Packaging stocks rise, FTSE 100 up
Disappointing results from Amazon as consumers begin to curb their online shopping failed to bring down the London-listed packaging giants today.
Shares of Mondi, Smurfit Kappa and DS Smith rose 3% in the FTSE 100 index as investors focused on their progress to offset sharply higher costs.
Dublin-based Smurfit announced a 33% increase in revenue and profit for the first quarter and told investors today that demand continues to be strong while recovering costs and other pressures from the supply chain through higher prices.
Managing Director Tony Smurfit said the quarter presented significant operational challenges: “Virtually all input costs rose sharply and already strained markets and supply chains were exacerbated by the war in Ukraine.”
Smurfit upped 89p to 3360p, Mondi added 55p to 1516p and DS Smith upped 8.6p to 334.2p after the update, which came hours after internet giant Amazon gave a sales forecast below Wall Street expectations for the second quarter.
Shares of Amazon reversed 9% in extended trading, although earlier strength in the Nasdaq ensured London’s FTSE 100 index found positive territory today.
Ocado and tech investor Scottish Mortgage both rose 3% as the premier division ended a volatile April up 21.85 points to 7,531.04, helped by a UK corporate earnings season that largely avoided major scares.
One sector that showed resilience was building supplies after reassuring updates today from Travis Perkins, roofing firm SIG and insulation firm Kingspan.
Interest in energy efficiency projects boosted Toolstation owner Travis as sales rose 13.6% in the first quarter and he reported “manageable” levels of cost inflation.
Shares fell 16.5p to 1250.5p despite broker Peel Hunt’s target price of 1850p. Kingspan fared better, raising its optimism for the current quarter by 4% on the basis of a solid order book and “decent activity” in most markets.
SIG took the lead in billing, however, as it reported a 25% increase in like-for-like sales for the March quarter, well ahead of previous expectations. The shares jumped 14% or 5.15p to 41.9p.
The FTSE 250 index rose more than 1%, up 241.88 points to 20,861.50, with Dr Martens and Marshalls among the stocks up 4%. Clean air company Johnson Matthey jumped 24% or 430.5p to 2302p when it emerged that New York-based Standard Investments had acquired a 5% stake in the former blue chip company.
Stocks returned to where they were in November, when investor confidence was shaken by a surprise decision to exit the battery materials sector in favor of a pivot to green economy technologies, including the ‘hydrogen.
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