London midday: Stocks edge higher as Next surges on results; Fed eyed
By Michele Maatouk
Date: Wednesday 29 Jul 2020
(Sharecast News) - London stocks were higher by midday on Wednesday, boosted by strong performances from the likes of Next and Smurfit Kappa, but gains were modest amid ongoing concerns about the Covid-19 pandemic and ahead of the Federal Reserve's latest policy announcement.
The FTSE 100 was up 0.4% at 6,153.01.
IG analyst Chris Beauchamp said that while the FTSE "has pushed valiantly into positive territory", even here "the index is merely bouncing from the lower end of its current trading range".
Meanwhile, Spreadex analyst Connor Campbell said that with US covid-19 deaths fast-approaching 150,000, and the WHO repeatedly warning that the pandemic is only accelerating globally, "good news was in short supply".
Investors were also awaiting the latest policy announcement from the Fed, due after the European close.
Danske Bank said: "We do not expect any major policy changes at this meeting, although we know the Fed is working hard on strengthening its forward guidance. Based on the minutes from the last meeting, we expect the Fed to give outcome-based forward guidance, tying the Fed Funds rate to the inflation rate at the September meeting, although Fed chair Powell hinted more discussions are needed.
"For the same reason, we do not expect big changes at this meeting. We expect the Fed to continue to express concerns about the economic recovery not least with the indication that the recovery has halted the past month or so amid Covid-19 outbreaks in Texas, California and Florida."
On home shores, market participants were mulling over the latest figures from the Bank of England, which showed that mortgage approvals rose to 40,000 in June from 9,273 in May. This was comfortably ahead of consensus expectations of 33,900 but well below the February pre-Covid level of 73,700.
Meanwhile, lending to individuals grew at a month-on-month pace of 0.1% or £1.8bn to £1,674.2bn. That followed a drop of 7.3% in April and of 3.3% in May.
In equity markets, Next was sitting pretty at the top of the FTSE 100 as it upgraded its full-year profit expectations after reporting a smaller-than-expected decline in full-price second-quarter sales, beating its own expectations and performing ahead of the best-case scenario given in its April trading statement.
Corrugated packaging company Smurfit Kappa rallied as it reinstated its final dividend despite posting a drop in first-half profit and revenue as the pandemic dented demand.
On the downside, Taylor Wimpey lost ground as the housebuilder said it swung to a loss in the first half due to disruptions caused by the coronavirus outbreak.
Barclays was also on the back foot after saying it took a £3.7bn hit in coronavirus-related charges as interim profits more than halved and it warned of headwinds continuing into 2021. Pre-tax profits fell to £1.2bn from £3bn a year earlier, with net operating income down 20% to £7.8bn.
Hip and knee replacement maker Smith & Nephew was weaker after saying it swung to a first-half loss as elective surgeries were cancelled or put off due to the pandemic.
Market Movers
FTSE 100 (UKX) 6,153.01 0.39%
FTSE 250 (MCX) 17,234.83 -0.25%
techMARK (TASX) 3,780.78 0.17%
FTSE 100 - Risers
Next (NXT) 5,584.00p 6.12%
Smurfit Kappa Group (SKG) 2,594.00p 4.51%
Burberry Group (BRBY) 1,300.50p 3.21%
Aveva Group (AVV) 4,276.00p 2.79%
ITV (ITV) 61.02p 2.49%
Polymetal International (POLY) 1,944.50p 2.32%
British Land Company (BLND) 363.20p 2.22%
Land Securities Group (LAND) 561.80p 2.18%
Compass Group (CPG) 1,103.00p 2.18%
Unilever (ULVR) 4,780.00p 1.94%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 121.45p -8.65%
Barclays (BARC) 105.16p -5.99%
Persimmon (PSN) 2,461.00p -2.96%
Barratt Developments (BDEV) 526.80p -2.62%
International Consolidated Airlines Group SA (CDI) (IAG) 185.30p -2.42%
Melrose Industries (MRO) 95.32p -2.12%
Lloyds Banking Group (LLOY) 28.66p -1.92%
Smith & Nephew (SN.) 1,599.50p -1.87%
Evraz (EVR) 305.20p -1.64%
CRH (CRH) 2,897.00p -1.60%
FTSE 250 - Risers
Rathbone Brothers (RAT) 1,686.00p 11.21%
Aston Martin Lagonda Global Holdings (AML) 52.80p 6.49%
Perpetual Income & Growth Inv Trust (PLI) 231.50p 6.19%
Wizz Air Holdings (WIZZ) 3,520.00p 3.59%
Petropavlovsk (POG) 39.55p 3.13%
Pets at Home Group (PETS) 251.00p 2.87%
Big Yellow Group (BYG) 1,012.00p 2.58%
Great Portland Estates (GPOR) 594.40p 2.55%
LXI Reit (LXI) 108.40p 2.46%
Future (FUTR) 1,404.00p 2.33%
FTSE 250 - Fallers
Cineworld Group (CINE) 37.00p -13.63%
Network International Holdings (NETW) 405.00p -10.04%
Redrow (RDW) 427.20p -7.17%
Countryside Properties (CSP) 291.20p -6.79%
Hammerson (HMSO) 62.96p -5.83%
Vistry Group (VTY) 629.50p -5.76%
Lancashire Holdings Limited (LRE) 765.00p -5.67%
Crest Nicholson Holdings (CRST) 195.70p -5.00%
Go-Ahead Group (GOG) 669.00p -4.97%
Moneysupermarket.com Group (MONY) 295.60p -3.90%
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