London open: FTSE edges lower; Ashtead rallies after results

London stocks nudged lower in early trade on Tuesday, taking their cue from a downbeat session on Wall Street, after a stronger-than-expected ISM print fuelled concerns about the pace of Fed rate hikes.

At 0835 GMT, the FTSE 100 was down 0.2% at 7,554.86.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Worries that the Fed could unwrap an unwelcome present of another super-sized rate hike when policymakers meet next week are sprinkling Christmas fear on indices. Wall Street registered its worst day in almost a month after a snapshot from the services industry showed consumer resilience was strong.

"This has fuelled speculation that the US central bank will have to be more Scrooge-like and make borrowing even more expensive to rein in inflation. Companies still appear to be dealing with pent-up demand with the ISM reading showing the services sector is expanding merrily.

"With central bank policies so far having meagre impact on the jobs market, the chances of a 0.75% rate hike being announced on the 14th are now considered to be higher. The potential effect of another rapid tightening round has led to jitters about repercussions for the global economy."

On home shores, investors were mulling over industry data showing that Black Friday and the colder weather helped boost high street sales last month.

According to the latest BRC-KPMG Retail Sales Monitor, sales in the four weeks to 26 November rose 4.2%, compared to a rise of 5.0% a year earlier.

On a like-for-like basis, sales increased 4.1% from November 2021, when they rose 1.8%.

In the three months to November, food sales jumped 5.5% on a like-for-like basis, while non-food sales fell 0.4%.

The sales figures are not adjusted for inflation, however, meaning the rise in sales likely masked a "much larger" drop in volumes, the British Retail Consortium noted.

Helen Dickinson, BRC chief executive, said: "As the weather began to turn, customers were quick to purchase winter warmers, such as coats, hot water bottles and hooded blankets. Black Friday discounts also boosted sales of home furnishings, as many households traded big nights out for budget nights in.

"However, sales growth remained far below current inflation, suggesting volumes continued to be down on last year."

In equity markets, broker notes were having an impact. Mondi was knocked lower by a double downgrade to ‘underperform’ at Credit Suisse, while Close Brothers slumped after a downgrade to ‘underweight’ at JPMorgan. Lloyds fell after a downgrade to ‘neutral’ at JPM and United Utilities was also hit by a downgrade to ‘neutral’ at JPM.

On the upside, DS Smith was boosted by an upgrade to ‘outperform’ at Credit Suisse, while Barclays was up after an upgrade to ‘overweight at JPM and Hikma gained after an initiation at ‘outperform’ by RBC Capital Markets.

Rental equipment firm Ashtead was the top riser on the FTSE 100 after it said that full-year results were set to be ahead of its previous expectations as it hailed a strong first-half performance.

Travel food outlet operator SSP Group surged to the top of the FTSE 250 after saying it swung to a full-year profit as passenger numbers rebounded from the Covid pandemic.

Phoenix Group, Tritax and Paragon Banking all rose after well-received updates.

Market Movers

FTSE 100 (UKX) 7,554.86 -0.17%
FTSE 250 (MCX) 19,270.46 -0.31%
techMARK (TASX) 4,419.32 -0.11%

FTSE 100 - Risers

Ashtead Group (AHT) 5,250.00p 4.25%
Rolls-Royce Holdings (RR.) 93.39p 3.09%
Smith (DS) (SMDS) 309.60p 1.41%
Croda International (CRDA) 6,982.00p 0.98%
Phoenix Group Holdings (PHNX) 602.00p 0.97%
Compass Group (CPG) 1,910.00p 0.74%
Bunzl (BNZL) 3,039.00p 0.60%
Relx plc (REL) 2,343.00p 0.56%
Barclays (BARC) 157.14p 0.55%
Unilever (ULVR) 4,200.50p 0.51%

FTSE 100 - Fallers

Mondi (MNDI) 1,480.50p -3.93%
Severn Trent (SVT) 2,697.00p -2.25%
Fresnillo (FRES) 879.80p -1.92%
United Utilities Group (UU.) 1,036.50p -1.89%
Harbour Energy (HBR) 303.60p -1.87%
Endeavour Mining (EDV) 1,718.00p -1.83%
Lloyds Banking Group (LLOY) 45.79p -1.25%
BP (BP.) 477.75p -1.19%
Shell (SHEL) 2,347.50p -1.18%
International Consolidated Airlines Group SA (CDI) (IAG) 133.58p -0.99%

FTSE 250 - Risers

SSP Group (SSPG) 223.10p 3.10%
Octopus Renewables Infrastructure Trust (ORIT) 101.00p 2.43%
Tritax Eurobox (GBP) (EBOX) 68.00p 2.10%
Hikma Pharmaceuticals (HIK) 1,542.00p 1.85%
Paragon Banking Group (PAG) 472.80p 1.81%
Network International Holdings (NETW) 342.60p 1.12%
PureTech Health (PRTC) 297.00p 0.85%
Hill and Smith (HILS) 1,216.00p 0.83%
Plus500 Ltd (DI) (PLUS) 1,828.00p 0.77%
FirstGroup (FGP) 103.60p 0.68%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 135.30p -4.04%
Close Brothers Group (CBG) 1,056.00p -3.74%
Shaftesbury (SHB) 346.60p -3.40%
Lancashire Holdings Limited (LRE) 582.50p -2.92%
Synthomer (SYNT) 126.50p -2.69%
Ashmore Group (ASHM) 219.80p -2.57%
Pennon Group (PNN) 932.50p -2.41%
Hochschild Mining (HOC) 66.15p -2.22%
RHI Magnesita N.V. (DI) (RHIM) 2,178.00p -2.16%
TUI AG Reg Shs (DI) (TUI) 144.60p -2.00%