London midday: Stocks off lows ahead of BoE decision

by | Aug 3, 2023

(Sharecast News) – London stocks had come off their lows as investors waited on the Bank of England’s latest policy decision at noon.
Economists were divided among those anticipating a 25 basis point interest rate hike to 5.25% and those who thought it would raise by 50bp.

The latter was a possibility due to wage growth having accelerated past core CPI growth, but Michael Hewson, chief market analyst at CMC Markets UK, thought that would be a mistake.

“Such an aggressive move would be a mistake given that a lot of the pass-through effects of previous rate increases haven’t fully filtered down with some suggesting that the Bank of England should pause,” he said.

As of 1152 BST, the FTSE 100 had pared its decline to 0.77% or 58.05 points to 7,503.79.

Cable was off by 0.46% to 1.2653 alongside while the yield on the benchmark 10-year Gilt was rising by four basis points to 4.442%.

In the background, Wall Street equity futures were holding lower with Dow Jones mini futures off by 52.0 points to 35,351 and those for the S&P 500 down by 10.5 points at 4,526.75.

Asia Pacific stocks traded lower for the most part, but the Shanghai Stock Exchange’s composite index outperformed after it was reported that services sector activity in the Asian giant picked up unexpectedly last month.

Survey compiler Caixin’s services sector Purchasing Managers’ Index improved from 53.9 for June to 54.1 in July (consensus: 52.4).

For later in the session, the US Institute for Supply Management’s services PMI was due out at 1500 BST.

Also scheduled for release were weekly initial jobless claims figures in the U.S. at 1330 BST.

Wizz Air and LSE Group disappoint

Low-cost carrier Wizz Air swung to a first-quarter profit on the back of soaring demand for travel and record passenger numbers. The company on Thursday reported an operating profit of €79.9m, compared with a loss of €284.5m. Revenue climbed 53% to €1.2bn, while passenger numbers were up by a quarter to 15.3 million. However, chief executive officer, Jozsef Varadi, said he downgraded first-half seat kilometre growth to 25% versus previously guided 30% due to continued infrastructure, supply chain limitations facing the industry and engine inspections.

Rolls Royce was firing on all cylinders during the front half of 2023. For the six months ending on 30 June, Rolls Royce delivered a 31% jump in underlying revenues to reach £6.95bn. Underlying operating profits more than quintupled to £673m and Rolls Royce turned cash flow positive to the tune of £356m after an outflow of -£68m in the year earlier period. Management attributed the improvement to continued growth in its end markets, commercial optimisation and cost efficiencies.

Paper and packaging group Mondi reported a sharp fall in interim earnings due to weaker demand, customer destocking and higher input costs. Pre-tax profit for the six months to June 30 more than halved to €418m from €933m a year ago. “So far in 2023, demand and prices have declined sequentially with the exception of containerboard prices which stabilised in the later part of the half year. We saw some benefit from lower input costs which continue to ease as we progress into the third quarter of the year,” said chief executive Andrew King.

Market Movers

FTSE 100 (UKX) 7,506.48 -0.73%
FTSE 250 (MCX) 18,808.44 -0.02%
techMARK (TASX) 4,341.20 -0.81%

FTSE 100 – Risers

Admiral Group (ADM) 2,160.00p 4.96%
Rolls-Royce Holdings (RR.) 191.00p 3.86%
Entain (ENT) 1,378.00p 2.07%
JD Sports Fashion (JD.) 151.10p 1.75%
Barclays (BARC) 147.88p 0.97%
Hiscox Limited (DI) (HSX) 1,076.00p 0.84%
Phoenix Group Holdings (PHNX) 537.40p 0.83%
Aviva (AV.) 381.30p 0.63%
Next (NXT) 6,892.00p 0.58%
Legal & General Group (LGEN) 226.00p 0.58%

FTSE 100 – Fallers

Mondi (MNDI) 1,270.50p -4.87%
BT Group (BT.A) 113.85p -4.29%
Ocado Group (OCDO) 861.40p -2.67%
Smith & Nephew (SN.) 1,122.50p -2.52%
Fresnillo (FRES) 569.60p -2.13%
AstraZeneca (AZN) 10,880.00p -1.95%
Reckitt Benckiser Group (RKT) 5,656.00p -1.77%
Unilever (ULVR) 4,109.00p -1.73%
Lloyds Banking Group (LLOY) 42.56p -1.62%
St James’s Place (STJ) 885.80p -1.58%

FTSE 250 – Risers

Helios Towers (HTWS) 91.25p 8.63%
Pantheon International (PIN) 269.50p 4.46%
Direct Line Insurance Group (DLG) 152.05p 3.40%
Tritax Big Box Reit (BBOX) 139.30p 2.88%
OSB Group (OSB) 367.40p 2.80%
Vanquis Banking Group 20 (VANQ) 126.60p 2.59%
Bridgepoint Group (Reg S) (BPT) 186.10p 2.31%
Bakkavor Group (BAKK) 101.00p 2.02%
Hikma Pharmaceuticals (HIK) 2,114.00p 1.88%
Serco Group (SRP) 157.80p 1.68%

FTSE 250 – Fallers Group (MONY) 257.40p -3.52%
Jupiter Fund Management (JUP) 107.70p -3.49%
Synthomer (SYNT) 80.30p -3.02%
Aston Martin Lagonda Global Holdings (AML) 365.00p -2.93%
Baltic Classifieds Group (BCG) 194.20p -2.61%
TUI AG Reg Shs (DI) (TUI) 585.50p -2.58%
Wizz Air Holdings (WIZZ) 2,305.00p -2.41%
Mobico Group (MCG) 87.50p -2.34%
Ferrexpo (FXPO) 84.90p -2.25%
Worldwide Healthcare Trust (WWH) 299.00p -1.97%

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