Must read: Tesla, FTSE 100, Kering, Reckitt Benckiser

GLOBAL MARKETS

Tesla Inc (NASDAQ:TSLA)’s after-hours surge has helped revive some risk appetite among investors, with equities in Asia rallying overnight and European bourses opening higher too. 

The FTSE 100 continues to stage gains after hitting fresh record highs on Tuesday thanks to supportive corporate updates and a weaker pound. First-quarter trading updates continue to take centre stage today, with Reckitt Benckiser Group (LSE:RKT) leading the charge on the UK blue-chip index thanks to stronger than expected quarterly sales from the consumer goods giant.

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Miners are also outperforming, with Rio Tinto Registered Shares (LSE:RIO), Antofagasta (LSE:ANTO), Anglo American (LSE:AAL) and Glencore (LSE:GLEN) trading near the top of the FTSE 100. At the other end, Lloyds Banking Group (LSE:LLOY) is hovering near the bottom of the index after the British lender reported a drop in Q1 profits. And Burberry Group (LSE:BRBY) is sinking, dragged down by Kering SA (EURONEXT:KER) which has plunged by almost 10% after warning on profit again. 

In central bank news, the Bank of England’s chief economist Huw Pill said that interest rate cuts remain ‘some way off’ in a blow to those hoping for a new term rate cut in the UK, adding to the sense that central banks are in no rush to switch to monetary loosening. 

In the US, shares in Tesla surged by more than 13% after hours, reversing some of this year’s slide. Investors shrugged off the first-quarter profit and revenue miss, focusing instead on the electric vehicle maker’s plans to accelerate the roll-out of a cheaper car, with production of new models brought forward from late 2025 to later this year. Investor focus now turns to tech results from Meta Platforms Inc Class A (NASDAQ:META) which are due out later today followed by Microsoft Corp (NASDAQ:MSFT) and Google-owner Alphabet Inc Class A (NASDAQ:GOOGL) tomorrow.

KERING

Shares in Kering have fallen sharply after it warned first-half profit will drop by between 40% and 45%, much bigger than analysts had expected. Meanwhile, it reported first-quarter like-for-like group sales down 10% to €4.5 billion. Sales at its key luxury brand Gucci suffered an 18% slide. 

Kering has been struggling with sluggish market conditions, particularly in China. But there’s only so much weakness that can be explained away by China – Kering’s shares have sharply underperformed rivals like Lvmh Moet Hennessy Louis Vuitton SE (EURONEXT:MC) and Hermes International SA (EURONEXT:RMS), both of which have been able to weather the storm much better. Kering’s unique problem is that fickle fashionistas have been shifting their preferences away from its most important brand Gucci towards other luxury rivals, and the Paris group is suffering badly as a consequence.  

Kering shares already tumbled last month after the French conglomerate issued a profit warning. A series of analysts including Morgan Stanley, RBC, Jefferies and JP Morgan have all cut their price targets on the stock today in a worrying sign of diminishing confidence towards the luxury conglomerate. Shares in Kering are down almost 20% so far this year.

RECKITT BENCKISER

Reckitt Benckiser reported first-quarter like-for-like net sales up 1.5%, beating analysts’ expectations for growth of 0.9%. There was strength in its hygiene segment, with revenue growth of 7.1% thanks to products like Harpic and Vanish, but nutrition suffered a near 10% slide in like-for-like net revenue. The consumer goods group said its on track to meet full-year revenue and profit targets. 

While growth for the company has mostly been driven by its price hikes lately, the company said it is now returning to a more balanced mix of growth from price and volume. Some of its strongest brands like Dettol, Durex and Lysol have already seen volume growth in the quarter. 

It is hoping that with inflation cooling, strong wage growth and the UK emerging from last year’s recession, price sensitivity among consumers will fall and shoppers can go back to picking Reckitt’s premium brands over cheaper own brand supermarket substitutes. 

So far in 2024, shares in Reckitt have had a tough time, shedding more than 20% until yesterday’s close and more than a third over the past 12 months. However, the stock is enjoying a bounce today, up by more than 4%, landing the company at the top of the FTSE 100 leaderboard.