MARKET REPORT: Relief as stocks rebound in London, Europe and on Wall Street after Monday’s market bloodbath
London stocks rebounded in a much-needed rally following a bloodbath on global markets at the start of the week.
The FTSE 100 was up 0.37 per cent, or 26.64 points, at 7243.22 while the FTSE 250 climbed 0.41 per cent, or 78.24 points, to 19384.96.
European bourses followed suit with Germany’s Dax rising 1.15 per cent and France’s CAC 40 index adding 0.5 per cent.
Recovery: The FTSE 100 was up 0.8%, while the FTSE 250 climbed 0.8%. European bourses followed suit with the Dax rising 1.7% and the CAC 40 added 1.2%
However, the rally lost steam on Wall Street with the US markets seeing a more mixed performance despite early gains.
Only the S&P 500 edged up, by just 0.2 per cent, while the tech-heavy Nasdaq closed down 0.4 per cent and the Dow Jones Industrial Average fell 0.26 per cent.
Despite the mediocre showing in the US, the uptick in London provided some respite in a bleak year so far for global stock markets, which have been battered by a cocktail of worries including inflation, rising interest rates, new Covid-19 outbreaks in China and the war in Ukraine.
Defensive stocks – which are perceived to provide steady earnings and dividends whatever the weather – helped lead the charge higher in London, with tobacco firm Imperial Brands up 1.5 per cent, or 24p, to 1676.5p while BAT gained 0.1 per cent, or 4.5p, to 3306.5p.
The two groups were boosted by news that US-based rival Philip Morris, the maker of Marlboro cigarettes, was close to securing a £13billion takeover of nicotine pouch maker Swedish Match, sparking chatter of a potential bidding war.
Dividend payers rose as investors sought out better returns following the latest sell-off, with consumer goods giant Unilever adding 1.8 per cent, or 64.5p, to 3700.5p and housebuilder Barratt Developments up 2.6 per cent, or 12p, to 471.1p.
‘The narrative has gone from ‘how can I make money?’ to ‘how can I protect my money?’ said AJ Bell investment director Russ Mould.
Stock Watch – Treatt
Treatt shares tanked after the ingredients group reported a disappointing set of half-year results.
Pre-tax profits for the six months to the end of March dropped to £6.3million from £10.4million in the same period last year despite revenue rising 9 per cent to a record £66.3million.
Profit margins had been hit by the lingering effects of Covid-19, although it still expected to meet market expectations for the full year after record orders.
Shares tumbled 17 per cent, or 171p, to 833p.
‘Investors are increasingly favouring stocks with generous dividends as the trickle of cash payments is at least one form of positive return on an investment.’
Other notable blue-chip risers were engineer Melrose (up 3.8 per cent, or 4.05p, to 111.65p), industrial software group Aveva (up 1.9 per cent, or 40p, to 2117p) and packaging giant Smurfit Kappa (up 2 per cent, or 65p, to 3288p).
Among the fallers, telecoms giant Airtel Africa dropped 2.7 per cent, or 3.9p, to 140.2p while cyber-security specialist Avast lost 2 per cent, or 10.1p, to 499.3p.
Banking stocks gained amid hopes a continued rise in interest rates will boost profits.
HSBC was lifted 0.6pc, or 3p, to 495.7p, Standard Chartered rose 1.4 per cent, or 7.4p, to 554.4p and Lloyds jumped 0.6 per cent, or 0.25p, to 42.59p.
NatWest and Barclays enjoyed gains in early trading but both closed down, the former by 0.2 per cent, or 0.5p, to 203.6p and the latter by 1.6 per cent, or 2.34p, to 143.64p.
Engineering group Renishaw slipped 3.3pc, or 136p, to 4054p after it flagged rising costs as a result of surging energy prices and hiring more staff.
The news overshadowed a strong trading update which saw the firm’s profits jump 47 per cent year-on-year to £124million in the nine months to the end of March.
Budget carrier Wizz Air revealed it was pondering an expansion into Saudi Arabia after signing an agreement with the kingdom’s investment ministry.
The deal comes as the country looks to triple passenger traffic by 2030 in a bid to boost its aviation and tourism markets. Wizz Air shares, however, edged down 0.7 per cent, or 21p, to 2881p.
Iron ore miner Ferrexpo rose 2.4 per cent, or 3.3p, to 140p after it announced a final dividend despite the ongoing crisis in Ukraine.
The payment will be around 5p per share, although this was 50 per cent lower than the sum paid out the previous year.