London open: Stocks edge up amid earnings avalanche

by | Jul 27, 2023

(Sharecast News) – London stocks edged higher in early trade on Thursday as investors mulled the latest policy announcement from the Federal Reserve and waded through an avalanche of earnings.
At 0910 BST, the FTSE 100 was up 0.2% at 7,692.61.

Steve Clayton, head of equity funds at Hargreaves Lansdown: “The US Federal Reserve raised interest rates by a further quarter point last night, to target a level of 5.25% to 5.5%, the highest level for 22 years.

“Markets took the view that this leaves US rates at or close to the top of this cycle, sending the dollar lower against other leading currencies. Speaking after the announcement, Fed chair Jay Powell would not be drawn on whether this marked the peak or not. The Fed’s next meeting is in September and Powell commented that it was certainly possible that they might raise rates again then, if the data warranted, but also certainly possible that they might not.

“Markets have called the top on numerous occasions already, only to rebase expectations higher later on. But inflation is now falling, and US rates are now significantly positive in real terms, unlike the position in the UK where inflation has proven more stubborn.”

At 1315 BST, the latest policy announcement from the European Central Bank will be in focus.

In equity markets, Centrica was sitting pretty at the top of the FTSE 100 after it posted a jump in interim profit as profits at British Gas surged amid rising energy prices.

In the six months to 30 June, adjusted operating profit rose to £2.1bn from £1.3bn in the same period a year earlier, while earnings per share rose to 25.8p from 11p. The group made a statutory operating profit of £6.5bn, versus a £1.1bn loss a year earlier.

Adjusted operating profits at British Gas Energy rocketed 889% to £969m amid changes to the energy price cap, which meant it was able to recover more costs.

Informa, Relx, Rentokil, Frasers Group, Jupiter Fund Management, Inchcape, Elementis and Mitchells & Butlers also gained after results.

On the downside, St James’s Place tumbled after the asset manager said interim profits fell amid market volatility, but still managed £3.4bn in net inflows.

Ocado slid as the online supermarket announced that Luke Jensen will step down as chief executive of Ocado Solutions. He will be replaced non-executive director by John Martin.

Barclays was in the red even as it became the second bank to post surging profits on the back of higher interest rates and lift its provisions for bad loans. The bank posted a 22% rise in pre-tax profit for the six months to June 30 to £4.5bn. Bad loan charges increased to £900m from £341m.

Mobico, Indivior and Drax also fell on results.

Market Movers

FTSE 100 (UKX) 7,692.61 0.20%
FTSE 250 (MCX) 19,306.84 0.63%
techMARK (TASX) 4,461.91 0.45%

FTSE 100 – Risers

Centrica (CNA) 130.50p 5.24%
Informa (INF) 776.20p 4.10%
Relx plc (REL) 2,633.00p 3.58%
Rentokil Initial (RTO) 658.80p 3.13%
Anglo American (AAL) 2,512.50p 2.55%
CRH (CDI) (CRH) 4,667.00p 2.41%
GSK (GSK) 1,415.80p 2.19%
Frasers Group (FRAS) 795.50p 2.12%
Airtel Africa (AAF) 111.90p 2.01%
Experian (EXPN) 3,061.00p 1.83%

FTSE 100 – Fallers

St James’s Place (STJ) 1,053.50p -10.95%
Ocado Group (OCDO) 876.80p -8.70%
Barclays (BARC) 154.12p -6.06%
SSE (SSE) 1,725.50p -4.51%
Shell (SHEL) 2,351.00p -1.90%
NATWEST GROUP (NWG) 238.00p -1.57%
Vodafone Group (VOD) 76.67p -1.11%
Sage Group (SGE) 918.80p -1.01%
RS Group (RS1) 753.20p -0.89%
BT Group (BT.A) 125.55p -0.75%

FTSE 250 – Risers

Jupiter Fund Management (JUP) 123.10p 13.88%
Inchcape (INCH) 872.00p 11.79%
Elementis (ELM) 115.00p 5.89%
Mitchells & Butlers (MAB) 225.60p 4.83%
Watches of Switzerland Group (WOSG) 736.00p 2.72%
Games Workshop Group (GAW) 11,650.00p 2.55%
IP Group (IPO) 62.50p 2.46%
Aston Martin Lagonda Global Holdings (AML) 358.60p 2.46%
ITV (ITV) 71.26p 2.44%
Spire Healthcare Group (SPI) 219.50p 2.09%

FTSE 250 – Fallers

Mobico Group (MCG) 97.95p -8.37%
Indivior (INDV) 1,752.00p -6.51%
Drax Group (DRX) 605.20p -2.36%
Bellevue Healthcare Trust (Red) (BBH) 149.00p -1.59%
Helios Towers (HTWS) 93.65p -1.42%
FirstGroup (FGP) 147.10p -1.41%
City of London Inv Trust (CTY) 404.00p -1.34%
CMC Markets (CMCX) 146.60p -1.21%
Quilter (QLT) 81.90p -0.73%
Empiric Student Property (ESP) 87.80p -0.68%

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