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London open: FTSE gains on positive Asian cues; Euromoney surges on takeover
London’s equity markets rose in early trade on Monday, with energy shares pacing the advance.
At 0830 BST, the FTSE 100 was up 1.2% at 7,247.37.
Victoria Scholar, head of investment at Interactive Investor, said: “European markets are pushing higher to start the week, taking their cues from a positive session in Asia with most stocks on the FTSE 100 trading in the green. Oil and mining company are outperforming the UK index while GSK is struggling after the demerger of its consumer health business, Haleon.
“Oil prices are trading higher, attempting to reverse course after last week’s sharp declines. Crude suffered its biggest weekly drop in a month amid fears of a global recession and softer demand. A weaker US dollar combined with risk-on sentiment which is lifting global equities are also supporting more bullish price action to start the week for oil with WTI and Brent crude straddling the psychological $100 a barrel level.”
In equity markets, oil giants Shell and BP gushed higher as oil prices rose.
Euromoney surged after agreeing to be bought by a private equity consortium led by France’s Astorg Asset Management for £1.6bn. The consortium, which also comprises London-based Epiris, will pay 1,461p per share in cash.
On the downside, Direct Line tumbled as the insurer cut its full-year profits outlook after a spike in motor claims inflation and market volatility. The company revised its combined operating ratio target range to 96% to 98% from a previous 93% to 95% outlined in May. A ratio closer to 100% indicates reduced profitability.
Peer Admiral was also under the cosh. It didn’t help that both stocks were downgraded by Jefferies.
Deliveroo suffered heavy losses as it downgraded its full-year revenue guidance, highlighting “consumer headwinds” amid the cost-of-living crisis. Based on the GTV seen in the second quarter and a more cautious economic outlook, the company now forecasts full-year GTV growth of between 4% and 12% at constant currency, down from previous guidance of 15% to 25%.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | +4.34% | +43.10 | 1,035.50 |
| 2 |  |
Ocado Group Plc | +3.63% | +27.60 | 787.00 |
| 3 |  |
Anglo American Plc | +3.61% | +92.00 | 2,642.00 |
| 4 |  |
Shell Plc | +3.46% | +68.90 | 2,058.50 |
| 5 |  |
Glencore Plc | +3.42% | +13.90 | 420.75 |
| 6 |  |
Burberry Group Plc | +3.34% | +53.00 | 1,639.50 |
| 7 |  |
Rio Tinto Plc | +3.30% | +151.00 | 4,730.00 |
| 8 |  |
Bp Plc | +3.30% | +12.30 | 385.40 |
| 9 |  |
Scottish Mortgage Investment Trust Plc | +3.22% | +25.20 | 807.20 |
| 10 |  |
Carnival Plc | +3.12% | +21.00 | 694.40 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | -18.65% | -320.60 | 1,398.60 |
| 2 |  |
Direct Line Insurance Group Plc | -13.12% | -28.40 | 188.00 |
| 3 |  |
Admiral Group Plc | -6.88% | -129.50 | 1,752.50 |
| 4 |  |
Halma Plc | -1.09% | -23.00 | 2,090.00 |
| 5 |  |
Aviva Plc | -0.76% | -3.00 | 393.60 |
| 6 |  |
Segro Plc | -0.58% | -6.00 | 1,022.50 |
| 7 |  |
Compass Group Plc | -0.30% | -5.50 | 1,839.50 |
| 8 |  |
Relx Plc | -0.17% | -4.00 | 2,307.00 |
| 9 |  |
Spirax-sarco Engineering Plc | -0.14% | -15.00 | 10,760.00 |
| 10 |  |
Unilever Plc | -0.05% | -2.00 | 3,906.00 |
US close: Major indices trade higher following bank earnings
Wall Street stocks closed higher on Friday as market participants digested more bank earnings.
At the close, the Dow Jones Industrial Average was up 2.15% at 31,288.26, while the S&P 500 was 1.92% firmer at 3,863.16 and the Nasdaq Composite saw out the session 1.79% stronger at 11,452.42.
The Dow closed 658.09 points higher on Friday, easily reclaiming losses recorded in the previous session.
Earnings were in focus again on Friday, with results on tap from a number of the nation’s biggest banks.
BlackRock reported a larger-than-expected drop in quarterly profits as fee income shrank throughout the period, while Bank of New York Mellon posted quarterly revenues of $4.3bn, beating estimates by $130.0m, and an earnings per share miss of $1.03.
Wells Fargo delivered a second-quarter net income of $3.1bn, down from $6.04bn a year earlier, on $17.02bn in revenue, down from $20.27bn at the same time twelve months prior, while US Bancorp reported a net income of $1.5bn and record net revenue of $6.0bn.
Citigroup topped estimates with its earnings as the bank benefitted from rising interest rates throughout the quarter.
Outside of the banks, United Health raised full-year profit forecasts for a second straight quarter on the back of strong sales at its Optum healthcare services unit.
On the macro front, retail sales jumped 1% month-on-month in June, according to the Census Bureau, ahead of forecasts for a print of 0.8% and recovering from a downwardly revised 0.1% decline in May.
Elsewhere, US industrial production increased 4.20% year-on-year in June, the smallest annual gain since January, according to the Federal Reserve, following a downwardly revised 4.8% rise in May.
Still on data, business inventories rose 1.4% month-on-month in May, according to the Census Bureau, accelerating from an upwardly revised 1.3% gain in April and slightly above market expectations for a print of 1.3%.
Finally, a preliminary reading of the University of Michigan‘s consumer sentiment index increased to 51.1 in July, up from a record low of 50 in June to beat market forecasts of 49.9.
Monday newspaper round-up: Gambling, Amazon Fresh, business loans
Loot boxes in video games will not be banned in the UK, despite a government consultation finding evidence of a “consistent” association between the features and problem gambling. Loot boxes have attracted comparison with gambling because they allow players to spend money to unlock in-game rewards, such as special characters, weapons or outfits, without knowing what they will get. – Guardian
Amazon’s grocery arm is to take on Tesco with a new price match promise as it becomes the latest retail giant to pledge it will keep prices low for customers amid the cost of living crisis. Amazon Fresh will start its Tesco Clubcard Price Match campaign on Monday, matching and freezing hundreds of prices in line with discounts by the supermarket giant. – Guardian
A new £6bn business loan scheme is to be given the green light by ministers within days, providing firms more cheap debt to survive the looming downturn. Whitehall sources said a longer-term successor to the Recovery Loan Scheme (RLS) is expected to be signed off by the Treasury and the business department this week after the unveiling of the new state-backed lifelines was hampered by delays. – Telegraph
More people are cancelling their video subscriptions to save money in the face of the cost of living squeeze, with under-24s most likely to walk away. In the second quarter of the year, almost 1.66 million services were dropped from the likes of Netflix, Now and Disney in the UK and more than a third of these were directly attributable to people tightening their belts. Half a million households cancelled all their subscriptions, according to Kantar, the market researcher. – The Times
The architect of a failed plan to sell one of Britain’s oldest mutual insurers to an American private equity firm is to leave the company. Mark Hartigan, chief executive of LV=, will go in the autumn in a departure orchestrated by his board colleagues, Sky News first reported. The announcement could come as early as today, though it is not clear whether Hartigan will receive a pay-off. – The Times
