Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
London open: Stocks nudge up as Diageo, HSBC rally
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.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hikma Pharmaceuticals Plc | +1.91% | +40.00 | 2,129.00 |
| 2 |  |
Bt Group Plc | +1.56% | +1.90 | 123.90 |
| 3 |  |
Hsbc Holdings Plc | +1.52% | +9.80 | 656.10 |
| 4 |  |
Bp Plc | +1.42% | +6.85 | 489.85 |
| 5 |  |
Rolls-royce Holdings Plc | +1.16% | +2.15 | 187.00 |
| 6 |  |
Easyjet Plc | +1.15% | +5.20 | 457.50 |
| 7 |  |
Sainsbury (j) Plc | +1.05% | +2.90 | 280.30 |
| 8 |  |
Rightmove Plc | +1.02% | +5.80 | 576.20 |
| 9 |  |
Ocado Group Plc | +1.00% | +9.40 | 947.80 |
| 10 |  |
Direct Line Insurance Group Plc | +1.00% | +1.50 | 151.95 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | -5.89% | -36.40 | 581.80 |
| 2 |  |
Ashtead Group Plc | -2.19% | -126.00 | 5,636.00 |
| 3 |  |
Prudential Plc | -2.12% | -23.00 | 1,059.50 |
| 4 |  |
Rentokil Initial Plc | -1.76% | -11.20 | 623.80 |
| 5 |  |
Next Plc | -1.65% | -116.00 | 6,932.00 |
| 6 |  |
3i Group Plc | -1.59% | -31.50 | 1,945.50 |
| 7 |  |
St. James’s Place Plc | -1.51% | -14.20 | 925.80 |
| 8 |  |
Relx Plc | -1.49% | -39.00 | 2,581.00 |
| 9 |  |
Hargreaves Lansdown Plc | -1.48% | -12.60 | 838.80 |
| 10 |  |
Antofagasta Plc | -1.46% | -24.50 | 1,653.00 |
US close: Wall Street ends higher for a fifth consecutive month
Wall Street’s main market gauges ended the day slightly higher to cap off a fifth consecutive month of gains.
The Dow Jones Industrial Average edged up 0.28% to 35,559.53, alongside a 0.15% rise for the S&P 500 to 4,588.96.
In parallel, the Nasdaq Composite rose 0.21% to 14,346.02.
Joshua Mahony, chief market analyst at Scope Markets, said: “Earnings remain a key driver of markets as we move through the second quarter, with big hitters Apple and Amazon maintaining the tech theme this week.
“[…] With 51% of the S&P 500 having reported, this marks the halfway point for Q2 earnings season. It has been notable that those initial reports have seen the blended earnings growth rate for Q2 drop to -7.3% (vs 7% expected), despite seeing 80% of the companies outperform estimates.”
In an interview with Yahoo, Chicago Fed chief, Austan Goolsbee, said of the central bank’s next policy meeting: “There’s nothing off the table, there’s nothing specifically on the table.”
Meanwhile, Market News International reported that its Chicago factory Business Barometer inched up by 1.3 points in July to reach 42.8.
That was a tad below the consensus for a reading of 43.3.
In corporate news, New Relic shares surged 13% after it agreed to be bought by Francisco Partners and TPG in a $6.5bn deal.
Palantir spiked 11% helped by a recent upgrade out of Wedbush Morgan, Michael Hewson, chief market analyst at CMC Markets UK noted.
Nikola was another top gainer after inking a deal to sell 13 of its electric trucks to J.B.Hunt.
Tuesday newspaper round-up: Food prices, Aston Martin, WANdisco
The UK’s biggest retailers have reported the first monthly fall in shop prices for two years, as stores tried to tempt in customers with big discounts during July’s unseasonably wet weather. The British Retail Consortium (BRC) said its annual shop price inflation rate, compiled with the help of NielsenIQ, had declined to its lowest level of the year, sliding to 7.6% last month from 8.4% in June. – Guardian
The UK competition watchdog has said it will decide whether to clear or block Microsoft’s $69bn (£54bn) takeover of the video game developer Activision Blizzard by 29 August, as it gave fresh hope for the transaction by opening a new consultation on it. The Competition and Markets Authority, which had originally said in April it would block the deal to take over the owner of hit titles such as Call of Duty, World of Warcraft and Candy Crush, is seeking public contributions on whether it should clear it after a new submission from Microsoft. – Guardian
Vladimir Putin’s decision to block Ukrainian grain exports means British families will face higher food prices for longer than expected, the supermarkets trade body has warned. Inflation has been falling in recent months but prices on global food markets have shot up in the past fortnight as Russia rains missiles down on Ukrainian ports used to transport grain. – Telegraph
Aston Martin will tap investors for £210m in an effort to pay off its debt pile which is weighing on the luxury carmaker. Shareholders including Yew Tree, the investment vehicle owned by Aston Martin’s chairman Lawrence Stroll and Saudi Arabia’s Public Investment Fund have agreed to subscribe to around £115m of the share placing, with the remaining stock made available to institutional investors. – Telegraph
WANdisco has demanded that two former executives repay $832,000 in bonuses to reflect a fraud scandal that has shattered the company’s value. The data software specialist has written to David Richards, its co-founder and former chief executive, and Erik Miller, the former finance director, to request the return of bonuses paid last year. – The Times
