Major UK stocks headed higher in early trade on Tuesday, defying the tech-led sell-off in New York overnight, with banks, energy, travel, and retail leading the way.
At 9am, the benchmark FTSE 100 was trading 0.6% higher at 7,048.63, with mid-caps also firmer, the FTSE 250 making 0.35% gains to 22,731.57.
Wall Street saw overnight chaos fed by the worldwide outage of Facebook’s various apps, which knocked the Nasdaq more than 2% lower. Even the Dow Jones, steadfastly old economy, felt the backdraft from Silicon Valley, dipping 1%, while the S&P 500 fell 1.3%.
OCADO/FLUTTER TOP RISERS
A surge in crude oil prices had only a marginal, positive impact on the UK’s blue-chip index, which was led by Ocado’s (OCDO) near 3% rally to £17.01 and betting and gaming firm Flutter Entertainment (FLTR), up more than 2% after appointing a new chief executive to its FanDuel US business, which is being eyed covetously by rival DraftKings.
The dollar pushed higher in early European trade Tuesday, helped by rising US Treasury yields, but traded below last week’s peak with investors waiting for Friday’s key US employment release for clues on the Federal Reserve’s thinking over bond-buying tapering.
In FX markets, GBP/USD is trading at 1.3592, EUR/GBP is trading at 0.8532.
But there are pockets of disappointment engineer Melrose Industries (MRO) topping the FTSE loser board with a near 2% decline at 167.75p. Melrose admitted that it has been hit by automotive industry-wide supply constraints, not least in microchips, that have knocked its performance there and in its Powder Metallurgy division.
Talk of uncertainty in just how long these constraints may last worried investors, although the company said it remains confident that the scale of the impact on profitability from any revenue adjustment will be limited thanks to margin drop-through progress thanks to restructuring of operations.
There was more encouraging news from high street baker Greggs (GRG), which forecast a full-year outcome ‘ahead of our previous expectations’ even though it warned of rising cost pressures.
Greggs’ two-year like-for-like sales for the third quarter were up 3.5% despite staffing and supply chain disruption. The market liked the numbers, marking the shares nearly 4% higher at £29.86.
SMALLER CAP WRAP
Furniture and flooring retailer ScS (SCS) dropped nearly 7% to 254p even as it swung to a full-year profit, with talk of supply-chain challenges, including driver shortages, and higher material and shipping costs dragging on the stock.
ScS, which also reported a lower year-to-date order intake, declared a final dividend of 7p per share, upping the full-year payout to 10p, compared to no payout year-on-year.
Industrial laser technology developer Gooch & Housego (GHH:AIM) rallied almost 3% to £13 after guiding for full-year results to be ‘slightly ahead’ of expectations amid strengthening demand in the second half of its financial year.
Industrial and medical lasers were demonstrating a sustained recovery, the company said, while telecommunications and life sciences continue to perform well.
Logistics group Wincanton (WIN) jumped nearly 8% to 357p in response to its announcement that it was on track to meet profit expectations even as it grapples with the nationwide driver shortage.
In a trading update for the six months through September, Wincanton said it had continued to deliver ‘strong’ revenue growth and agreed rate changes in response to the supply constraints.
Upmarket chocolate retailer Hotel Chocolat (HOTC:AIM) advanced 5% to 425p, having swung to a full-year profit as sales growth accelerated following a re-opening of UK stores.