London midday: Stocks hold onto gains ahead of US GDP figures

by | Apr 29, 2021

London shares were holding higher, boosted by a raft of updates including from StanChart, Unilever and St.James’s Place, even as investors waited on a preliminary reading on US first quarter domestic product growth.
Feeding risk appetite as well, overnight the Federal Reserve said it was simply not yet time to talk about ‘tapering’ bond purchases.

“The broad mood in the market is upbeat after the Fed stuck to its dovish verse, insisting that it was still too early to discuss tapering support to the economy, despite a more optimistic view of the path of US economic recovery. The markets have been reassured by the consistent message from the Fed,” said Sophie Griffiths, Market Analyst, UK & EMEA, at OANDA.

As of 1205 BST, the Footsie was up by 0.70% or 48.99 points to 7,012.87, alongside a 0.22% or 50.11 point rise on the second-tier index to 22,489.93.

The US GDP numbers at 1330 BST in the US were expected to show bumper growth, against the backdrop of a proposal from Joe Biden the night before for $1.8trn of fresh fiscal stimulus.

Not lost on financial markets, those and other fiscal stimulus had yielded the best stock market returns in the States for the start of a presidential term since Franklin Delano Roosevelt.

In parallel, futures on the S&P 500 were up 29.75 points at 4,206.0, boosted by gains in after pre-market trading in New York for Apple and Facebook shares following their latest quarterly numbers.

As other market watchers, Interactive Investors’ Head of Equity strategy, Lee Wild, singled out Apple, which as he explained “crushed” consensus forecasts for the first quarter thanks to record sales growth in all geographies.

To take note of, US 10-year Treasury bond yields were up four basis points at 1.65%.

On the broker recommendations front, analysts at Jefferies added buy-rated Anglo American (target price: 4,000.0p) to their Franchise Picks List.

StanChart and Unilever please, NatWest does not

Standard Chartered posted an 18% profit increase for the first quarter as lower provisions for bad debts offset falling income. The emerging markets-focused bank’s underlying pretax profit rose to $1.45bn (£1bn) in the three months to the end of March from $1.22bn a year earlier. Operating income fell 9% to 3.93bn as the bank’s net interest margin was squeezed by low interest rates but Standard Chartered predicted income would rise in the second half of 2021 as business momentum builds.

Unilever announced a 3bn (£2.2bn) share buyback as the consumer goods company predicted first-half sales growth near the top of its target range. Underlying sales rose 5.7% in the first quarter and turnover fell 0.9% to 12.3bn, the FTSE 100 group said in a trading update. Turnover declined because of currency movements, the company added.

Oil and gas giant Shell reported higher first quarter earnings and lifted its dividend on the back of higher commodity prices and refining margins. The company on Thursday said adjusted earnings rose to $3.2bn from $393m in the fourth quarter of 2020 and $2.8bn a year earlier. The dividend was lifted 4% to 0.1735 cents a share.

NatWest’s first-quarter operating pretax profit rose to £946m from £519m a year earlier as the bank released money set aside for bad debts early in the pandemic. Revenue dropped to £2.66bn in the three months to the end of March from £3.16bn and the bank wrote back £102m of impairment charges.

Gamblers flocked to Flutter Entertainment’s websites at the start of the year, boosting the sports betting company’s topline by a third. And the company was undaunted by the prospect of retail reopening across many of its markets as pandemic restrictions were eased. Power saw the average number of monthly players surge 36% to 7.67m, with those in the US more than doubling, up 132%.

St. James’s Place experienced an “exceptional” start to the year as investors piled their accumulated savings into longer-term investments. Activity was further boosted by tax year-end planning, the asset manager said.

Medical products supplier Smith & Nephew reinstated full year guidance after a rise in first quarter revenues driven by increased surgery volumes, acquisitions and new products. Revenue for the three months to April 3 came in at $1.26bn, up 11.5% on a reported basis and 6.2% on an underlying basis and including a 3.4% boost from foreign exchange and 1.9% from acquisitions.

Glencore said it was on track to deliver earnings at the top half of guidance on the back of rising commodities prices. The company said it expected earnings before interest and tax to be in a range of $2.2bn – $3.2bn this year as it held production targets.

Evraz reported a 1.7% fall in consolidated crude steel output quarter-on-quarter on Thursday, to 3.41 million tonnes, which it put down to unscheduled downtime of the sintering machine at ZSMK.

Market Movers

FTSE 100 (UKX) 7,012.66 0.70%
FTSE 250 (MCX) 22,489.89 0.22%
techMARK (TASX) 4,349.13 0.35%

FTSE 100 – Risers

Smith & Nephew (SN.) 1,573.00p 5.93%
Standard Chartered (STAN) 522.00p 5.71%
Unilever (ULVR) 4,218.00p 3.45%
HSBC Holdings (HSBA) 457.95p 3.29%
Smurfit Kappa Group (CDI) (SKG) 3,581.00p 2.96%
Smith (DS) (SMDS) 425.80p 2.90%
Hargreaves Lansdown (HL.) 1,670.00p 2.67%
BT Group (BT.A) 163.50p 2.28%
Scottish Mortgage Inv Trust (SMT) 1,306.00p 2.27%
St James’s Place (STJ) 1,350.00p 2.00%

FTSE 100 – Fallers

NATWEST GROUP PLC ORD 100P (NWG) 196.20p -3.59%
Relx plc (REL) 1,872.50p -2.85%
Evraz (EVR) 652.00p -1.60%
Johnson Matthey (JMAT) 3,255.00p -1.21%
British American Tobacco (BATS) 2,651.00p -1.10%
Renishaw (RSW) 6,320.00p -1.02%
Taylor Wimpey (TW.) 181.10p -1.01%
National Grid (NG.) 889.20p -0.95%
Flutter Entertainment (CDI) (FLTR) 15,645.00p -0.79%
Rentokil Initial (RTO) 505.80p -0.75%

FTSE 250 – Risers

Tullow Oil (TLW) 56.88p 14.52%
Travis Perkins (TPK) 1,527.00p 7.92%
Convatec Group (CTEC) 217.90p 4.96%
Investec (INVP) 289.90p 4.06%
Dr. Martens (DOCS) 468.00p 3.31%
Lancashire Holdings Limited (LRE) 701.00p 3.09%
C&C Group (CDI) (CCR) 296.00p 2.85%
Premier Foods (PFD) 95.90p 2.57%
Wood Group (John) (WG.) 277.10p 2.40%
Cairn Energy (CNE) 171.70p 2.26%

FTSE 250 – Fallers

FirstGroup (FGP) 73.40p -4.98%
WH Smith (SMWH) 1,816.50p -3.53%
888 Holdings (888) 435.20p -3.29%
Dixons Carphone (DC.) 142.30p -3.07%
Morgan Advanced Materials (MGAM) 299.50p -2.92%
Restaurant Group (RTN) 123.20p -2.69%
Babcock International Group (BAB) 294.90p -2.38%
Serco Group (SRP) 141.60p -2.34%
John Laing Group (JLG) 308.00p -2.28%
Aston Martin Lagonda Global Holdings (AML) 1,900.50p -2.24%

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