London open: Stocks dip after reports of US tax hike plans hit Wall Street

Stocks have started lower at the end of the week, tracking profit-taking on Wall Street overnight, after Bloomberg reported that Democrats in Congress wanted to double the capital gains tax to nearly 39.6%.

"Of course, what President Biden wants, and what he will get, could be two totally different things, especially when it comes to tax rates," Jeffrey Halley, Senior Market Analyst, Asia Pacific, at Oanda pointed out.

"Goldman Sachs suggests the tax hike will be watered down to 28% from above 40%, an entirely reasonable conclusion."

Another key consideration was whether it would be applied retroactively to 2021.

Against that backdrop, as of 0828 BST the FTSE 100 was trading lower by 0.27% or 18.86 points to 6,919.38, while the second-tier index was down by 0.32% or 71.22 points at 22,293.43.

In parallel, futures tracking the S&P 500 were bouncing back by 7.0 points to 4,134.75.

As an aside, Bitcoin was down 11.41% to 48,030.58.

There was some very good news on the economic front.

According to the Office for National Statistics, UK retail sales surged at a month-on-month pace of 5.4% in March (consensus: 1.5%).

In turn, the year-on-year rate of increase was driven from -3.7% to 7.2% (consensus: 3.5%).

Consultancy GfK meanwhile reported an improvement in its UK consumer confidence index from March's reading of -16 to -15 in April.

Public sector net borrowing data for March also came in better than expected, at £28.0bn (consensus: £22.0bn).

All told, ONS estimated that public sector borrowing for the 2020/21 fiscal year totalled £303.1bn or 14.5% of GDP, the most since WWII.

It was however well beneath the OBR's projection for £354.6bn in the March budget.

Still ahead, IHS Markit is scheduled to release UK Purchasing Managers Indices for UK manufacturing and services at 0930 BST.

First Group sells US assets to lower debt pile

FirstGroup has agreed to sell its First Student and First Transit US bus businesses to EQT Infrastructure for an enterprise value of £3.3bn. The UK transport group said it would use £2.19bn of initial net proceeds to cut debt, pay into its pension schemes and return £365m, or 30p a share, to shareholders during 2021.

GlaxoSmithKline said the US Food and Drug Administration (FDA) has approved ‘Jemperli’, or dostarlimab-gxly, based on its Biologics License Application. The AIM-traded firm said dostarlimab, a programmed death receptor-1 (PD-1) blocking antibody, is indicated for the treatment of adult patients with mismatch repair-deficient recurrent or advanced endometrial cancer, as determined by an FDA-approved test, that have progressed on or following prior treatment with a platinum-containing regimen. It said the indication was given accelerated approval based on tumour response rate and durability of response.

LondonMetric Property has sold two long income assets let to Marks & Spencer and Wickes in Derby for a combined £11.1m to unnamed buyers. The sale represents a blended net initial yield of 6% and a 7% surplus to the last reported book value. One property is a M&S Foodhall, sold by way of a forward commitment to an overseas private investor for £6.2m and the other a Wickes store, sold to an overseas property company for £4.9m.

Market Movers

FTSE 100 (UKX) 6,913.35 -0.36%
FTSE 250 (MCX) 22,286.09 -0.35%
techMARK (TASX) 4,344.09 -0.44%

FTSE 100 - Risers

Intertek Group (ITRK) 6,224.00p 1.40%
Glencore (GLEN) 296.40p 1.33%
Antofagasta (ANTO) 1,827.50p 1.25%
Pershing Square Holdings Ltd NPV (PSH) 2,735.00p 0.92%
Kingfisher (KGF) 363.50p 0.80%
Rio Tinto (RIO) 6,052.00p 0.78%
Ashtead Group (AHT) 4,745.00p 0.70%
Flutter Entertainment (CDI) (FLTR) 14,995.00p 0.60%
Evraz (EVR) 634.00p 0.60%
Anglo American (AAL) 3,112.00p 0.58%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 196.44p -2.02%
Rolls-Royce Holdings (RR.) 100.96p -1.81%
Next (NXT) 7,916.00p -1.66%
Land Securities Group (LAND) 707.80p -1.64%
Informa (INF) 543.60p -1.63%
BAE Systems (BA.) 492.10p -1.56%
Melrose Industries (MRO) 161.25p -1.44%
Scottish Mortgage Inv Trust (SMT) 1,234.50p -1.36%
Weir Group (WEIR) 1,915.00p -1.34%
Smith & Nephew (SN.) 1,473.00p -1.27%

FTSE 250 - Risers

FirstGroup (FGP) 95.15p 11.81%
Clarkson (CKN) 2,980.00p 3.65%
SSP Group (SSPG) 339.90p 3.44%
National Express Group (NEX) 325.60p 2.52%
Network International Holdings (NETW) 429.30p 2.21%
Ferrexpo (FXPO) 425.00p 1.77%
Playtech (PTEC) 461.20p 1.23%
Mitie Group (MTO) 63.90p 1.11%
Biffa (BIFF) 279.50p 1.08%
Mitchells & Butlers (MAB) 308.40p 1.05%

FTSE 250 - Fallers

Workspace Group (WKP) 790.00p -5.50%
Carnival (CCL) 1,605.80p -4.15%
Baillie Gifford US Growth Trust (USA) 325.00p -2.69%
WH Smith (SMWH) 1,837.50p -2.34%
Cineworld Group (CINE) 95.92p -2.26%
easyJet (EZJ) 989.20p -2.20%
Meggitt (MGGT) 460.80p -2.06%
BMO Global Smaller Companies (BGSC) 162.00p -2.06%
Edinburgh Worldwide Inv Trust (EWI) 352.50p -1.67%
Murray Income Trust (MUT) 873.00p -1.47%