Market report

London warms to hawkish Fed | DIY drives Kingfisher


5pm: London warms to Powell tone

The FTSE 100 closed 34.33 points higher at 7,476.72 as the market warmed to hawkish comments on inflation from Federal Reserve chairman Jerome Powell.

Danni Hewson, AJ Bell financial analyst, said: “London’s financial sector certainly liked Jerome Powell’s more hawkish tone.

“The Fed Chair’s promise that if a more aggressive stance was needed to combat US inflation, he and his cohorts wouldn’t shirk from it has been given a welcome respite to what was beginning to feel a lot like an economic version of “Groundhog Day”.

“Banks are up and big oil and many of the miners that have been enjoying the surge in commodity price of late are down.”

Financials topped the index, with Prudential gaining 4.1%, Lloyds advancing 3.3% and NatWest rising 3.1%.

Tomorrow sees UK inflation figures published before the Chancellor’s Spring Statement.

9.30am: Banks higher on Fed comments

UK bank shares were higher after comments from the US Federal Reserve Jerome Powell last night which suggested there would be little let up in the pace of interest rate rises – a positive signal for the sector’s profitability (see below).

B&Q-owner Kingfisher was modestly higher on a very strong set of full-year results (see below).

Russ Mould, investment director at AJ Bell says: “Kingfisher benefited from people looking to do up their homes during the pandemic, however the world has since moved on and, despite management reporting a strong start to the current year, there has to be a risk that the company’s moment in the sun has passed.”

The FTSE 100 was up 36.6 points at 7,479.00.

7am: Kingfisher profits surge

B&Q and Screwfix owner Kingfisher reported a 20.9% rise in annual profit in the year to the end of January, reflecting a surge in DIY activity during the pandemic and said it had made an encouraging start to its new year.

The group posted adjusted profit before tax of £949 million in line with analysts’ forecasts, up from £786m in the corresponding period.

The company is proposing a 50.3% rise in the total dividend to 12.4p from 8.25p.

7am: THG chair

Former ITV chief executive Charles Allen has been appointed non-executive chair at ecommerce company THG, formerly the Hut Group.

Mr Allen’s appointment follows an international search initiated in October 2021 when THG committed to splitting the dual roles of executive chair and chief executive held by its founder Matthew Moulding, who will continue as chief executive.

Mr Allen has a clear mandate to refresh THG’s board and further strengthen governance and diversity.

7am: Capita chair

Capita has announced that Sir Ian Powell will not to seek re-election as chairman at the company’s annual general meeting on 10 May and will be succeeded by David Lowden, the senior independent director.

7am: Staffline

Staffline, the recruitment and training group, said underlying operating profit came in ahead of market expectations for 2021 increasing 114.6% to £10.3m (2020: £4.8m) with underlying EBITDA surpassing £16m.

The group has today announced a major contract win with BMW and a material extension with Vinci an existing customer, demonstrating Staffline’s scale, reach and its capacity for increasing market share.

Brightwork, the division’s Scottish brand, renewed its top three customer accounts on new long-term mandates during the year. Omega, the technical engineering permanent and contract recruitment business, and Datum, the RPO business, both demonstrated significant recovery and year-on-year growth.

7am: YouGov up

YouGov, the international research and data analytics group, posted a 12% rise in adjusted profit before tax to £15.4m for the year to the end of January (HY21: £13.6m).

It said the second half has started positively, with sales momentum continuing to build for its data products and research services, with existing and new clients resulting in increased visibility in the business.

Global markets – Fed warning on rates

Fresh warnings from Federal Reserve chairman Jerome Powell that it would not hold back from raising interest rates more steeply if required caused the Dow Jones to fall 0.6%, the Nasdaq to slide 0.4% and S&P 500 to close flat.

Asian stocks were mostly higher. Japan’s Nikkei 225 lifted 1.48%, Hong Kong’s Hang Seng index jumped 1.89% and South Korea’s Kospi gained 0.97%, though the Shanghai Composite in China dipped 0.01%.

Oil prices extended gains early today as some European Union members discussed a potential oil embargo on Russia and attacks on Saudi facilities caused more fraying of nerves across the market.

West Texas Intermediate futures were up $2.20, or 1.96%, to $114.32 a barrel on NYMEX and Brent futures were up $3.18, or 2.75%, to $118.80 a barrel on the Intercontinental Exchange at 0440 GMT.

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