London open: Stocks steady amid raft of earnings, ahead of Fed

by | Jul 26, 2023

(Sharecast News) – London stocks were steady in early trade on Wednesday as investors waded through a raft of earnings and looked ahead to the latest policy announcement from the Federal Reserve.
At 0835 BST, the FTSE 100 was flat at 7,688.60.

The Fed is widely hike to raise rates by 25 basis points later.

Stephen Innes, managing partner at SPI Asset Management, said: “That’s in line with market pricing, which sees an almost 100 % chance of a hike. That would take the upper bound target range for the federal funds rate up to 5.25%-5.50%, marking its highest level since 2001. But since a hike today is almost entirely priced in, the bigger question for markets will be if the statement and the press conference signal that the September meeting is live.

“But even if July’s 25bps is the last hike in this cycle, it’s unlikely Powell will be putting down the welcome mat for markets to start thinking about rate cuts with growth still holding up and core inflation above target. Currently, the market is pricing in rate cuts just over three months forward, so the more significant risk post-FOMC is if the FOMC guidance forces these cuts to be pushed out well into 2024.”

In equity markets, Lloyds was on the back foot despite posting massive interim profits and raising its net interest margin guidance while hard-pressed savers were still looking for a decent return on their deposits.

CMC Markets analyst Michael Hewson said: “Despite this more positive outlook the shares have slipped back after profits fell short of expectations.

“This miss on profits appears to be down to an increase in provisions for non-performing loans, which came in at £419m, and a fall in Q2 NIM to 3.14% down from 3.22% in Q1.”

NatWest was under the cosh as it announced that Alison Rose has stepped down as chief executive in a high-profile row about former UKIP leader Nigel Farage.

Reckitt Benckiser – the maker of Dettol, Lysol and Nurofen, among other things – was in the red even as it posted a jump in first-half like-for-like net revenue, driven by solid performances across its portfolios.

Rio Tinto fell as the miner reported a slide in half-year profits after global commodity prices fell sharply. Miners in general were weak, with Glencore and Antofagasta also lower.

On the upside, engine maker Rolls-Royce surged as it lifted its full-year guidance after a strong first half, while British American Tobacco also rose on the back of results.

Aston Martin rallied as the luxury car maker said interim losses narrowed and maintained annual guidance as strong demand boosted revenue.

Market Movers

FTSE 100 (UKX) 7,688.60 -0.04%
FTSE 250 (MCX) 19,157.13 0.04%
techMARK (TASX) 4,458.81 0.18%

FTSE 100 – Risers

Rolls-Royce Holdings (RR.) 185.65p 21.62%
British American Tobacco (BATS) 2,699.00p 2.47%
Entain (ENT) 1,316.50p 1.35%
Centrica (CNA) 126.00p 1.08%
Imperial Brands (IMB) 1,848.50p 0.96%
International Consolidated Airlines Group SA (CDI) (IAG) 150.40p 0.91%
Next (NXT) 7,066.00p 0.89%
Melrose Industries (MRO) 522.80p 0.85%
Unite Group (UTG) 969.00p 0.73%
GSK (GSK) 1,402.60p 0.69%

FTSE 100 – Fallers

Lloyds Banking Group (LLOY) 44.86p -2.68%
NATWEST GROUP (NWG) 244.80p -2.55%
Reckitt Benckiser Group (RKT) 5,798.00p -2.42%
Glencore (GLEN) 472.10p -2.06%
Croda International (CRDA) 5,808.00p -2.06%
Rio Tinto (RIO) 5,290.00p -1.93%
Antofagasta (ANTO) 1,632.50p -1.48%
Prudential (PRU) 1,076.00p -1.19%
Burberry Group (BRBY) 2,153.00p -1.19%
Barclays (BARC) 161.84p -1.03%

FTSE 250 – Risers

Aston Martin Lagonda Global Holdings (AML) 362.00p 6.41%
Target Healthcare Reit Ltd (THRL) 77.50p 4.17%
Tyman (TYMN) 306.50p 2.85%
Babcock International Group (BAB) 399.40p 2.41%
Spectris (SXS) 3,723.00p 2.36%
Primary Health Properties (PHP) 96.45p 1.96%
Grafton Group Ut (CDI) (GFTU) 895.40p 1.91%
Fidelity China Special Situations (FCSS) 219.00p 1.86%
Wizz Air Holdings (WIZZ) 2,451.00p 1.79%
Bridgepoint Group (Reg S) (BPT) 193.80p 1.73%

FTSE 250 – Fallers

Pets at Home Group (PETS) 381.80p -2.50%
Jupiter Fund Management (JUP) 104.80p -2.42%
Grainger (GRI) 246.40p -2.38%
Essentra (ESNT) 162.20p -2.29%
Helios Towers (HTWS) 92.65p -2.16%
Dr. Martens (DOCS) 142.70p -2.06%
RHI Magnesita N.V. (DI) (RHIM) 2,824.00p -1.60%
Games Workshop Group (GAW) 11,210.00p -1.41%
Rotork (ROR) 309.40p -1.34%
Softcat (SCT) 1,480.00p -1.27%

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