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10.15am: Analyst note moves airline shares
A couple of airlines are flying high after broker upgrades.
British Airways owner International Consolidated Airlines Group (LON:ICAG) SA (LSE:IAG) is up 1.52% to 134.8p after Bank of America (NYSE:BAC) analysts raised their recommendation from neutral to buy and their price target from 140p to 200p.
The bank lifted its recommendation for Wizz Air Holdings PLC (LON:WIZZ) in the same way, and lifted its price target from 1860p to 3200p, prompting a 3.06% rise in the shares to 2350p.
But easyJet PLC (LON:EZJ) was not so lucky. Its shares are down 0.84% to 376.13p after Bank of America moved from buy to underperform and cut its price target from 450p to 340p.
Overall the FTSE 100 is still drifting around last night's closing level, up just 2.23 points at 7491.42.
9.35am: CBI calls for government's energy support plan for businesses to continue
Many companies could face collapse if the government removes its energy support package for businesses next April, the CBI has warned.
A CBI survey showed that companies expect their average energy costs to rise by more than 150% if the subsidies are withdrawn.
It said car and food manufacturers and intensive users such as steel makers should receive continued support beyond the spring.
Matthew Fell, CBI chief policy director, said companies accepted that blanket support was too expensive to go on indefinitely but targeted support needed to continue.
He said "There are no easy answers in all this, but the government will have to keep supporting the most vulnerable firms to help them stay competitive, to build resilience and in some cases to avoid collapse."
9.07am: China reopening hopes provide support for market
The prospect of China reopening its economy after adjusting its zero-COVID policy appear to be outweighing concerns about its growth prospect.
Insurer Prudential PLC is up 1.9% on hopes for a boost to its business in the country while mining groups - which are big suppliers to China - are also providing some support to the market for the same reason.
Rio Tinto PLC (LON:RIO) has risen 1.6% and Antofagasta PLC (LON:ANTO) has added 1.13%.
Oil is up slightly after its recent falls, with Brent crude 0.82% better at US$77.8 a barrel, helping push BP PLC (LON:BP.) up 1.28%.
8.42am: Frasers falls despite jump in half year profits
Frasers Group PLC is the biggest faller in the leading index so far.
Its shares are down 3.35% despite the company - whose brands now range from Sports Direct (LON:FRAS) to Flannels and Gieves & Hawkes - reporting a 39% rise in half year profits, albeit boosted by acquisitions.
It also says it is confident in its guidance for adjusted pretax profit of between £450mln to £500mln.
But caution over the outlook has hit the shares.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown (LON:HRGV), said: "The company admits that challenges lie ahead and so it will be hard to predict what 2023 will bring. This note of uncertainty knocked its share price in early trade this morning."
Analyst Nick Bubb says the most eye-catching announcement is a plan to build a new distribution centre in Coventry, following news it has also bought the Coventry Building Society Arena where it is now in dispute with Coventry City football club which plays there.
Bubb said: "it’s unclear what’s going to happen to the huge Sports Direct warehouse and office at Shirebrook in the North Midlands, but, as rumoured, Frasers has announced that it is to build a huge new distribution complex at Coventry, at an eye-catching cost of £600mln."
Elsewhere London Stock Exchange Group PLC (LON:LSEG) is down 2.84% at 7664p after analysts at UBS moved their recommendation from buy to neutral and cut their price target from 9000p to 8500p.
They said: "We are lowering our 2023-25 earnings per share estimates by 5-6% largely to reflect the recent weakening of the US$...
"We think the upcoming share overhang will weigh on LSEG's share price as Blackstone (NYSE:BX) & Thomson Reuters (NYSE:TRI) c35% stake in LSEG is unlocked over 2023-25."
Intermediate Capital Group (LON:ICP) has lost 1.93% after its shares went ex-dividend, while telecoms companies are also lower, with Vodafone Group PLC (LON:VOD) off1.76% and BT Group PLC (LON:BT.A) dropping 1.75%.
Despite all that, the FTSE 100 has edged into positive territory, up 2.98 points at 7492.17.
8.15am: Markets struggle in early trading
Leading shares remain in a holding pattern as investors await next week's key interest rate decisions from the US Federal Reserve, the Bank of England and the European Central Bank.
"Interest rate hikes might cool inflation, but the reality is they’ll also cool just about everything else." said Danni Hewson, AJ Bell financial analyst. "The question that’s been circling investors’ minds is how hard will the landing be and how long will it take for economies to get back on their feet?”
With no straight answer to that question, the FTSE 100 has dipped 6.96 points to 7482.23 in early trading , with investors also unsettled by the prospect of a winter of discontent in the UK as hundreds of thousands of workers plan to go on strike.
Among the companies reporting, British American Tobacco PLC (LON:BATS) is down 1.9% on profit taking after recent gains.
Richard Hunter, head of markets at interactive investor, said: "Recent market volatility and the rotation away from growth stocks into value has refocussed attention on the likes of the oil and tobacco stocks.
"However unfashionable they may be, propelled by strong cash generation, inelastic demand and generous dividend yields, the likes of British American Tobacco are having their own day in the sun..Indeed, the share price has spiked by 29% over the last year, as compared to a rise of 2% for the wider FTSE100,"
Balfour Beatty (LON:BALF) plc is 2.8% better after the infrastructure group said profit for the year was now expected to be ahead of market expectations.
And it was a similar story for packaging group DS Smith PLC, up 0.57% as it lifted its full year guidance in the wake of an 82% leap in interim pretax profits to £322mln.
7.45am: Sterling does an about-face on the US dollar but dips against euro
Despite looking weak in the earlier hours, Cable did an about-face in yesterday’s session and ended the day 0.6% higher at 1.220.
It was unsurprising given the general direction the greenback is headed (down, that is), and indicatively, the US Dollar Index (DXY) opened this morning’s session 0.3% lower at 104.84.
In this morning’s Asia trading window, the GBP/USD pair has inched higher to 1.221, and there is little on the economic calendar to suggest any catalyst for dramatic price action today.
GBP/USD is generally bearish as speculation of dollar top mounts – Source: tradingview.com
USD/CAD, which was on a bit of a rally leading up to the Bank of Canada’s Wednesday interest rate decision, fell back to an intraday day low of 1.358 when the bank opted for a 50 bps hike over the softer 25 bps option.
The pair is changing hands slightly lower at 1.356 in today’s Asia session.
Yesterday’s Eurozone GDP figures came in slightly higher than expected, with third-quarter growth of 0.3% beating out 0.2% forecasts.
The most vigorous growth, of 2.3%, was recorded in Ireland, with Malta and Cyprus expanding at 1.3%, while the steepest declines were in Estonia, Latvia and Slovenia.
In response, EUR/USD closed Wednesday 0.4% higher at 1.051 and has held onto that price point this morning.
While the euro closed lower against the pound, the EUR/GBP pair has so far gained 0.12% in today’s Asia trading session and is currently changing hands at 86.19p.
7.00am: Footsie seen slightly higher
FTSE 100 seen opening slightly higher on Thursday, supported by gains in Hong Kong, but the mood may remain subdued as growth worries continue to hit sentiment.
Spread betting companies are calling the lead index up by around 8 points.
Michael Hewson chief market analyst at CMC Markets UK said: “There appears to be little in the way of significant direction in markets at the moment, hardly surprising given next week’s looming central bank decisions, and we will probably continue to see further scratchiness in the upcoming days.”
In the US, markets ended a more subdued trading session little changed pausing for breath after the recent volatility as investors look ahead to next week’s FOMC meeting.
At the close the Dow Jones Industrial Average was up 1 point at 33,597, the S&P 500 fell, for a fifth consecutive day, by 7 points, or 0.2%, to 3,934 while the Nasdaq Composite dipped 56 points, or 0.5%, 10,959.
“The market’s kind of bobbing and weaving and finding its breath after the big rally off the October lows,” Ryan Detrick, chief market strategist at the Carson Group told CNBC.
In Asia on Thursday, the Japanese Nikkei 225 index was down 0.4%, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 3.0%.
Back in London and trading statements are expected from construction firm Balfour Beatty and cigarette maker British American Tobacco, while there will also be half-year results from packaging firm DS Smith, online estate agent Purplebricks, and retailer Frasers Group for investors to digest.
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