Leading UK shares are defying downbeat expectations while US markets also look set to rebound a little after the Fed signalled a faster pace of rate rises on Wednesday saw US markets fall sharply. The benchmark FTSE 100 is around 0.5% in positive territory at 12.30pm on Thursday at 7506.15, but mid-caps are having a tougher time of it.
The FTSE 250 is 0.6% lower at 21,745.19, dragged down by an 11% fall in Dr Martens (DOCS) after its latest update.
Fed chairman Jerome Powell said the central bank could continue to lift rates faster than it did during the past decade. US stocks, having earlier looked set to resume Wednesday’s late sell-off at the open today, are now pointing to a mild recovery.
Futures for the Dow Jones Industrial Average are pointing to a rough 0.2% rise at the opening bell at 2.30pm UK time. Futures for the S&P 500 and Nasdaq Composite are also indicating higher, with contracts showing a 0.45% and 0.7% bounce respectively, a reassuring sign for under the cosh technology investors in the wake of Microsoft’s forecast-beating last quarter.
DR MARTENS STOMPED ON
Investors put the boot into Dr Martens, the iconic British brand, lost 11% to 286.8p as 11% sales growth to £307 million for the third quarter, including Christmas, disappointed investors.
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.
drinks giant Diageo (DGE) edged 0.3% higher to £36.545 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) remained virtually flat at £34.18 after reporting flat production for the fourth quarter, though diamond output was highlight of the quarter amid ‘strong’ consumer demand.
EasyJet (EZJ) reversed earlier modest losses to nudge 0.3% up at 637.2p 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’.
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.