Market report

Rathbones FUMA up | Heathrow traffic falls | Unite positive


5pm: Retailers enjoy rare uplift

The FTSE 100 ended the session 46.12 points higher at 7,491, after the British Retail Consortium revealed that UK retail sales increased 2.1% on a yearly basis in December.  

Next climbed 4.6%, JD Sports added 2.8% and Sports Direct owner Frasers was 2.4% ahead.

Games Workshop fell 11%, the worst mid-cap performer, after reporting pretax profit for the six months that ended November 28 down 3.7% to of £88.2 million from £91.6m last time.

Scottish Mortgage Investment Trust enjoyed a resurgence as cooler heads prevailed and concerns about the fast-growth stocks it favours took a back seat.

Brent oil was quoted at $83.44 a barrel late Tuesday, up sharply from $81.26.

9.30am: Tech stocks fight back

Scottish Mortgage Investment Trust was among the UK-listed technology-related stocks trying to push ahead. Its shares jumped 3% following recent weakness caused by concerns of how rising interest rates would affect valuations for fast-growth stocks, many of which populate Scottish Mortgage’s portfolio.

“In the US, the tech-heavy Nasdaq index is down nearly 6% year to date, but yesterday’s session saw investors start to buy on the dip meaning that losses earlier in the day were eventually clawed back by the market close,” says Russ Mould, investment director at AJ Bell.

“It might be too early to call the start of a proper recovery for tech as pre-market indicative prices show minimal gains in the Nasdaq on Tuesday. Investors are likely to be waiting for US inflation figures tomorrow before committing to any big trades on the market.”

Stock market high-flyer Games Workshop has come up short after it revealed a drop in first half profit for the six months to 28 November 2021.

The FTSE 100 was trading 44 points higher at 7,489.03.

7am: Rathbones ‘in strong position’

Wealth manager Rathbones said funds under management and administration at 31 December were £68.2 billion, up 24.7% from £54.7 billion over the year, reflecting continuing net inflows, positive market movement and the acquisition of Saunderson House.

The company said it is in a strong position to continue delivery of strategic initiatives, secure the delivery of its ambitions for Saunderson House, and explore further opportunities to drive growth.

7am: Heathrow cancellations

At least 600,000 travellers cancelled flights from Heathrow last month as the Omicron coronavirus strain led to the introduction of further restrictions.

A total of 19.4 million people travelled through the airport last year, less than a quarter of the pre-pandemic level in 2019, and 12.3% down on 2020.

Chief executive John Holland-Kaye said: “There are currently travel restrictions, such as testing, on all Heathrow routes.

“The aviation industry will only fully recover when these are all lifted and there is no risk that they will be reimposed at short notice, a situation which is likely to be years away.”

7am: Unite bookings pick up

Student accommodation provider Unite said it is expecting strong student demand in the next academic year though there will be a delay in bookings from overseas studens.

The latest guidance from the Department for Education confirms that education settings will remain open for face-to-face teaching under the UK Government’s Plan B measures to combat COVID-19.

“In our properties, over 70% of checked-in students have already returned to their accommodation, which is in line with a typical year. We expect the remaining students to arrive shortly, following the start of the spring term.

“All of our properties remain open and operational and we continue to employ a range of measures in our buildings to reduce transmission of COVID-19 where possible. This includes enhanced cleaning and physical and social distancing measures, as well as offering support to those students needing to self-isolate.

“Across the group’s entire property portfolio, 60% of rooms are now sold for the next academic year (58% at the same time last year). We expect strong student demand for 2022/23 from both domestic and international students but anticipate a slightly later sales cycle for international students than in a typical year due to uncertainty relating to COVID-19.”

7am: Calnex board hires

Telecoms equipment testing firm Calnex Solutions has hired former Skyscanner chairman Margaret Rice-Jones and sector veteran Stephen Davidson as non-executive directors with immediate effect.

Full story here

Global markets

London’s blue-chip index was being called higher despite further declines on Wall Street overnight.

The Dow Jones and S&P 500 indices were down by 0.45% and 0.14% respectively, while the tech-focused Nasdaq fell to a 10-week low before bargain hunters helped the index register a 0.05% rise.

The sell-off has been triggered by a more hawkish tone from the Federal Reserve on rate rises over the past few days, with market analyst Michael Hewson noting that speculation has now grown from a couple of rate rises this year to as many as four.  

In the UK, the latest data from the British Retail Consortium and KPMG shows total retail sales in December were up 2.1% compared with a year earlier and 4.6% on 2019.

But Helen Dickinson, chief executive of the BRC, warned that the retail sector “faces significant headwinds in 2022, as consumer spending is held back by rising inflation, increasing energy bills, and April’s national insurance hike.

“It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs.”

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