- FTSE 100 eases 10 points
- HSBC higher as it lowers provisions for coronavirus-related bad debts
- Shock news! Tesla is world’s most searched for stock in search engine enquiries
HSBC Holdings PLC (LON:HSBA) has taken over from BP PLC (LON:BP.) at the head of the Footsie table but the index remains in the red.
The FTSE 100 was off 10 points (0.2%) at 6,953, despite heavily-weighted index constituent HSBC hardening 1.6% to 429.4p after it said the pandemic might not cause as many bad debts to pile up as it previously feared.
“The banking sector has been through the wars over the past decade or so, with the global financial crisis and PPI scandal knocking it for six. The coronavirus pandemic looked set to inflict more damage, prompting banks to put aside large amounts of money to cover any bad debts. So far it looks as if they were over-cautious,” said Russ Mould, the investment director of AJ Bell.
“HSBC is not only releasing some of these provisions, but it is also toasting good trading in various parts of its business. In the UK it is riding the surge in demand for properties, with its mortgage lending doing well in the first quarter.
“These factors will put pressure on the business to be generous with dividends, yet HSBC remains cautious while the pandemic rages on and won’t decide on when next to pay cash to shareholders until August,” he noted.
Meanwhile, if you are wondering why the name Tesla is crowbarred into every financial news headline whether the subject be Latvian gourd manufacturing, medical research into the effect of loud music on moles or, in the case of this item you are reading, a UK market report update, then new research by the website money.co.uk has revealed that 15% of stock/share search enquiries are for the electric vehicle manufacturer.
Tesla is the most popular investment in the majority of the Eastern hemisphere as well as in North America, the study reveals. Tax-dodgers extraordinaire Apple and Amazon are the second and third-most searched for stocks on search engines.
9.45am: Warm reception for BP’s share buyback
There has been no shortage of news from the FTSE 100 heavy hitters this morning and yet the index remains mired in a furrow of inactivity.
London’s index of heavyweight shares is down 4 points (0.1%) at 6,959, despite index heavyweight BP PLC (LON:BP.) climbing 1.8% to 302p after a well-received first-quarter trading statement.
— energyvoicenews (@EnergyVoiceNews) April 27, 2021
“BP profits jumped to $2.6bn, easily beating analyst expectations and well ahead of last year. Looney [the CEO] says the company is in good shape. As he puts it, these results really put to rest some of the fears investors may have had around this stock as it’s managed to reduce net debt ahead of schedule and is delivering shareholder returns. Looney seems really committed to pushing the dividend, which I suppose you can do if you are not doing any more oil and gas exploration. Still, he better keep some back for those wind turbines. BP is confident that China and the US will drive the recovery in crude demand,” said Neil Wilson at markets.com.
The latest grocery market share figures from market research group Kantar point to shoppers making more visits to supermarkets and buying less stuff online. The number of trips to the supermarket in the 12 weeks to April 18 was 4% higher than in March, while grocery sales rose by 5.7% to £31.6bn.
“With much of the over-65 community now vaccinated, older shoppers accounted for nearly half of the increased footfall,” revealed Fraser McKevitt, the head of retail and consumer insight at Kantar.
“The return to overall sales growth in the latest four-week period also reflects what was happening in April 2020, a highly unusual month for grocery shopping. After the initial pre-lockdown rush, this time last year was comparatively quiet. Shoppers chose to buy locally and limit their trips to store where possible, which is reflected by strong growth a year later. While the market may fluctuate between growth and decline in the months ahead, depending on the year-on-year comparison being made, the fact that trip numbers are up and basket sizes down suggests that habits are slowly returning to normal,” KcKevitt continued.
“The share of groceries ordered via the internet in the most recent four weeks slipped to 13.9%, down from a peak of 15.4% in February. While online is still growing strongly, at 46%, the rate is half what it was at the height of the pandemic. Convenience stores – both independents and those owned by major retailers – were also particularly popular during the first lockdowns and, against such comparisons, it is unsurprising that sales have fallen by 19% in the past month.
“Co-op, the most prominent convenience retailer, saw sales decrease annually by 3.1% over the 12 weeks, following its particularly strong performance this time in 2020. In comparison with a more normal 2019 however, sales are up a formidable 16.2%. It’s a similar story for independent stores and symbol retailers, with year-on-year decline of 13.3% masking the fact that sales are considerably higher than two years ago,” McKevitt said.
Among the listed supermarket groups, Tesco PLC (LON:TSCO) saw its market share creep up to 27.9% from 26.8% in April of last year while Morrison (Wm.) Supermarkets PLC (LON:MRW) nudged its share up to 10.0% from 9.9%. J. Sainsbury PLC (LON:SBRY) saw its share hold steady at 15.3%.
Ocado Group PLC (LON:OCDO), thought of these days as more of a technology firm than a groceries delivery outfit, saw its share improve to 1.8% from 1.5%, and while its revenue growth slowed to 27.5%, it comfortably retains its status as the fastest-growing grocer, ahead of Morrisons in second place (with annual growth of 7.2%).
Tesco’s shares were up 0.5% at 223.5p; Sainsbury’s were virtually unchanged while Morrisons’ shares were actually unchanged; Ocado’s shares were the best performers, up 1.2% to 2,221p.
Snippets from latest @Kantar_UKI grocery data: Aldi’s market share rose for the first time in a year to 8%, as people became more comfortable about visiting stores. Online accounted for 13.9% of grocery sales, down from peak of 15.4% in February – still growing strongly, at 46%.
— George MacDonald (@GeorgeMacD) April 27, 2021
8.45am: Tepid start on a busy day for blue-chip results
The FTSE 100 made another insipid start to proceedings on busy day for corporate news.
Neither Wall Street nor Asia provided much in the way of direction as traders opted to stay on the side-lines ahead of a two-day meeting of the US Federal Reserve.
The gathering place against a rapidly improving economic backdrop. This has created an element of uncertainty around the central bank’s policy, which may zero in on the nascent inflation threat, heralding an emergence from the era of ultra-low interest rates.
Back here in the UK, the recovery in the fortunes of HSBC (LON:HSBA) appears to have largely been anticipated by the market, with the shares nudging up barely a percentage point in the opening exchanges.
“HSBC will not transform its fortunes overnight, but the improving economic outlook has provided a welcome boost to its aspirations,” said Richard Hunter, head of markets at Interactive Investor.
“In particular, the release of US$400 million of impairments is a sign of optimism, especially in the UK where the situation has markedly improved from the perspective of poor performing loans.”
More warmly received by the market than HSBC’s update were the latest results from BP (LON:BP.), which were up 2.5% after a better-than-expected quarterly performance.
Copper giant Antofagasta (LON:ANTO) led the Footsie with a 3.5% gain after the price of the red metal shot to a 10-year high.
Proactive news headlines
Directa Plus PLC (LON:DCTA) said it has “hugely increased” the number of products it can potentially produce with a new printing technique for the textile market.
Inspiration Healthcare Group PLC (LON:IHC) reported that earnings more than doubled in its full-year as the company saw its revenues boosted by orders related to the coronavirus (COVID-19) pandemic.
XLMedia PLC PLC (LON:XLM) said its business performed relatively well in 2020 and it expects to see a big improvement in revenues this year.
Gaming Realms PLC (LON:GMR) said the strong momentum it enjoyed last year has continued into 2021, with the company trading marginally ahead of expectations.
Crossword Cybersecurity PLC (LON:CCS) has reported that revenues grew by a quarter during the year despite what it said was “the toughest economy in recent memory”.
Scotgold Resources Ltd (LON:SGZ) has resolved the various outstanding technical issues that had been affecting the processing plant at the Cononish gold project in Scotland, saying the plant is now operating consistently and the current focus is on ramping up to full design capacity.
TomCo Energy Plc (LON:TOM) has announced that the Petroteq Energy oil sands plant at Asphalt Ridge is now back online in Utah, after new equipment was installed.
88 Energy Ltd (LON:88E) told investors the findings of the analysis of sidewall cores, cuttings, mud gas and fluid samples from the Merlin-1 well are expected in the next two to ten weeks.
SkinBioTherapeutics PLC (LON:SBTX) said it has begun a collaboration with the University of Manchester to explore the use of bacteria, including its own breakthrough lysate, SkinBiotix, in oral care.
Empire Metals Ltd (LON:EEE) has begun the next phase of its exploration work at its Eclipse gold project, located 55km north-east of Kalgoorlie, Western Australia.
Vast Resources PLC (LON:VAST) gave an encouraging update on its Baita Plai project, saying it has begun mining fresh higher grade ore at the polymetallic mine in Romania and that the decline to Level 19 is progressing on schedule.
IronRidge Resources Limited (LON:IRR) said it has raised £12mln in an oversubscribed fundraising that it said will primarily be used to fund the development of its lithium and gold projects in the African nations of Ghana, Côte d’Ivoire and Chad.
Tiziana Life Sciences PLC (NASDAQ:TLSA, LON:TILS) said its chief executive Dr Kunwar Shailubhai and the chair of its scientific advisory committee, Dr Howard Weiner, will take part in what is described as a ‘fireside chat’ at the B Riley Virtual Neuroscience Investor Conference at which they will “provide updates on the company”. The two will present on Wednesday (April 28) from 10.30 EDT.
Emmerson PLC (LON:EML) confirmed the admission of its shares to trading on AIM after moving from London’s main market. Following the retirement of non-executive chairman Mark Connelly, direoctor James Kelly has taken up the role as of today.
Bushveld Minerals Ltd (LON:BMN) has announced that Mustang Energy PLC (LON:MUST) is acquiring an indirect interest of 11.05% in Enerox GmbH, a vanadium redox flow battery manufacturer providing grid scale and micro-grid energy storage solutions, in which Bushveld holds an indirect 25.25% stake.
Asiamet Resources Ltd (LON:ARS) has appointed Andrew Neale as general manager for the KSK copper project in Indonesia. Neale is a highly experienced metallurgist. He has worked on numerous copper and gold projects in Indonesia and globally with Freeport McMoran, Merdeka Copper Gold and Bumi Resources.
NTree International Ltd has hired Brendan Mueller as Head of Greater China to help develop its business in the region.
Union Jack Oil plc (LON:UJO) announced the launch of a new corporate website (www.unionjackoil.com), which contains new features, including educational videos, a world oil and gas consumption meter and several other state-of-the-art aspects. “The board of Union Jack hopes that the new website will turn web searchers into visitors and those visitors into new shareholders.”
6.55 am: Languid start predicted
The FTSE 100 is predicted to continue its languorous way on Tuesday after a subdued US session overnight.
After making leisurely progress over the past five days, London’s blue-chip stocks should start roughly flat around the 6,963 level they finished the previous day, according to spread betters on the IG platform.
Trading was mixed for the major Wall Street indices last night, with the Dow Jones falling 61 points or 0.2%, while the S&P 500 inched up 0.2% and the Nasdaq was led 0.9% higher by the big tech guns ahead of a frenetic week of earnings.
After hours, Tesla Inc (NASDAQ:TSLA) reported a 1,850% increase in earnings per share and a US$101mln gain on its bitcoin investment but that was still nowhere near enough to beat the Street’s estimates, with the stock falling in aftermarket trading.
Pre-tax profit jumped 79% during the first quarter, well above the market’s expectations, even though the top line remained sluggish due to low-interest rates.
Markets are likely to remain subdued due to the upcoming US Federal Reserve meeting and the big tech results week.
Furthermore, as said market analyst Michael Hewson, concerns about the coronavirus pandemic will not go away: “The resilience of equity markets, particularly in the US is in marked contrast to rising concerns about the situation in India which is looking absolutely horrific, and is likely to get a lot worse before it gets better, the consequences of which could well ripple out beyond India’s borders.”
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mostly lower on Tuesday as investors await cues from the U.S. Federal Reserve’s two-day meeting, which begins today, and more earnings.
The Hang Seng index in Hong Kong rose 0.14% while the Shanghai Composite in China slipped 0.41%.
In Japan, the Nikkei 225 fell 0.28% and South Korea’s Kospi dipped 0.37%.
Shares in Australia declined, with the S&P/ASX 200 trading 0.27% lower.
Proactive Australia news:
Horizon Minerals Ltd (ASX:HRZ) has received further validation of the golden potential of Boorara Gold Project, 15 kilometres east of Kalgoorlie-Boulder in the Western Australian Goldfields, with an updated independent mineral resource estimate delivering a 34% increase in grade.
archTIS (ASX:AR9) recorded a successful March quarter with its overall revenue, recurring revenue and gross profit all increasing significantly.
MGC Pharmaceuticals Ltd (ASX:MXC) (LON:MXC) (OTCMKTS:MGCLF) (FRA:H5O) has completed arguably its best-ever quarter, with a London Stock Exchange (LSE) listing and record sales highlighting a busy period.
Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD) has increased production from the Ungani Oilfield JV onshore in the Canning Basin in the southwest Kimberley region of Western Australia to in excess of 1,000 barrels of oil a day (bopd).
Pan Asia Metals Ltd (ASX:PAM) is well-positioned to advance current assets and secure additional ones as it moves into the next growth phase following a successful listing on the Australian Stock Exchange in October 2020.
St George Mining Ltd (ASX:SGQ) (FRA:S0G) has used recent geophysical surveys to identify multiple new nickel-copper sulphide targets at its flagship high-grade Mt Alexander Project in WA’s north-eastern Goldfields.
Great Southern Mining Ltd (ASX:GSN) has identified and ranked 21 new gold targets after evaluating a newly acquired regional exploration database in the Duketon Belt that include more than 12,000 drill holes and 24,000 soil samples.