Stocks are extending their gains even as investors wait on the Federal Reserve’s policy decision.
Helping to bolster sentiment in the meantime, overnight US technology giant Alphabet posted record quarterly profits on the back of strong ad sales, boosting its share price by 5% in pre-market trading.
The US central bank was not expected to change its policy settings, but some economists are hoping that policymakers will offer more details on just how long it might be until they start shifting towards reducing bond purchases or so-called ‘tapering’.
Investors were also biding their time ahead of a speech from US President Joe Biden to Congress in which he was expected to lay out his proposal for a $1.5trn American Families Plan of fiscal stimulus – to be paid via taxes on capita gains.
Against that backdrop, as of 1205 BST the FTSE 100 was up 0.46% or 32.25 points at 6,977.51, while the second-tier index was gaining 0.61% or 135.76 points to 22,568.59.
“Markets are waiting patiently for the latest update from the Federal Reserve today, although they could be disappointed. Despite a resurgence in jobs and inflation data, we are unlikely to see Powell lay the groundwork for any tapering in asset purchases today,” said IG chief market analyst Chris Beauchamp.
“Instead, it seems likely that he will stress the need to see sustained above-target inflation and proof of economic strength before they decide to start to reposition towards a less accommodative future.”
No major economic reports are scheduled for release in the UK.
Organisation of Petroleum Exporting Countries ministers and their counterparts from Russia and Khazhakstan adjourned Wednesday’s scheduled meeting early, after agreeing to move forward with plans to increase supplies to the oil market between May and July.
Commodity traders yawned in response, with front-dated Brent adding 0.54% to $66.78 a barrel alongside.
LSE Group reports “good” trading, Lloyds reverses credit provisions
London Stock Exchange Group said it had a good first quarter as it reported a 4% increase in its favoured profit measure driven by growth in data and analytics and capital markets transactions. Gross profit excluding currency fluctuations and a deferred revenue adjustment rose 4% to £1.54bn in the three months to the end of March from a year earlier as total income excluding recoveries rose 3.9% to £1.68bn. Reported gross profit fell 0.5% and reported income fell 1.2%. All the figures exclude the acquisition of Refinitiv in January.
Lloyds Bank reported better than expected first quarter profits after releasing £459m set aside for potential Covid-related bad loans, reflecting an improved economic outlook, in the last set of results for outgoing chief executive António Horta-Osório. The bank said pre-tax profits came in at £1.9bn compared with £74m a year ago and against analysts forecasts of £1.1bn. Results were helped by a net impairment credit of £323m in the quarter, as Lloyds released £459m previously set aside to deal with the coronavirus pandemic.
British American Tobacco said it was confident about hitting its 2021 targets after a good start to the year for the cigarette and smoking alternatives company. The FTSE 100 company said its new categories business had strong growth in new customers, sales volumes and market share so far in 2021. In a statement for its annual general meeting BAT said it was confident the division would achieve its target of £5bn revenue by 2025. Combustible tobacco products, including cigarettes, had good revenue growth with strong pricing partly offset by geographic mix as emerging markets recover from Covid-19.
Reckitt Benckiser reported group like-for-like net revenue growth of 4.1% to £3.51bn in its first quarter on Wednesday, with like-for-like growth in its hygiene division standing at 28.5%. The FTSE 100 consumer products giant said its health operations saw a like-for-like decline of 13%, meanwhile, as its nutrition unit turned in a like-for-like decline of 7.4%. It left its outlook for 2021 unchanged, with the board saying the company remained on track with its medium-term goals.
Advertising giant WPP posted organic first quarter sales growth on a comparable basis of 3.1%, easily outpacing analysts’ estimates for a dip of 0.37%. First quarter revenues on the other hand printed a tad below forecasts, coming in at £2.9bn (consensus: £2.98bn).
Homebuilder Persimmon said on Wednesday that its year-to-date forward sales position had improved 23% year-on-year to £3.0bn, despite the impacts of the Covid-19 pandemic. That compared to roughly £2.4bn at the same time a year ago. The FTSE 100-listed group’s average selling price for homes sold to private owner-occupiers in the forward order book came to £252,000, up from £244,500 twelve months earlier, with Persimmon stating customer inquiry levels remained “encouraging” throughout the year-to-date as its average private sales rate came in “well ahead” of 2020.
Market Movers
FTSE 100 (UKX) 6,978.14 0.48%
FTSE 250 (MCX) 22,558.06 0.56%
techMARK (TASX) 4,354.27 0.34%
FTSE 100 – Risers
WPP (WPP) 983.20p 3.39%
Lloyds Banking Group (LLOY) 44.95p 3.16%
BP (BP.) 302.10p 2.30%
Pearson (PSON) 833.20p 1.93%
Barratt Developments (BDEV) 783.40p 1.82%
NATWEST GROUP PLC ORD 100P (NWG) 204.70p 1.79%
Evraz (EVR) 672.20p 1.79%
Scottish Mortgage Inv Trust (SMT) 1,287.00p 1.74%
CRH (CDI) (CRH) 3,469.00p 1.52%
Kingfisher (KGF) 366.80p 1.47%
FTSE 100 – Fallers
Fresnillo (FRES) 857.20p -3.32%
Aveva Group (AVV) 3,610.00p -2.30%
Sainsbury (J) (SBRY) 236.70p -2.23%
Reckitt Benckiser Group (RKT) 6,456.00p -1.97%
Bunzl (BNZL) 2,313.00p -1.20%
Weir Group (WEIR) 1,953.00p -1.14%
Croda International (CRDA) 6,786.00p -1.14%
British Land Company (BLND) 523.40p -1.10%
Melrose Industries (MRO) 165.80p -0.96%
Ashtead Group (AHT) 4,654.00p -0.79%
FTSE 250 – Risers
Grafton Group Ut (CDI) (GFTU) 1,209.00p 11.12%
888 Holdings (888) 446.00p 3.53%
Virgin Money UK (VMUK) 202.10p 3.30%
Indivior (INDV) 147.10p 3.08%
ITV (ITV) 120.10p 3.05%
ICG Enterprise Trust (ICGT) 1,126.00p 2.74%
TUI AG Reg Shs (DI) (TUI) 445.00p 2.70%
Vistry Group (VTY) 1,268.00p 2.55%
The Renewables Infrastructure Group Limited (TRIG) 124.60p 2.47%
Spirent Communications (SPT) 257.80p 2.30%
FTSE 250 – Fallers
Travis Perkins (TPK) 1,480.00p -8.05%
Dixons Carphone (DC.) 147.30p -6.36%
Aston Martin Lagonda Global Holdings (AML) 1,968.50p -2.36%
AO World (AO.) 285.60p -2.26%
Plus500 Ltd (DI) (PLUS) 1,447.50p -2.06%
FirstGroup (FGP) 81.90p -2.03%
AJ Bell (AJB) 427.60p -1.84%
TI Fluid Systems (TIFS) 305.00p -1.77%
NCC Group (NCC) 270.50p -1.64%
Hochschild Mining (HOC) 194.80p -1.47%
