FTSE 100 fails to sustain 7,400; Wall Street gains as retail sales jump

US Markets: Wall Street started on a positive footing on Tuesday, 16 November, with the three major averages advancing up to 0.60% after the US retail sales jumped 1.7% in the month of October, surpassing the street expectations. A better-than-expected appreciation in the retail sales has effectively supplemented the American equities as market participants remain a perpetual look out of favourable conditions that can regenerate the optimism.

However, the odds of a marginal correction are higher with all the three stock indices hovering near respective record highs as Covid worries resurface with a sharp resurgence in the number of infections in the Euro Area.

Meanwhile, the industrial production rising by 1.6% in October of 2021, provided a much-needed comfort to investors after a 1.3% drop in the preceding month. This has been the biggest monthly gain in industrial production since March this year, largely due to the lower base effect.

Wall Street rejoices retail sales, Biden-Xi meet, industrial production data

The July-September earnings for Walmart and Home Depot have alleviated the worries for investors as the third quarter corporate earnings season comes to an end. The impressive outlook for the full year certainly reflects the effects of robust consumer spending, which is likely to augment further in the Christmas festivities and the upcoming flurry of deals during the Black Friday sales.

As far as the retail sales are concerned, the reading has registered the sharpest gain since March of 2021 as consumers are more willing to move out and spend on holiday-related stuff than at any other time during the 20-month long course of Covid-19 pandemic.

Non-store retailers, gasoline and electronics & appliance stores provided the major boost to the retail sales in October, while sales of clothing and health & personal care items declined in the corresponding period. The sales for food services and drinking places were largely unchanged.

The Dow Jones Industrial Average advanced 115.23 points, or 0.32% to 36,203.90, the tech leader Nasdaq Composite rose 15.89 points, or 0.10% to 15,869.74, while the side share market index S&P 500 added 9.52 points, or 0.20% to 4,692.32.

US Market News: Shares of Home Depot topped the 30-constituent heavy Dow Industrials on Tuesday with the stock rising more than 4%. Other major gainers on Dow include Nike, UnitedHealth Group, Travelers Companies, Merck & Co and Procter & Gamble. On the other hand, shares of Boeing, Walmart and American Express cracked 1-3%, emerging as the major negative-point contributors, followed by the marginal drops in shares of Goldman Sachs, JPMorgan Chase, Apple and Walgreens Boots Alliance.

UK Markets: UK shares went deeper into the negative territory in the terminal trades on Tuesday, with the domestic benchmark FTSE 100 falling close to 0.40%. The index managed to briefly oscillate in the positive region after the rate of unemployment eased to 4.3% and the employment rate appreciating to 75.4% in the three months to September, effectively signalling comprehensive recovery in the employment landscape.

Shares of Vodafone Group emerged as the table toppers on Tuesday with the stock rallying more than 5% after the Berkshire-headquartered telecommunications corporation reported a rise of 5% in the group revenue to €22.5 billion in H1 FY22 as compared to a revenue of €21.4 billion in the comparable period of previous fiscal. The company has announced an interim dividend of 4.5 euro cents.

Shares of AstraZeneca collapsed again as the stock plunged more than 5% intraday, taking the three-day fall to over 10%. A value erosion of more than 10% in the shares of the market capitalisation leader has severely dragged the headline index. A quick reversal in AstraZeneca shares can lead the index to newer highs in the near term with the average surpassing the psychological level of 7,500.

FTSE 100 shed 22.13 points, or 0.30% to 7,329.73, while the mid-cap average 81.73 declined 81.73 points, or 0.35% to 23,539.85.

FTSE 100 (1-year performance)

Source: EODHD/Others

Market Snapshot

Top 3 volume leaders: Lloyds Banking Group, Vodafone Group and BP

Top 3 sectoral indices: Telecommunications, Fossil Fuels and Beverages

Bottom 3 sectoral indices: Medicine and Biotech, Food Products and Industrial Transportation

Crude oil prices: Brent crude down 0.43% at $81.70/barrel; US WTI crude down 0.73% at $79.17/barrel

Gold prices: An ounce of gold traded at $1,863.60, down 0.16%

Exchange rate: GBP vs USD - 1.3419, up 0.01% | GBP vs EUR - 1.1829, up 0.25%

Bond yields: US 10-Year Treasury yield - 1.606% | UK 10-Year Government Bond yield - 0.9715%

Markets @ 15:50 GMT