London open: Compass paces the gains as investors await US inflation data

Opening Market Report
07:17, 11th May 2022

(Sharecast News) - London stocks rose in early trade on Wednesday, with caterer Compass pacing the advance after well-received results, as investors eyed the latest US inflation reading.
At 0845 BST, the FTSE 100 was up 0.5% at 7,277.08.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "The market has taken the lead from the US, where the S&P 500 and Nasdaq both produced a positive end to the day's trading sessions. This is especially welcome news given the tech-heavy Nasdaq's battering over recent months.

"Less positive notes are being heard in China, where the annual inflation rate has accelerated to 2.1%, up from 1.5% in March. This is the highest level since November and is directly related to the logistic and supply disruption amid the country's strict Covid curbs.

"More stark is the increase in producer prices, which rose 8% year-on-year. The wider repercussions of this depends on how much longer zero-Covid policies remain, and there have been signs these are going to temper."

On the macro front, investors were looking ahead to US inflation figures later in the day.

Victoria Scholar, head of investment at Interactive Investor, said the data "will be front-and-centre for markets amid concerns that rising price levels could push the world's largest economy into recession".

"Price levels accelerated to 8.5% in March, the highest since December 1981, topping expectations while US GDP unexpectedly contracted in the first quarter dropping 1.4% on an annualised basis. The inflation data will also provide some insight into whether the Fed needs to act more aggressively by accelerating its rate hiking path.

"While the data is expected to ease to 8.1%, stronger-than-expected inflation figures could put pressure on equities and lift the dollar if the market thinks a 75-basis point hike at one meeting is back on the table."

In equity markets, Compass surged to the top of the FTSE 100 after the catering group posted a jump in first-half operating profit, lifted its revenue guidance and announced the launch of a £500m share buyback as it hailed strong growth across all sectors.

Elsewhere, Ashtead was boosted by an upgrade to 'outperform' at RBC Capital Markets, while Watches of Switzerland was sitting pretty at the top of the FTSE 250 after an upgrade to 'buy' at Goldman Sachs.

TP Icap and Harbour Energy were both higher after trading updates, while holiday giant Tui edged up after saying it was confident bookings for this summer would be close to 2019 pre-Covid pandemic levels after first-half losses were more than halved.

Broadcaster ITV was a touch firmer after it reported "strong" first-quarter revenues, driven by a "robust" operational and financial performance throughout the period.

On the downside, telecommunications and mobile money services company Airtel Africa was weaker after its fourth-quarter numbers missed expectations.

Landscaping products supplier Marshalls was also down despite reporting higher revenue in the first four months of the year against strong comparators in 2021 as people took on home improvement projects during Covid pandemic lockdowns.

Market Movers

FTSE 100 (UKX) 7,277.08 0.47%
FTSE 250 (MCX) 19,478.79 0.48%
techMARK (TASX) 4,246.48 0.19%

FTSE 100 - Risers

Compass Group (CPG) 1,730.50p 9.70%
Scottish Mortgage Inv Trust (SMT) 800.60p 2.59%
Prudential (PRU) 902.80p 2.24%
Whitbread (WTB) 2,581.00p 2.06%
Burberry Group (BRBY) 1,512.00p 2.02%
International Consolidated Airlines Group SA (CDI) (IAG) 125.34p 1.89%
Ashtead Group (AHT) 3,834.00p 1.83%
InterContinental Hotels Group (IHG) 4,879.00p 1.82%
SEGRO (SGRO) 1,113.50p 1.69%
Rio Tinto (RIO) 5,250.00p 1.69%

FTSE 100 - Fallers

Rentokil Initial (RTO) 503.80p -1.37%
Airtel Africa (AAF) 138.90p -0.93%
Howden Joinery Group (HWDN) 664.00p -0.93%
Berkeley Group Holdings (The) (BKG) 3,891.00p -0.89%
Sainsbury (J) (SBRY) 231.40p -0.69%
Ocado Group (OCDO) 786.40p -0.63%
Legal & General Group (LGEN) 237.10p -0.59%
Kingfisher (KGF) 243.30p -0.57%
M&G (MNG) 205.70p -0.48%
St James's Place (STJ) 1,188.50p -0.46%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 904.50p 5.54%
CLS Holdings (CLI) 201.00p 4.47%
TP Icap Group (TCAP) 117.90p 3.69%
Harbour Energy (HBR) 475.80p 3.03%
BMO Commercial Property Trust Limited (BCPT) 113.20p 2.91%
SSP Group (SSPG) 213.50p 2.74%
Capital & Counties Properties (CAPC) 158.20p 2.66%
Pantheon International (PIN) 293.00p 2.63%
Carnival (CCL) 1,071.50p 2.58%
Sirius Real Estate Ltd. (SRE) 112.00p 2.56%

FTSE 250 - Fallers

Marshalls (MSLH) 537.00p -8.83%
Virgin Money UK (VMUK) 141.85p -4.28%
LXI Reit (LXI) 137.60p -3.23%
Coats Group (COA) 66.40p -2.64%
OSB Group (OSB) 484.60p -2.42%
Trustpilot Group (TRST) 103.20p -1.71%
Baltic Classifieds Group (BCG) 122.40p -1.45%
Renishaw (RSW) 4,002.00p -1.28%
Liontrust Asset Management (LIO) 1,018.00p -0.97%
Paragon Banking Group (PAG) 458.20p -0.91%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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