London open: Stocks nudge up as Diageo, HSBC rally

by | Aug 1, 2023

(Sharecast News) – London stocks nudged higher in early trade on Tuesday as investors eyed the latest reading on the UK manufacturing sector and mulled results from the likes of BP, HSBC and Diageo.
At 0850 BST, the FTSE 100 was up 0.1% at 7,709.82 .

The S&P Global/CIPS manufacturing PMI for July is at 0930 BST.

Investors were also digesting the latest data from Nationwide, which showed that annual house prices suffered their worst fall last month since July 2009.

Prices were down 3.8% on the year following a 3.5% decline in June and now stand at £260,828.

On the month, prices fell 0.2% in July following a 0.1% increase a month earlier.

Nationwide chief economist Robert Gardner noted that the price of a typical home is now 4.5% below the August 2022 peak.

“Investors’ views about the likely path of UK interest rates have been volatile in recent months, with the projected Bank Rate peak fluctuating between 5% in mid-May and 6.5% in early July,” he said. “There has been a slight tempering of expectations in recent weeks but longer-term interest rates, which underpin mortgage pricing, remain elevated.”

He said that as a result, housing affordability remains stretched for people looking to buy a home with a mortgage.

“For example, a prospective buyer, earning the average wage and looking to buy the typical first-time buyer property with a 20% deposit, would see monthly mortgage payments account for 43% of their take home pay (assuming a 6% mortgage rate),” he said.

“This is up from 32% a year ago and well above the long-run average of 29%. Moreover, deposit requirements continue to present a high hurdle – with a 10% deposit equivalent to 55% of gross annual average income.”

In equity markets, Weir Group surged after as its first-half results were ahead of expectations and it upgraded full-year profit and revenue guidance.

Drinks company Diageo was also in the black as full-year results beat expectations.

HSBC rallied after the bank posted an increase in first-half profits as it benefited from rising interest rates, and announced a share buyback of up to $2bn.

In the first six months of the year, pre-tax profit rose to $21.7bn from $9.2bn in the same period a year earlier. This included a $2.1bn reversal of an impairment relating to the planned sale of its retail banking operations in France and a provisional gain of $1.5bn on the acquisition of Silicon Valley Bank UK.

Revenue grew by $12.3bn to $36.9bn. HSBC said this was driven by higher net interest income in all of its global businesses due to interest rate rises.

Elsewhere, BP managed gains despite reporting a 78% drop in its second-quarter attributable profits to $1.79bn.

Domino’s, Travis Perkins, and AG Barr were all up after results.

On the downside, gold and silver miner Fresnillo slumped after first-half results.

Market Movers

FTSE 100 (UKX) 7,709.82 0.14%
FTSE 250 (MCX) 19,106.66 -0.19%
techMARK (TASX) 4,424.47 -0.35%

FTSE 100 – Risers

Weir Group (WEIR) 1,911.50p 4.17%
Diageo (DGE) 3,503.00p 3.11%
HSBC Holdings (HSBA) 662.30p 2.48%
BP (BP.) 490.20p 1.49%
Centrica (CNA) 139.35p 0.94%
Rolls-Royce Holdings (RR.) 186.55p 0.92%
Shell (SHEL) 2,386.50p 0.87%
Admiral Group (ADM) 2,147.00p 0.85%
BAE Systems (BA.) 937.80p 0.69%
Standard Chartered (STAN) 752.00p 0.62%

FTSE 100 – Fallers

Fresnillo (FRES) 579.20p -6.31%
JD Sports Fashion (JD.) 154.95p -1.74%
Endeavour Mining (EDV) 1,851.00p -1.54%
Next (NXT) 6,942.00p -1.50%
Entain (ENT) 1,367.00p -1.37%
Rio Tinto (RIO) 5,084.00p -1.28%
Smurfit Kappa Group (CDI) (SKG) 3,064.00p -1.23%
Croda International (CRDA) 5,818.00p -1.22%
Experian (EXPN) 2,975.00p -1.13%
Halma (HLMA) 2,211.00p -1.12%

FTSE 250 – Risers

Domino’s Pizza Group (DOM) 369.00p 6.22%
Travis Perkins (TPK) 910.40p 4.55%
Chemring Group (CHG) 293.00p 3.35%
Barr (A.G.) (BAG) 485.00p 2.86%
Wood Group (John) (WG.) 150.80p 2.03%
Balanced Commercial Property Trust Limited (BCPT) 70.80p 1.87%
JPMorgan Indian Investment Trust (JII) 850.00p 1.67%
Me Group International (MEGP) 158.80p 1.66%
Discoverie Group (DSCV) 814.00p 1.62%
Jupiter Fund Management (JUP) 116.00p 1.49%

FTSE 250 – Fallers

Man Group (EMG) 221.70p -7.16%
Aston Martin Lagonda Global Holdings (AML) 378.00p -4.40%
Greggs (GRG) 2,646.00p -4.20%
Watches of Switzerland Group (WOSG) 722.00p -4.18%
Coats Group (COA) 67.50p -3.57%
Vesuvius (VSVS) 432.00p -2.26%
Dunelm Group (DNLM) 1,125.00p -2.17%
IWG (IWG) 149.90p -1.96%
Spectris (SXS) 3,446.00p -1.85%
Pacific Horizon Inv Trust (PHI) 578.00p -1.37%

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