European stock markets slumped in early dealings on Thursday as markets digested the US Federal Reserve’s statement last night.
Investors were unnerved after Fed chair Jay Powell signalled the US central bank could be open to more rate hikes this year than it has previously guided.
US stocks fell further after the announcement and the sell-off extended to most of Asia and Europe, although the FTSE 100 was an outlier among global markets on Thursday, with investors again eager to own its value names in sectors such as banking, tobacco and oil.
By 9.15 am, the blue chip benchmark was up a meagre 0.05% at 7,473.36 points.
In corporate news, drinks giant Diageo (DGE) improved 0.4% to £36.60 after serving up forecast-beating first half organic net sales growth of 20% as strong demand in its off-trade business and continued recovery in the on-trade bolstered results.
For the six months to December 2021, the Johnnie Walker whisky-to-Smirnoff vodka maker delivered a 22.5% jump in operating profit to £2.7 billion thanks to bumper demand for scotch, tequila and beer.
‘We have made a strong start to fiscal 22,’ insisted CEO Ivan Menezes. While Diageo expects near-term volatility to remain, ‘including potential impacts from Covid-19, global supply chain constraints and rising cost inflation’, he is ‘confident in our ability to successfully navigate these disruptions through the remainder of the year’.
Over the medium-term, Diageo continues to expect organic net sales to consistently grow ‘within a range of 5% to 7% and organic operating profit to grow sustainably within a range of 6% to 9%’.
Mining giant Anglo American (AAL) softened 0.8% to £33.84 after reporting flat production for the fourth quarter, though diamond output was highlight of the quarter amid ‘strong’ consumer demand.
EasyJet (EZJ) cheapened 1.1% to 628.6p as the low-cost carrier cautioned that the Omicron variant would continue to have a short-term impact, though the budget airline also touted a strong summer ahead with capacity returning to near pre-pandemic levels.
For the first quarter to December 2021, pre-tax losses more than halved to £213 million from £423 million as revenue increased to £805 million from £165 million, although following the easing of restrictions in the UK in January, EasyJet has seen a ‘sustained step change improvement in booking volumes’.
Growth slowed from the first half as the boot seller gave greater priority to the higher margin direct-to-consumer business over wholesale sales to third parties.
Shopping centre landlord Hammerson (HMSO) was marked 1.6% higher to 38.2p after the group upgraded its earnings outlook amid better-than-expected rental income and a strong recovery in footfall that has continued into 2022.
AROUND THE MARKET
Soft drinks group Britvic (BVIC) bubbled up 1.8% to 881p as the Robinsons-to-Tango maker reported a rise in first quarter revenue, led by ongoing growth in its At-Home channel and a recovery in the Out-of-Home channel in October and November.
‘Out-of-Home trading in December was impacted by changes in consumer behaviour and a downturn in socialising in GB and Ireland due to the Omicron Covid-19 variant,’ the company explained.
‘With the announcement last week of the easing of restrictions across the UK and Ireland, we anticipate the Out-of-Home channel will continue its recovery back towards 2019 levels.’
IG also issued a confident outlook, emphasising the ‘step change’ in its active client base since the pandemic, while also reiterating medium-term revenue growth targets.