HSBC Holdings (LON:HSBA) and Prudential (LON:PRU) are among today’s UK share prices to watch, trading in the red on the back of disappointing macroeconomic data out of China. In smaller London-listed companies, SThree (LON:STHR) is up after updating investors on its performance, while a report about a potential sale is pressuring Kier Group (LON:KIE).
China numbers weigh on Asia-exposed stocks
Asia-focused HSBC and Prudential are weighing on the benchmark FTSE 100 index today, with the companies’ shares suffering after data showed that China’s industrial output growth had slowed to more than a 17-year low. The latest numbers come against the background of the ongoing trade war between Washington and Beijing.
“Chinese industrial production, in particular, was soft, with a year-on-year increase of five percent marking the lowest reading for this metric in 17 years and further supporting the notion of a slowing global economy,” said David Cheetham, the chief market analyst at xtb, as quoted by Proactive Investors. “The Chinese national stats bureau have since attempted to play down the significance of the poor data, but it’s pretty obvious that their economy is slowing. Moreover, given the past lack of credibility associated with economic data from Beijing, the true figures could well actually be even worse.”
Shares in HSBC have given up about one percent in early afternoon trade, while the Pru is about 1.35 percent worse off, compared with about a 0.6-percent fall in the benchmark FTSE 100 index.
Elsewhere in the FTSE 100 index, blue-chip utilities have been in demand, with investors flocking to defensive shares. National Grid (LON:NG), British Gas owner Centrica (LON:CNA), and water utilities United Utilities (LON:UU) and Severn Trent (LON:SVT) are all trading in positive territory. IG’s meanwhile has taken a look at water utilities in particular, including smaller London-listed rival Pennon (LON:PNN), in the wake of the companies’ respective updates.
“Severn Trent was by far the best performer in the last financial year when it came down to improving profit, cash flow and its dividend but it also added more debt and share price growth lagged its peers,” IG’s writer Joshua Warner commented in a note today, adding that “United Utilities was the only company to report growth across the board, albeit in the low single digits, and while Pennon’s dividend and share price both improved it also saw cash flow and profitability come under pressure”.
In smaller London-listed companies, Kier Group (LON:KIE) is in the doldrums after a report in The Times suggested that the company had sounded out advisers about the potential to sell the division, which is understood to be valued at between £100 million and £150 million.
“At face value, the amount quoted of 100-150 million pounds would be disappointing for the whole business and compares to management’s own assessment… at FY 2018 of 291 million pounds,” Liberum analysts wrote, as quoted by Reuters. Kier’s shares are changing hands more than 19 percent in the red this Friday.
Specialist staffing business SThree meanwhile is up after reporting first-half performance in line with management expectations, and good momentum in its Contract business. Shares in the company are up by about three percent in early afternoon trade.
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UK share prices to watch next week
While the Federal Reserve’s upcoming policy meeting is likely to be the main focus of next week, investors will also have some UK share prices to watch, with companies including Ashtead (LON:AHT) and Whitbread (LON:WTB) scheduled to update investors on their performance.
Ashtead reports fourth-quarter and year-end results on Tuesday, which will include a period of flash flooding in the US.
“I suspect Ashtead will see slower growth”, says Charlie Campbell, an analyst at Liberum, commented, as quoted by Proactive Investors, adding, however, that the US markets are currently “upbeat” about the outlook for the country’s construction industry, which could provide more of a boost once the literal and figurative grey skies clear.
Whitbread will follow will a first-quarter report on Friday and IG reports that Whitbread’s share price is currently trading at 4,681p a share ahead of the results, although investment bank UBS has set a target price at 5,000p a share, contending that there is a potential upside of 5.6 percent.
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