London stocks opened Thursday’s session a touch lower following hawkish minutes from the US Federal Reserve, signalling some hefty 50 basis point interest rate hikes are on their way.

The minutes, released late Wednesday, showed several US Federal Reserve officials supported raising interest rates by half a percentage point in the future to combat inflation. Officials also discussed lowering their bond holdings by a total of $95 million per month as soon as the upcoming May 3-4 meeting, according to the minutes.

‘Yesterday’s Fed minutes showed the gloves are off. The FOMC was close to a 50bp hike last month, only the war stopped them, but it won’t stop them ahead,’ said Rabobank.

The FTSE 100 index was down 4.78 points, or 0.1%, at 7,582.92 early Thursday. The mid-cap FTSE 250 index was down 25.33 points, or 0.1%, at 21,075.40. The AIM All-Share index was flat at 1,048.58.

The Cboe UK 100 index was down 0.2% at 753.74. The Cboe 250 was down 0.2% at 18,517.29, and the Cboe Small Companies down 0.1% at 15,434.21.

In mainland Europe, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.5%.

In the FTSE 100, Aviva and abrdn were the biggest fallers, down 3.7% and 3.3% respectively, after the stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.

Entain was down 1.7%. The gambling firm said it made a strong start to the year with a good performance across all areas of the business, and is confident in its financial performance for the year ahead.

For the three months to March 31, net gaming revenue was up 31% compared to the first quarter last year, supported by the easing of Covid-19 restrictions. Retail arm volumes were within 5% to 10% of pre-Covid levels. However, first-quarter online net gaming revenue was down 8% on an annual basis, though it said this was in line with expectations.

Shell was down 1.5% after the oil major said it will book an impairment of between $4 billion and $5 billion in the first quarter of 2022 after exiting its operations in Russia.

‘These charges are expected to be identified and therefore will not impact adjusted earnings. Details of the accounting treatment and impact of ongoing developments will be provided at the first quarter 2022 results announcement,’ the energy major said.

The firm last month said it would withdraw from involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and liquefied natural gas, following Russia’s attack on Ukraine.

In addition, Shell said operating cash flow is expected to be hurt by ‘very significant’ working capital outflows, as price increases impacting inventory have led to a cash outflow of around $7 billion.

Rival oil major BP was down 1.2% in a negative read-across.

In the FTSE 250, 888 Holdings was the standout performer, up 29%, after the gambling firm unveiled plans for a bookbuild to help fund its acquisition of some William Hill assets.

The Gibraltar-based firm said the enterprise value of the William Hill assets has been cut to between £2.0 billion and £2.1 billion from £2.2 billion previously.

888 intends to conduct a placing of up to 70.8 million new shares, representing around 19% of its issued share capital. The placing will be conducted through an accelerated bookbuild process which will be launched immediately. The price at which the shares are to be placed will be determined following the close of the process, it explained.

888 added that the bookbuild plan replaces previous expectations of a £500 million fundraise.

At the other end of the mid-caps, Countryside Partnerships was the worst performer, down 15%, after the housebuilder warned on operating profit.

Countryside said it has suffered from ‘execution-related’ issues, including operational challenges in the north and highlighted it has failed to realise the benefits of its Westleigh acquisition completed in 2018.

In addition, Countryside said expansion into new regions has been ‘too ambitious’ and action has been taken to consolidate regional resources, reduce costs and create a strong platform for growth.

For the six months to March 31, it expects adjusted operating profit of £45.6 million, down from £78.6 million the year before.

Looking ahead, Countryside expects to generate annual adjusted operating profit of £150 million, down from £167 million in financial 2021.

In Asia on Thursday, the Japanese Nikkei 225 index closed down 1.7%. In China, the Shanghai Composite closed down 1.4%, while the Hang Seng index in Hong Kong was down 1.0%. The S&P/ASX 200 ended down 0.6%.

The pound was quoted at $1.3104 early Thursday, up from $1.3073 at the London equities close Wednesday.

The euro was priced at $1.0912, higher against $1.0906. Against the yen, the dollar was trading at JP¥123.87 in London, up from JP¥123.77.

Brent was quoted at $102.88 a barrel Thursday morning, down from $104.01 Wednesday evening. Gold stood at $1,924.70 an ounce, lower against $1,927.10.

In the international economics events calendar on Thursday, there are eurozone retail sales at 1000 BST and US jobless claims at 1330 BST.

Copyright 2022 Alliance News Limited. All Rights Reserved.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Issue Date: 07 Apr 2022