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London open: Stocks nudge up ahead of Nvidia earnings
London stocks nudged higher in early trade on Wednesday following a positive close on Wall Street, as investors eyed results from US chip maker Nvidia.
At 0820 BST, the FTSE 100 was up 0.1% at 8,356.95.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Investors are to some extent in wait-and-see mood ahead of the hotly anticipated results from tech superstar Nvidia, due out later.
“The chip giant is again expected to demonstrate that it’s firing on all cylinders, with another round of blockbuster numbers expected, fuelled by accelerating demand for its AI focused computing platforms. But a lot will also be riding on the outlook and guidance from the firm, with some uncertainty swirling about just how long it will be before rapacious appetite for its products is sated.”
In equity markets, GSK gained as it said the Delaware Supreme Court would review a previous decision allowing expert evidence in the Zantac litigation – an important step in the company’s defence against claims that the drug causes cancer.
Wood Group rose as it agreed the sale of two businesses – EthosEnergy and CEC Controls – for around $165m as part of its programme to dispose of non-core businesses.
Frasers Group ticked higher after saying it had taken a 14.65% stake in Accent Group, a retail and distribution business in the performance and lifestyle market in Australia and New Zealand.
On the downside, Prudential lost ground even as it said it was on track to hit its medium-term profit targets after a solid first half, and announced an acceleration in sales momentum since the period-end.
New business profit totalled $1.47bn in the six months to 30 June, which was 8% higher than last year when excluding the effect of interest rate and other economic impacts.
While this was down from the “exceptional” growth of 47% in the last financial year, the group reiterated its target of achieving a compound annual growth rate for new business profit of 15-20% by 2027.
Precious metals miner Hochschild slumped. The company reiterated its output guidance despite operations at its newly opened Mara Rosa mine running slowly, as it swung into profit for the first half on the back of rising commodity prices, lower costs and a reduction in impairment charges.
In broker note action, Direct Line was upgraded to ‘buy’ at Citi, while B&Q owner Kingfisher was cut to ‘neutral’.
Watches of Switzerland was downgraded to ‘neutral’ by BNP Paribas Exane.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Prudential Plc | +1.69% | +11.20 | 673.60 |
| 2 |  |
Coca-cola Hbc Ag | +1.53% | +42.00 | 2,784.00 |
| 3 |  |
Gsk Plc | +1.48% | +24.00 | 1,642.00 |
| 4 |  |
Gen.acc.8se.pf | +1.43% | +2.00 | 142.00 |
| 5 |  |
Investec Plc | +1.21% | +7.00 | 584.00 |
| 6 |  |
Halma Plc | +0.95% | +24.00 | 2,562.00 |
| 7 |  |
Aviva Plc | +0.92% | +4.60 | 502.60 |
| 8 |  |
London Stock Exchange Group Plc | +0.89% | +90.00 | 10,225.00 |
| 9 |  |
Bae Systems Plc | +0.87% | +11.50 | 1,331.50 |
| 10 |  |
Ck Infrastructure Holdings Limited | +0.87% | +5.00 | 580.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Natwest Group Plc | -3.58% | -12.50 | 336.90 |
| 2 |  |
Antofagasta Plc | -3.11% | -59.50 | 1,851.00 |
| 3 |  |
Lloyds Banking Group Plc | -2.97% | -1.76 | 57.44 |
| 4 |  |
Barclays Plc | -2.87% | -6.60 | 223.60 |
| 5 |  |
Anglo American Plc | -1.67% | -38.00 | 2,241.00 |
| 6 |  |
Bhp Group Limited | -1.38% | -29.00 | 2,067.00 |
| 7 |  |
Rio Tinto Plc | -1.38% | -66.50 | 4,747.50 |
| 8 |  |
Glencore Plc | -1.30% | -5.35 | 405.15 |
| 9 |  |
Shell Plc | -1.01% | -27.50 | 2,697.50 |
| 10 |  |
Woodside Energy Group Ltd | -1.00% | -14.00 | 1,382.00 |
US close: Stocks inch higher ahead of Nvidia earnings, Dow sets another record
US stocks recovered some lost ground in afternoon trade to close marginally higher, with the Dow Jones Industrial Average eking out another record high, though gains were only modest as investors cautiously awaited the latest earnings report from semiconductor giant Nvidia.
The Dow finished just 0.02% higher at a new all-time closing high of 41,250.50, while the S&P 500 and Nasdaq both rose 0.16%. All three indices were trading in the red earlier in the session.
Stocks have been surging in recent weeks – the Dow in particular has jumped 6.4% since 7 August – on the back of rising expectations that the Federal Reserve will ease monetary policy at its next meeting in September. These projections were cemented on Friday by comments from Fed chair Jerome Powell, who indicated that the “time has come” to cut interest rates.
Investors are now trying to predict how large a rate-cut could be as well as the path for any future easing, with markets already pricing in at least a 25 basis-point reduction in the benchmark lending rate next month.
Nevertheless, Axel Rudolph, senior technical analyst at IG, said the recent rally in equity markets is “slowing down” ahead of Nvidia’s second-quarter results on Wednesday.
“With the chipmaker’s stock contributing around 5% to the S&P 500’s 18.6% year-to-date gains, its results will be closely watched by investors and will likely have a significant impact on not just the S&P 500 but also other global stock indices,” he said.
Nevertheless, helping sentiment on the market on Tuesday was economic data which showed that US consumer confidence rose to a six-month high this month. The Conference Board’s Consumer Confidence Index increased to 103.3 from an upwardly revised 101.9 in July, coming in ahead of the 100.7 consensus forecast.
Meanwhile, US home price growth continued to outpace inflation in June, according to the S&P/Case Shiller US home price index, rising 0.4% month-on-month. The report also revealed that home prices in the 20 major US metropolitan markets were up 6.5% year-on-year, cooling from May’s 6.9% increase but ahead of expectations for a reading of 6.3%.
Finally, the Richmond Federal Reserve Bank’s manufacturing index fell to -19 in August, down from -17 in July, reflecting the sharpest decline in factory activity since May 2020.
Market movers
Shares in Walgreens Boots Alliance plunged 9% after drugmakers Pfizer and Eli Lilly announced major direct-to-consumer announcements, which could hit sales for the pharmacy chain.
Pfizer launched a new platform called PfizerForAll which gives patients direct access to respiratory vaccines and migraine treatments, as well as offering telehealth solutions and an online pharmacy; while Eli Lilly said it was reducing prices for its weight-loss drug Zepbound to consumers when bought directly.
Edgar Bronfman Jr officially withdrew his bid to acquire Paramount Global on Tuesday, causing shares in the entertainment group to drop 7%. The move effectively clears the way for Skydance Media to take control of the company.
Meanwhile, US-listed shares of Chinese e-commerce giant JD.com gained, attempting a rebound after dropping sharply over recent sessions after Walmart revealed it was selling its entire $3.7 billion stake in the company. On Tuesday, JD.com unveiled a new $5bn share buyback programme, set to begin in September and extend over the next 36 months.
Wednesday newspaper round-up: Water companies, Hargreaves Lansdown, Klarna
Water companies will struggle to raise the billions of pounds needed to clear Britain’s waterways and fix its creaking infrastructure under the regulator’s plan to keep a lid on rising water bills, the industry will warn. The water sector’s trade association is expected to warn the industry regulator that its proposals to cap the steady rise in household bills by curbing water company spending may drive away the investors needed for a multibillion-pound overhaul of water infrastructure. – Guardian
British ports will be given £10.5m in state support to prepare for increased border checks this autumn, when the EU’s much-delayed entry-exit system (EES) comes into effect. The money will go to the Port of Dover, Eurotunnel’s Folkestone tunnel and St Pancras International in London, where Eurostar trains depart, to supplement investment in facilities to avoid long tailbacks at the borders. – Guardian
Britain’s power and gas suppliers have been ordered to protect their customers from falling into debt as the Government strips millions of pensioners of their winter fuel allowance. Companies will on Wednesday be warned that letting customers run into excessive arrears could put suppliers in breach of their licences to operate. – Telegraph
The co-founder of Hargreaves Lansdown has described the £5.4 billion agreed bid price for the UK’s biggest DIY investment platform as “questionable” and “not the greatest deal in the world”. Stephen Lansdown, who co-founded the business in 1981 with Peter Hargreaves, said the £11.10 per share take-private offer was nevertheless “fair” and would remove the FTSE 100 business from the limelight to enable it to focus on growth. – The Times
Klarna, the buy now, pay later lender, has cut more than 1,000 staff partly due to artificial intelligence and plans to shed almost twice that number ahead of a stock market flotation. The Stockholm-based financial technology group, which wrote off SwKr2.33 billion (£173 million) in bad loans in the first half of 2024 as more shoppers using the popular form of credit defaulted on their borrowings, said: “Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits.” – The Times
