Home Markets Markets open slightly weaker across the UK and Europe

Markets open slightly weaker across the UK and Europe

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Steve Clayton, HL Select Fund Manager:

“Markets have opened slightly weaker this morning across the UK and Europe, despite a strong session on Wall Street last night that saw the tech-heavy Nasdaq market lead the way with a gain of 2.0%, almost double the pace of the wider S&P index, which pushed 1.1% higher.

Asian markets took the cue from the States, with Japan’s Nikkei index rising by 1.2% and gains too in Australia and Hong Kong.

Back home though, caution rules; FTSE 100 was trading 13 points lower at 7,568 in early trading, with the STOXX 50 index of leading European stocks down just a fraction at 3,823.

Luxury Goods maker, Hermes International SCA reported a 27% leap in sales in the first quarter of 2022, driven by demand for their ready-to-wear ranges and a strong showing by their leather goods division. Whether the growth can continue remains to be seen, with the company forced to close some of its top stores in China due to new covid clamp-downs over there. The market took a cautious view, pushing the shares 1% lower.

Back in the UK, National Grid raised its guidance for earnings in the financial year just ended on 31 Mar. The company has benefited from inflationary impacts on its revenues in the domestic market, only partly offset by higher tax charges. The shares were barely moved by the news, possibly because the stock was already within touching distance of its all-time highs.

The main event today comes later though, when the European Central Bank meets to decide whether to change the pace of monetary tightening. The eurozone faces the same inflationary challenges as the UK and USA, with rates trailing far behind the accelerating rate of inflation, but economies far from ready to handle significant anti-inflationary rate hikes.”

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