a combination of a revolving credit facility and term loans, with tenor of up to four years. It said the facility would be used to partially refinance its €750m (£647.14m) euro-denominated bond due 20 May.

Market Movers

FTSE 100 (UKX) 6,904.99 0.66%
FTSE 250 (MCX) 22,175.71 0.30%
techMARK (TASX) 4,319.43 0.46%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 199.82p 3.48%
BP (BP.) 298.60p 2.35%
Hikma Pharmaceuticals (HIK) 2,428.00p 2.10%
Next (NXT) 7,956.00p 2.08%
Royal Dutch Shell 'A' (RDSA) 1,376.00p 1.91%
JD Sports Fashion (JD.) 897.80p 1.88%
Royal Dutch Shell 'B' (RDSB) 1,314.40p 1.81%
Rolls-Royce Holdings (RR.) 101.00p 1.73%
Entain (ENT) 1,653.00p 1.60%
Legal & General Group (LGEN) 273.60p 1.56%

FTSE 100 - Fallers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,600.00p -4.16%
Bunzl (BNZL) 2,430.00p -2.96%
Weir Group (WEIR) 1,906.50p -2.13%
Spirax-Sarco Engineering (SPX) 11,995.00p -1.32%
Pershing Square Holdings Ltd NPV (PSH) 2,650.00p -1.12%
Pearson (PSON) 784.00p -0.63%
DCC (CDI) (DCC) 6,352.00p -0.38%
United Utilities Group (UU.) 971.00p -0.29%
Sage Group (SGE) 639.20p -0.28%
Rentokil Initial (RTO) 515.00p -0.27%

FTSE 250 - Risers

Synthomer (SYNT) 501.00p 4.03%
Carnival (CCL) 1,591.00p 3.91%
easyJet (EZJ) 967.00p 3.47%
Crest Nicholson Holdings (CRST) 415.00p 3.13%
Restaurant Group (RTN) 124.00p 2.99%
Cineworld Group (CINE) 96.56p 2.94%
National Express Group (NEX) 307.20p 2.61%
SSP Group (SSPG) 318.80p 2.54%
FirstGroup (FGP) 85.75p 2.51%
Vectura Group (VEC) 114.00p 2.15%

FTSE 250 - Fallers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,600.00p -4.16%
Lancashire Holdings Limited (LRE) 642.00p -2.65%
Chemring Group (CHG) 272.00p -1.98%
Elementis (ELM) 132.00p -1.71%
Apax Global Alpha Limited (APAX) 194.00p -1.62%
Electrocomponents (ECM) 1,055.00p -1.31%
IntegraFin Holding (IHP) 559.00p -1.24%
Aston Martin Lagonda Global Holdings (AML) 1,872.50p -1.21%
GCP Student Living (DIGS) 175.20p -1.13%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 106.80p -1.11%