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London open: Stocks fall on weak US cues; Persimmon bucks trend
(Sharecast News) - London stocks fell in early trade on Wednesday, taking their cue from a downbeat session on Wall Street after First Republic's results reignited concerns about the banking sector, despite well-received results from Microsoft and Alphabet. At 0840 BST, the FTSE 100 was down 0.3% at 7,866.61.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Realisation is dawning that more ominous clouds are gathering over the US economy, causing fresh nervousness for investors. Despite some better-than-expected results from the first of the big tech crowd to report, the darkening picture of consumer confidence has increased concerns about lower spending ahead.
"The worry mill is continuing to grind about the banking crisis, with First Republic Bank looking fragile after its shares collapsed to a record low. The regulatory cavalry is likely to be on standby to step in unless more funding can be raised from the large white knight lenders. Concerns about the raft of problems piling up for the global economy is keeping pressure on oil prices. Brent crude is hovering around $81 a barrel, down 7% from its highs earlier in the month as lower demand for energy is forecast amid ever tightening financial conditions."
In equity markets, Primark owner AB Foods was under pressure again after disappointing results a day earlier.
Consumer goods giant Reckitt Benckiser was also down as it announced the appointment of a new chief executive and posted a rise in first-quarter sales amid price hikes.
Bunzl fell despite saying it expects annual revenue and operating margin to be slightly ahead of forecasts as it reported a rise in first-quarter sales of 8.4%.
Building materials company CRH lost ground even as it reported a "positive" start to the year, with first-quarter sales and EBITDA ahead of the previous year amid good demand.
Watches of Switzerland was under the cosh, having surged on Tuesday after markets blog Betaville said it was at the centre of takeover speculation,
GSK was little changed as it said first quarter profits and revenue both beat expectations, driven by its shingles and meningitis treatments, among others.
On the upside, miners were among the top performers following heavy losses on Tuesday, with Rio Tinto, Glencore, Anglo America and Antofagasta all higher.
Persimmon rallied as the housebuilder posted a slump in first-quarter completions but said it expects full-year 2023 volumes to be towards the top end of guidance following an improvement in sales rates since the start of the year. Peers followed suit, with Taylor Wimpey and Barratt also trading up.
Standard Chartered nudged higher after it posted better-than-expected first-quarter profits, driven by higher interest rates and forecast annual earnings at the top end of guidance.
Susannah Streeter said: "Given the turmoil we've seen in the banking sector over recent weeks, even in the last 24 hours with First Republic's woes so front of minds, it's a breath of fresh air to see Standard Chartered surpass earnings expectations and post a pretty upbeat outlook.
"Higher interest rates continue to act as a headwind for profits, but arguably more important in the current climate was the robust customer deposit numbers and a credit impairment charge of just $26m, well below market expectations. This was a resilient set of results that should help to quell some of the fears that issues are systemic throughout the sector."
Elsewhere, Smith & Nephew gained after the medical equipment manufacturer reiterated its full-year guidance after seeing revenues improve in the first quarter.
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