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London open: Stocks gain as miners rally
London stocks rose in early trade on Thursday, albeit gains were much more muted than in the previous session, when a softer-than-expected UK inflation print saw the top-flight index enjoy its best day of the year so far.
At 0845 BST, the FTSE 100 was up 0.3%, having closed 1.8% higher on Wednesday.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the FTSE had opened higher as miners were boosted by expectations of Chinese stimulus.
“Oil prices have steadied around $79 a barrel amid expectations of lower demand in China, as investors still waiting for more detail about what further economic stimulus from Chinese authorities will look like,” she said. “The expectation that levers will be pulled to boost domestic demand across the world’s second largest economy has helped push up commodity stocks, which are among the biggest gainers on the FTSE 100 in early trade.”
Earlier, the People’s Bank of China announced that it was keeping the one-year loan prime rate unchanged at 3.5% and the five-year rate at 4.2%.
Pantheon Macroeconomics said: “This was in line with expectations, after the PBoC held the medium-term lending facility rate steady earlier this month, and the Bank has been fending off currency pressure.”
In equity markets, heavily-weighted mining stocks were the standout performers, with Anglo American, Glencore, Antofagasta and Rio Tinto all up. Anglo American was also in focus after it said that first-half production had grown 42%.
M&G advanced after saying it remained on track to meet its financial targets, despite adopting new accountancy standards.
Homeware retailer Dunelm rallied as it said full-year profit was set to be “slightly ahead” of market expectations after continued robust sales in the fourth quarter.
Premier Foods was in the black after the Mr Kipling and OXO owner said full-year trading profit was set to be at the top end of market expectations as it posted a jump in first-quarter sales.
Babcock and IG Group also gained after results.
On the downside, Ninety One, Pennon and Bytes Technology all fell as they traded without entitlement to the dividend.
Budget airline easyJet flew lower despite saying it swung to a pre-tax profit in the third quarter amid strong passenger demand, and that it expects to post record profit for the fourth quarter.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hikma Pharmaceuticals Plc | +6.58% | +128.50 | 2,080.00 |
| 2 |  |
Anglo American Plc | +5.17% | +119.00 | 2,422.00 |
| 3 |  |
Persimmon Plc | +4.31% | +51.00 | 1,233.50 |
| 4 |  |
Antofagasta Plc | +3.94% | +58.50 | 1,545.00 |
| 5 |  |
Glencore Plc | +3.32% | +15.05 | 468.50 |
| 6 |  |
Segro Plc | +3.29% | +26.20 | 821.80 |
| 7 |  |
Barratt Developments Plc | +2.91% | +13.20 | 467.20 |
| 8 |  |
Taylor Wimpey Plc | +2.84% | +3.30 | 119.60 |
| 9 |  |
Burberry Group Plc | +2.51% | +55.00 | 2,249.00 |
| 10 |  |
Rio Tinto Plc | +2.35% | +120.00 | 5,216.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | -2.59% | -12.80 | 482.10 |
| 2 |  |
Flutter Entertainment Plc | -2.07% | -325.00 | 15,370.00 |
| 3 |  |
Scottish Mortgage Investment Trust Plc | -1.55% | -11.00 | 700.80 |
| 4 |  |
Diageo Plc | -1.38% | -47.50 | 3,399.50 |
| 5 |  |
Ocado Group Plc | -0.82% | -5.60 | 678.20 |
| 6 |  |
Croda International Plc | -0.79% | -46.00 | 5,772.00 |
| 7 |  |
Tui Ag | -0.65% | -4.00 | 610.00 |
| 8 |  |
International Consolidated Airlines Group S.a. | -0.64% | -1.00 | 156.20 |
| 9 |  |
Experian Plc | -0.56% | -17.00 | 3,014.00 |
| 10 |  |
Unilever Plc | -0.54% | -22.00 | 4,063.00 |
US close: Stocks rise again despite some weaker earnings
US stocks finished on a positive note on Wednesday despite some fresh earnings reports from the likes of Goldman Sachs falling short of Wall Street estimates.
At the close, the Dow Jones Industrial Average was up 0.31% at 35,061.21 points, while the S&P 500 climbed 0.24% to 4,565.72.
The technology-heavy Nasdaq Composite eked gains of 0.03% to finish at 14,358.02 points.
On the currency front, the dollar was last down 0.08% against sterling at 77.22p, while it slipped 0.19% on the euro to 89.11 euro cents, and by 0.26% against the yen to change hands at JPY 139.28.
“Earnings season continues to deliver the good news that the Dow has been looking for,” said IG chief market analyst Chris Beauchamp.
“After living in the shadow of the Nasdaq 100, the index has soared in recent sessions thanks to good earnings from banks and others outside of the tech bubble.
“Fund managers are still underweight stocks, but a solid earnings season will drag more money back into stocks, supporting a rally over the summer and beyond.”
US housing starts decline in June, forecast remains positive for residential construction spending
On the economic front, a new report from the Department of Commerce showed US housing starts declining of 8.0% month-on-month in June, falling to an annual rate of 1.434 million, against a consensus estimate for 1.48 million.
However, the horizon did not seem gloomy for all experts analysing the housing market, with Kieran Clancy at Pantheon Macroeconomics maintaining a sanguine view on the state of residential construction spending in the coming months.
According to Clancy, the market could expect a steady rise in total residential construction spending, despite the recent dip in housing starts.
Goldman Sachs and Carvana climb, minor banking plays slip on earnings
In equities, multinational banking and financial services giant Goldman Sachs closed up 0.97%, even after it reported a significant drop in second-quarter earnings due to certain extraordinary charges.
The bank’s overall revenue, however, exceeded analysts’ predictions, while Goldman also announced a 10% increase to its quarterly dividend.
Elsewhere, used car retailer Carvana was a standout performer, skyrocketing 40.2% after it announced second-quarter sales that far exceeded expectations.
In addition to the stellar sales report, Carvana announced a debt restructuring agreement with its noteholders.
On the downside, some smaller banking firms struggled to find favour, with Interactive Brokers Group closing 4.98% lower, and United Community Banks falling 1.19%.
Both institutions fell short of expectations in their second-quarter earnings reports.
Thursday newspaper round-up: Coutts, Netflix, Tesla
The City regulator has said it has contacted the owner of Coutts bank amid a growing row over its decision to close Nigel Farage’s accounts, but told MPs that while lenders cannot discriminate against customers, it is ultimately up to firms to decide who to do business with. It came as the prime minister, the home secretary and the City minister waded in to the growing debate over the rights of lenders to shut or refuse accounts based on concerns over customers’ political views. – Guardian
Netflix added 5.9 million new subscribers in the last three months – almost three times as many as analysts expected – after clamping down on households that were sharing their passwords. The streaming giant is the first of the big tech and media companies to unveil their latest quarterly results. The figures come as strikes from writers and actors have hit the industry – the first time both unions have walked out since the 1960s. – Guardian
The billionaire co-owner of Asda has been reprimanded for stonewalling MPs after failing to answer “simple questions” on fuel price rises. Mohsin Issa was criticised for “wasting time” at the Business & Trade Committee, after repeatedly being asked why regulators had found Asda’s fuel margin targets were three times higher than in 2019. – Telegraph
Revenue at Tesla has risen to a record after the electric carmaker cut prices in an attempt to boost sales, denting profit margins. Net income at the business climbed 20 per cent to $3.15 billion in the second quarter, as total revenue jumped 47 per cent to $24.9 billion. The group, led by Elon Musk, hailed a “record quarter on many levels”, pointing to robust growth in production and deliveries. The company’s shares were down by 98 cents, or 0.3 per cent, at $290.28 in after-hours trading last night. – The Times
One of Europe’s largest operators of automated parcel lockers is paying £49.3 million to buy a 30 per cent stake in Menzies Distribution as part of a push into Britain. InPost, a Polish company listed in Amsterdam, also has agreed a three-year option to acquire the remaining 70 per cent of the Scottish logistics business. – The Times
