London midday: Stocks pare gains ahead of US bank earnings

by | Jul 13, 2021

London stocks had pared gains by midday on Tuesday as caution crept in ahead of the start of US earnings season, with big names such as Goldman Sachs and JPMorgan slated to report.
The FTSE 100 was up just 0.1% at 7,130.73, having kicked off the session a little higher after the Bank of England announced that it was removing restrictions on bank dividend payouts introduced in the wake of the Covid-19 pandemic as the sector remains “well-capitalised” and “resilient”.

Banking stocks got an early boost but by midday the gains were less pronounced.

AJ Bell financial analyst Danni Hewson said: “Today’s news may feed expectations that the likes of Lloyds, Barclays and NatWest can emulate the recent actions of their American cousins and sanction super-sized shareholder returns by releasing excess capital build up through the course of the coronavirus crisis.

“However, some protections are being kept in place to ensure banks still have extra capital put by just in case and, in order not to make regulators twitchy, the sector may be wary of going too far, too fast on capital returns.

“We’ll find out very soon just how generous UK banks are prepared to be, with first half results season commencing at the end of July. The guardrails may have been removed, but the Bank of England will be expecting companies to act responsibly.”

In the US, earnings are due later in the day from JPMorgan and Goldman Sachs, while Citi, Bank of America and Wells Fargo report on Wednesday, and Morgan Stanley on Thursday.

IG market analyst Chris Beauchamp said: “After a strong Q1 the sector has some impressive hurdles to scale, but again earnings are moving in a positive way.

“As a look at the US economy, bank earnings are vital for providing further insight, and one that provides a welcome diversion from the endless focus on inflation. Bank stocks on Wall Street have also come off recent highs, but seem primed for a bounce if earnings can paint the right kind of picture.”

Elsewhere, precious metals miner Fresnillo shone as gold prices rose, while British Land gained after it said rent collection was improving and activity at its retail parks was close to pre-pandemic levels as lockdown restrictions were eased.

Redde Northgate rose after the commercial vehicle hire business said it had bought Charged Electric Vehicles (ChargedEV), a charging equipment supply and installation specialist, for an undisclosed sum.

Howden Joinery was up after it said trading was strong in the first half and ahead of its expectations, with revenue ahead of the same period in 2020 and 2019.

Dr Martens was boosted by an upgrade to ‘buy’ from ‘neutral’ at Goldman Sachs.

Market Movers

FTSE 100 (UKX) 7,130.73 0.07%
FTSE 250 (MCX) 22,941.94 0.20%
techMARK (TASX) 4,471.91 0.00%

FTSE 100 – Risers

Fresnillo (FRES) 810.80p 2.58%
DCC (CDI) (DCC) 5,986.00p 1.35%
Ashtead Group (AHT) 5,668.00p 1.21%
Intermediate Capital Group (ICP) 2,195.00p 1.20%
Anglo American (AAL) 2,989.50p 1.17%
Scottish Mortgage Inv Trust (SMT) 1,333.50p 1.10%
Lloyds Banking Group (LLOY) 47.68p 1.08%
Weir Group (WEIR) 1,901.50p 1.06%
Johnson Matthey (JMAT) 3,176.00p 0.92%
Spirax-Sarco Engineering (SPX) 14,240.00p 0.92%

FTSE 100 – Fallers

Reckitt Benckiser Group (RKT) 6,394.00p -1.46%
Compass Group (CPG) 1,464.50p -1.45%
London Stock Exchange Group (LSEG) 7,846.00p -1.21%
Whitbread (WTB) 3,004.00p -1.12%
Aveva Group (AVV) 3,912.00p -1.04%
Smurfit Kappa Group (CDI) (SKG) 3,949.00p -0.90%
AstraZeneca (AZN) 8,686.00p -0.87%
Hikma Pharmaceuticals (HIK) 2,594.00p -0.84%
Aviva (AV.) 398.90p -0.72%
Ocado Group (OCDO) 1,925.50p -0.70%

FTSE 250 – Risers

Trustpilot Group (TRST) 363.20p 4.55%
Redde Northgate (REDD) 442.50p 3.39%
Howden Joinery Group (HWDN) 877.60p 2.98%
Tyman (TYMN) 459.00p 2.91%
Watches of Switzerland Group (WOSG) 937.00p 2.63%
Dr. Martens (DOCS) 457.20p 2.51%
Tullow Oil (TLW) 53.60p 2.13%
Vesuvius (VSVS) 548.00p 2.05%
Wickes Group (WIX) 251.80p 1.86%
Spirent Communications (SPT) 265.60p 1.84%

FTSE 250 – Fallers

Cineworld Group (CINE) 70.50p -4.08%
CLS Holdings (CLI) 253.00p -3.07%
Micro Focus International (MCRO) 422.50p -2.09%
Hilton Food Group (HFG) 1,094.00p -1.97%
Bytes Technology Group (BYIT) 438.00p -1.97%
Crest Nicholson Holdings (CRST) 411.40p -1.91%
Workspace Group (WKP) 854.00p -1.90%
Restaurant Group (RTN) 116.60p -1.85%
C&C Group (CDI) (CCR) 223.80p -1.84%
Aston Martin Lagonda Global Holdings (AML) 1,896.50p -1.53%

Related articles

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!

x