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(Alliance News) - Share prices in London were on the back foot in early trade on Monday, following a rocky session in Asia, while travel stocks were higher after a promising first quarter from Ryanair.
The FTSE 100 index was down 30.21 points, or 0.4%, at 6,997.37 early Monday. The mid-cap FTSE 250 index was down 50.37 points, or 0.2%, at 22,833.02. The AIM All-Share index was up just 0.59 of a point at 1,233.13.
The Cboe UK 100 index was down 0.5% at 696.45. The Cboe 250 was down 0.3% at 20,516.61, but the Cboe Small Companies was up 0.1% at 15,030.51.
The CAC 40 in Paris and the DAX 30 in Frankfurt were both 0.5% lower.
There was trepidation ahead of a busy week of earnings both in London and New York.
"Markets face a stern test this week ahead of an avalanche of corporate earnings, with high expectations attached," interactive investor analyst Richard Hunter commented.
"Tech giants such as Alphabet, Apple, Microsoft, Facebook and Amazon will all provide updates alongside a slew of other companies, ranging from McDonald’s to Starbucks, and from Exxon Mobil to Tesla."
Hunter also highlighted Wednesday's US Federal Reserve interest decision as well as a US gross domestic product reading on Thursday.
"In the UK, the pace is equally frenetic as the half-year reporting season gets into full swing," Hunter added.
In London, miners were the best-performing large-cap stocks. Rio Tinto rose 1.6%, Antofagasta climbed 1.5%, and Anglo American was 1.1% higher.
B&M European Value Retail fell 0.8% as RBC cut the stock to Sector Perform from Outperform.
Mid-cap insurer Beazley rose 1.2% as Berenberg raised it to Buy from Hold.
Ryanair shares were up 3.2% early Monday in London. It posted a sharp revenue hike in its first quarter, as the budget airline carried 7.6 million more passengers than a year before.
In the three months ended June 30, revenue jumped to EUR371 million from EUR125 million a year before, but its pretax loss stretched to EUR324.5 million from EUR210.0 million.
Ryanair's customer numbers totalled 8.1 million, a sharp hike from 500,000 in the Covid-hit first quarter of financial 2021.
"We are seeing a strong rebound of pent-up travel demand into August and September, and we expect this to continue into the second half of FY22, with pre-Covid-19 growth planned to resume strongly in summer 2022," Ryanair said.
Budget carrier easyJet rose 1.4%, while British Airways-parent International Consolidated Airlines Group was up 0.4%.
London airport Heathrow, a key travel hub for British Airways, posted a less-than-stellar first half on Monday. It warned cumulative losses from Covid-19 have grown to GBP2.9 billion.
Sterling was trading at USD1.3769 early Monday in London, up from USD1.3754 late Friday. The euro fetched USD1.1800, up from USD1.1763. Against the yen, the dollar slipped to JPY110.15, from JPY110.53.
Brent oil was trading at USD73.32 a barrel early Monday, down from USD73.64 at the London equity market close on Friday. Gold was trading at USD1,810.83 an ounce, up from USD1,800.34.
In China, the Shanghai Composite closed down 2.3%, while the Hang Seng index in Hong Kong was 3.6% lower in late trade. The Nikkei 225 closed up 1.0%, the index playing catch up after markets in Tokyo were closed on Thursday and Friday last week. The S&P/ASX 200 in Sydney ended largely flat.
"A tense start to Tianjin talks between the US and China earlier, with the latter declaring that relations with the US are at a 'stalemate and faces serious difficulties', is weighing on risk sentiment at the start of the new trading week. Notably, equity indices across China and Hong Kong are down as a result, with Beijing's crackdown on the tech sector also likely weighing on stocks across the region," analysts at Lloyds Bank commented.
Beijing urged the US to stop "demonising" China during Monday talks with Deputy Secretary of State Wendy Sherman, the highest-level official to visit under President Joe Biden's administration.
Sherman arrived in the city of Tianjin on Sunday, aiming to seek "guardrails" as ties between the world's top two economies continue to deteriorate on a range of issues from cybersecurity to human rights.
"The hope may be that by demonising China, the US could somehow... blame China for its own structural problems," Chinese Vice Foreign Minister Xie Feng told Sherman, in a readout issued by China's foreign ministry.
"We urge the US to change its highly misguided mindset and dangerous policy," the statement quoted Xie as saying, adding that Washington views China as an "imagined enemy".
Hong Kong-listed technology stocks slumped on Monday, with Tencent down 7.1%. Tencent must relinquish its exclusive music label rights, China's market regulator said Saturday, after finding that the firm had violated antitrust laws.
By Eric Cunha; ericcunha@alliancenews.com
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