Market report

Profit alerts at pre-Covid level | Home price growth slows

London close

The FTSE 100 closed almost unchanged, just 1.93 points lower at 7,912.2 points.

Investors adopted a cautious stance ahead of a series of key earnings reports from UK blue-chip companies and US tech giants later in the week.

Profit warnings

Dr Martens

Profit warnings among UK-listed firms climbed to 75 in the first three months of this year, the highest level since the early days of the Covid-19 crisis and up from 72 a year ago, according to EY-Pantheon.

This marks five consecutive quarters of profit warnings, surpassing the 10-year quarterly average, excluding 2020.

Economic uncertainty has driven 35% of the profit warnings, as contract delays or cancellations have risen due to cautious customer spending.

Among those issuing earnings alerts in the latest quarter were Hornby, Dr Martens and Direct Line.

But tech firms dominated overall profit warnings. Just over one in five (22%) came from the sector, which has been rocked by central banks hiking interest rates. The sector has relied on rock-bottom rates to prop up its business model.

Retail had a reprieve with only five warnings in Q1 2023, down from nine in Q4 2022 and Q1 2022.

House prices

The UK housing sector is adjusting to “more normal” activity levels seen in the pre-pandemic market of 2019, Rightmove says.

The average price of a home coming to market this month rose by just 0.2% to £366,247, lower than the average increase of 1.2% for this time of year, according to data from the property platform.

It showed that many new sellers are “taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels last seen in the pre-pandemic market of 2019”.

Global markets

Asian shares were mostly lower this morning in a week packed with economic data and central bank meetings, along with earnings from the tech giants that have kept the S&P 500 afloat so far this year.

In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.4%. In Tokyo, the Nikkei 225 index was up 0.1%.

Apple and Microsoft alone have accounted for nearly half of the S&P 500’s gains through March, so there is much riding on their outlooks.

Oil prices lost ground last week, though planned production cuts from OPEC offer some support. Brent Crude eased 66 cents early today to $81 a barrel, while US crude fell 67 cents to $77.20 per barrel.

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