10th May 2022 08:48
(Alliance News) - The FTSE 100 was marching higher on Tuesday morning with a broad-based rally leaving only a handful of stocks in the red.
Victoria Scholar, head of Investment at interactive investor, said: "European markets are attempting to regain some ground after Monday's drop, with technology, which was hit hardest yesterday, leading the gains. The DAX and the CAC are up by more than 1% while the FTSE 100 is staging more tempered gains, heading up towards 7,300 as the key intraday resistance level to watch."
The FTSE 100 index was up 55.30 points, or 0.8%, at 7,270.54 early Tuesday. The mid-cap FTSE 250 index was up 167.46 points, or 0.9%, at 19,471.10. The AIM All-Share index was up 3.98 points, or 0.4%, at 949.99.
The Cboe UK 100 index was up 0.6% at 724.19. The Cboe 250 was up 0.6% at 17,156.35, and the Cboe Small Companies down 0.1% at 14,539.42.
In Paris, the CAC 40 stock index was up 1.0%. The DAX 40 in Frankfurt was 1.1% higher.
ii's Scholar added: "Wednesday's post-Fed bullish glow proved to be short-lived and was quickly overpowered by the forceful anxious market mood which propelled this three-day decline resulting in a USD220 billion market cap loss for Apple and for Tesla to push back below the psychological USD1 trillion valuation mark."
In New York on Monday, the Dow Jones Industrial Average closed down 2.0%, the S&P 500 down 3.2%, and the Nasdaq Composite down 4.1%. Wall Street ended deeply in the red, as investors grapple with the US Federal Reserve's shift towards higher interest rates to contain surging inflation.
"This sense of bearishness is preventing opportunistic investors from scooping up discounted stocks at cheaper prices on the expectation that there is likely to be more pain to come. However this morning it looks like there could be some relief for the markets, suggesting yesterday's sell-off was somewhat overdone," Scholar continued.
Brent oil was quoted at USD105.80 a barrel Tuesday morning in London, sliding from USD107.50 late Monday. The lower oil price left Shell and BP among the few blue-chip stocks in the red, down 0.5% and 0.3%, respectively.
Gold stood at USD1,862.50 an ounce, higher against USD1,861.75.
In London, Centrica was among the best midcap performers, up 5.5%, after the power utility kicked off 2022 promisingly and expects annual earnings at the top end of analyst expectations, despite seeing inflationary and supply chain "headwinds".
The British Gas owner forecasts its 2022 adjusted earnings per share to be around the top of a 6.7p to 10.8p range. At the very least, this would be 63% higher than the 4.1p adjusted basic earnings per share it achieved in 2021.
It has delivered a "strong operational performance" in the first four months of 2022, though the company noted it has not been all plain sailing.
In the British Gas Services & Solutions, Centrica said it has seen "some supply chain disruption and higher inflation impacting both the cost base and customer demand".
"We expect those headwinds to continue to, at least partially, offset underlying operational progress for the duration of this period of higher inflation," Centrica added.
Looking to the rest of the year, Centrica warned of "significant uncertainties". Weather, commodity prices and the possibility of bad debt charges could hit the business this year, it cautioned.
Wizz Air was up 4.3%. The Budapest-based budget airline is looking to expand its operations into Saudi Arabia.
"The kingdom has launched a strategic and ambitious vision to triple passenger traffic in the kingdom by 2030 as part of the Vision 2030 programme. This will provide unprecedented opportunities for airlines and the aviation supply chain," Wizz said.
The airline has signed a memorandum of understanding with the Ministry of Investment, supported by the Saudi National Air Connectivity Programme, which is a Ministry of Tourism initiative.
"The purpose of the MoU is to explore airline market development opportunities in the kingdom," Wizz explained.
Also among midcaps, Spectris was up 2.5% after acquiring Dytran Instruments for USD82 million.
"Dytran will be integrated into Hottinger Breel & Kjaer, which has a long-established brand in accelerometers and where it will benefit from leveraging HBK's global sales and service network. The acquisition strengthens HBK's piezo-electric offering, adds new MEMS capability and expands sales into North America," Spectris explained.
Renishaw was down 5.7%, the worst performer in the FTSE 250, despite a sharp rise in total revenue in the first nine months of its financial year, thanks to growth in all of its product lines.
For the nine months to March 31, total revenue was up 21% to GBP492.4 million from GBP407.4 million, with Manufacturing Technologies revenue up 22% to GBP467.4 million.
Renishaw expects financial 2022 revenue, ending June 30, to be between GBP655 million and GBP675 million, a rise from GBP565.6 million reported the year prior.
Pretax profit was up 13% in the nine-month period to GBP120.2 million. Adjusted pretax profit was GBP124.0 million, up from GBP84.4 million the year prior. For financial 2022, adjusted profit is expected to be between GBP155 million and GBP170 million, up from the GBP119.7 million seen the year before.
Renishaw said it continues to see "strong demand" for its product lines and has a "strong" order book.
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 0.6%. The Shanghai Composite advanced 1.1%. The Hang Seng index was down 2.0% in late trade as the Hong Kong market returned from a long weekend. The S&P/ASX 200 in Sydney ended down 1.0%.
The pound was quoted at USD1.2336 early Tuesday, higher than USD1.2320 at the London equities close Monday.
The euro was priced at USD1.0565, higher from USD1.0535. Against the yen, the dollar was trading at JPY130.36, soft from JPY130.45 from the evening before in London.
The economic events calendar on Tuesday has the Germany ZEW indicator of economic sentiment at 1000 BST.
By Paul McGowan; [email protected]
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