- FTSE 100 rises 54 points to 9,136
- UK mortgage lending and approvals rise again, says BoE
- Food inflation keeps rising
- Results out from AstraZeneca, Barclays, Entain, Games Workshop
4.45pm: FTSE 100 closes higher
The FTSE 100 finished Tuesday’s session in positive territory, adding 54 points at 9,136 amid a mixed day for healthcare names.
“AstraZeneca’s numbers have put the fight back in the FTSE 100 as investors around the world gear up for a busy 48 hours of earnings and central bank news,” IG chief market analyst Chris Beachamp commented.
“Index heavyweight AstraZeneca provided plenty of good news for UK investors on an otherwise poor day for healthcare stocks; both Novo Nordisk and United Health have come under pressure after bad news, though the former’s surge in earnings seems to suggest the market may now be too cautious on the outlook.”
Meanwhile, oil prices rose for a second day amid easing fears around a global trade war.
“Trump’s promises of sanctions on Russia if no Ukraine deal is forthcoming seem a bit far-fetched given his previous views, but the news has certainly helped beaten-down oil prices to make some reasonable short-term headway,” Beauchamp said.
2.04pm: FTSE back on front foot
The FTSE is back on the way up, moving back towards 9,150.
Entain and Barclays are helping this, up 3.4% and 2.7% now, having been in the red earlier, while all of the benchmark's top 10 largest companies are now in the green compared to only around half earlier.
Other banks are on the way up too, with Standard Chartered and NatWest also up over 2%.
Analyst Greg Johnson at Shore Capital has a note on Entain, observing that BetMGM, of which Entain owns a 50% stake, has increased full-year guidance to at least $150 million of EBITDA on the back of continued strong momentum in the second quarter.
"From an Entain perspective, we see the EBITDA uplift as equivalent to an incremental circa 3p per share to EPS.
"Importantly, we see the continued momentum as supportive of the medium-term EBITDA target of $500m (c25p per Entain share) and potentially worth circa 500p per share at that juncture".
As for Barclays, analyst Jonathan Pierce at Jefferies says: "Overall, a solid performance".
PBT the second quarter was 11% ahead of consensus, driven by a 6% beat to pre-provision profit and lower impairment.
"Some may not like the mix, but the net result is a good one and next year's >12% ROTE target looks increasingly achievable."
12.48pm: US futures in green despite United Health miss
US stock futures are pointing to a positive start later.
Those for the S&P 500 and Nasdaq 100 are up 0.2% and 0.4%, while Dow Jones futures are up 0.1%.
Yesterday was relatively quiet, with the Dow losing 65 points, the S&P gaining one and the Nasdaq gaining 70.
Stateside market analyst Kenny Polcari at Slatestone Wealth notes that the Equal Weight S&P lost 42 points while the 'Mag 7' stocks (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla) gained strongly, with the main S&P index weighted by market capitalization, meaning larger companies have a disproportionate influence on the index's performance.
"When these mega-cap stocks perform strongly, they can drive the S&P 500 higher, even if many smaller companies in the index decline," he notes, while the S&P Equal Weight Index gives each of the 500 companies an equal weighting of approximately 0.2% each and so reflects the performance of the "average" stock in the S&P.
"Yesterday, the market favored large-cap tech/growth stocks (think Mag 7), energy stocks and consumer discretionary stocks - versus the other sectors. This divergence led to the S&P 500 (heavily influenced by Mag 7) to rise while the Equal Weight index (more balanced across sectors) fell."
There were "no fireworks" over the EU/US trade deal announced on Sunday, and no major moves over the ongoing US/China talks, with Polcari getting the sense "that Trump is set to extend the time frame for those talks to continue".
This morning's news includes earnings from United Health, a Dow component, which badly missed expectations and reinstated full year guidance below what the Street was expecting.
This is one of over 30 US companies reporting today, others including Boeing, PayPal, Procter & Gamble, Spotify Technology pre-market, and Booking, MARA Holdings, Mondelez, Starbucks, Teladoc, Visa all post.
12.05pm: FTSE and European markets surging
The FTSE 100 has surged higher since making a slow start this morning and dropping yesterday.
At just under 9,150, the index is only around 10 points from its all-time high last week.
Up 0.7%, the London benchmark is lagging a bit behind other European indices, though, with the CAC and FTSE MIB up 1.5% in Paris and Milan, the DAX up 1.3% in Frankfurt, and the IBEX rising 1.15% in Madrid.
With it being a busy week for corporate earnings in the UK and US, investors have plenty of news to digest, says Russ Mould, investment director at AJ Bell.
Gains across all the major European indices, show investors are "sitting more comfortably after the US/EU trade agreement at the weekend".
Across the pond, the Vix measure of volatility sits at its lowest level since mid-February, which he says "indicates how investors are feeling much calmer after a whirlwind period on the markets".
11.33am: EU-US deal 'not ideal'
The US-EU tariff deal is "better than no-deal but this is still not ideal", says UBS capital goods analyst Andre Kukhnin.
Setting duties at 15%, compared to the 1.5% level at the end of 2024 but an effective rate of around 11% currently in operation as of this month, offers some relief by reducing uncertainty but raises concerns for European capital goods companies.
He estimates European capital goods firms have circa 5% of US costs of goods sold coming from Europe and says "we therefore see a limited risk to margins from the additional 5% rate".
There are increasing concerns about the impact on demand, though.
"While the additional price increases from new European tariffs are likely to be limited, we highlight that these layer up on top of US-China tariffs pass-through as well as global 10% and additional levies on copper (further to steel and aluminium), and hence can lead to DD [double-digit] price increases across major product categories," Kukhnin says, which would be on top of price levels already lifted by inflation in the past few years.
"We therefore continue to see a risk of at least some degree of final demand destruction."
Given such inflationary pressures, it "may remain challenging" for the Fed to lower US interest rates, he says, "as we will likely see more evidence of inflation in the coming months as normal and pre-bought stock levels are worked through", which in turn has negative implications for some industry verticals like construction.
11.17am: UK housing market analysis
The rise in UK net mortgage lending and approvals on home purchases was due to the drag from April's change in stamp duty thresholds fading further, says Matt Swannell, chief economic advisor to the EY ITEM Club.
"But housing affordability remains stretched, so further growth in activity and prices is likely to be gradual."
He adds: "Modest improvements in consumer spending are likely this year, amid tough headwinds from weaker real income growth, tighter fiscal policy, and the lagged impact of past interest rate rises."
But Peter Stimson at MPowered Mortgages highlights the falling borrowing rates highlighted in the data.
"Rather than falling away after the temporary stamp duty incentive ended in April, first-time buyer activity is proving robust thanks to changes in the mortgage market.
"The Bank of England’s data shows that the average interest rate on new mortgages has fallen for four months in a row, and this is encouraging more people to apply for a mortgage to help them buy their first home.
"Mortgages are getting cheaper, and with the supply of homes for sale at its highest level in a decade, property prices are levelling off or even falling in some areas."
This is creating a buyer’s market, he notes, with would-be buyers fed up with rising rents encouraged to "get off the fence".
"With new affordability rules making it easier for people to get their first mortgage, and allowing lenders greater flexibility in the amount they lend, the mortgage market is playing an essential role in keeping the cooling property market moving.
"With the Bank of England widely expected to reduce its base rate again next week, stress rates - the rate at which borrowers' affordability is calculated at - could go down even further, allowing even more borrowers into the market."
11.08am: Schroders builds stake in Cordiant
A recent filing from Schroders reveals the City investment house has quietly built a 5.7% stake in Cordiant Digital Infrastructure Ltd (LSE:CORD), which invests in data centres and towers.
This comes at a time when the shares have been highlighted by some analysts as trading at an unwarranted discount to net asset value.
So, this may well prove to be a savvy spot by the Schroders team.
10.46am: SSP flies lower
SSP Group plc (LSE:SSPG) shares are down 7%, the third biggest faller on the FTSE 350 after Inchcape and Paragon Banking.
Barclays analyst Richard Taylor notes that the airports and stations food concession operator saw slower like-for-like sales in the latter part of the third quarter, but sequential improvement so far in its fourth quarter, keeping the outlook unchanged.
LFLs in Q3 were 3% compared to a guidance range of 4-5% and Barclays' forecast of 4.5%.
"When the company last updated the market at the H1 results on May 20th, they reported LFL sales growth of 5% for the first 6 weeks of Q3. This implies that LFLs have slowed to c1% in the most recent 7 weeks of Q3," the analyst says, adding that reasons for the slowdown in the latter part of the quarter vary by region.
10.22am: An AIM newcomer
We have a new AIM company! First Development Resources (AIM:FDR) began trading on London’s junior market this morning after raising £2.3 million.
Aussie explorer FDR is focused on discovering copper, gold, rare earth elements, lithium, and uranium in some of the country's most promising mineral provinces.
Its flagship asset is the Wallal Project in Western Australia’s Paterson Province, an area with a strong track record for world-class gold and copper discoveries.
10am: BoE lending data
UK net mortgage lending and approvals on home purchases rose again in June, data from the Bank of England shows, up £3.1 billion to £5.3 billion, following a £2.8 billion rise to £2.2 billion in May.
Net mortgage approvals for house purchases increased by 900 to 64,200 in June. Approvals for remortgaging rose by 200 to 41,800, the highest level since October 2022 when approvals stood at 50,000.
Net unsecured lending increased in June due to a fall in repayments, with net borrowing of consumer credit up to £1.4 billion from £0.9 billion, as credit cards bounced to £0.7 billion from £0.2 billion and other borrowing remained stable.
The annual growth rate of borrowing by large businesses fell to 6.7% in June. Borrowing by small and medium-sized enterprises increased by 0.3%, up from -0.2% in May, marking the first positive growth since August 2021.
9.49am: Barclays review
The recent strength in US bank earnings was echoed somewhat in this morning's results from Barclays, which show profit and net interest income ahead of consensus estimates, says Victoria Scholar, head of investment at Interactive Investor.
Shares in the bank are still in the red, though, at 361p.
"Like its Wall Street counterparts, Barclays’ investment banking division saw income increase by 10% in the second quarter, thanks to the tariff frenzy with volatile market conditions boosting trading activity across FICC (fixed income, currencies, and commodities) and equities.
"However unlike in the US where dealmaking made a comeback, Barclays’ investment banking income suffered on the back of a slowdown in the M&A and IPO space."
In the second quarter, Barclays UK income increased by 12% thanks to the acquisition of Tesco Bank last November, as well as a boost from the 'structural hedge', which lessens the group’s susceptibility to interest rate changes.
"This should help the lender to weather the outlook for declining rates from the Bank of England. However, there will still be concerns about a deteriorating economic outlook in the UK and what that means for Barclays’ UK divisions," says Scholar.
In other key metrics, she notes a "respectable" capital cushion or CET1 ratio of 14%, up from 13.9% in the first quarter, while return on tangible equity (ROTE) was another highlight, hitting 12.3% in the second quarter ahead of expectations but down from 14% in the first quarter.
She also notes that analysts are generally upbeat towards the stock, with 13 buy recommendations, 4 holds and no sells.
"This is a much more positive outlook than for rival Lloyds, which is a consensus hold."
9.16am: Entain edges higher
Entain PLC (LSE:ENT)) shares are up 1.4% after its jointly-owned BetMGM business delivered an upgrade to its full-year guidance.
In its second-quarter and first-half update, the online gaming group reported net revenue up 36% and 35% year on year, respectively, with first-half underlying earnings (EBITDA) at $109 million, a $232 million improvement on last year.
Sports betting revenues surged 56% in the quarter, while iGaming was up 29%, reflecting successful marketing and product initiatives.
Shares in the bookmaker are up around 45% since January and 11% over the past month.
8.49am: Markets topping out?
"Are we topping out?" wonders Saxo market analyst Neil Wilson.
After a wobbly session to start the week, and a stack of fresh earnings updates, markets' early momentum yesterday has not been able to be sustained, as "the reality of the likely hit to trade and economic growth [from the EU-US tariff deal] weighed on the markets".
He flags "multiple fresh potential catalysts" this week for the market, including a Fed meeting, US inflation and labour market data, plus earnings updates from Apple, Amazon, Meta and Microsoft, which are about 20% of the S&P 500.
There is still some uncertainty over Trump’s policy manoeuvres, Wilson adds.
"Buoyed by his victories on trade deals, President Trump cut his deadline for Russia to reach a peace deal with Ukraine to less than two weeks, after which he will impose tough new 'secondary tariffs' on countries that trade with Moscow."
Oil jumped on that and has largely held onto gains this morning, with Brent down 0.1% at just under $70 a barrel.
"Meanwhile, there are talks between the US and China ahead of the 12 August deadline, and chatter about a 'world tariff' rate set at 15% by the US."
8.31am: Games Workshop tops risers
Games Workshop Group PLC (LSE:GAW) shares nearly hit an all-time high in initial trades, as the tabletop gaming group reported stronger annual profit growth than expected.
The board declared a dividend of 55p per share, too, taking total dividends declared in the year to 140p per share, up 40% on the previous year.
Profit before tax increased 29.5% to £262.8 million, well above previous guidance of £255 million, as sales grew 17.5% to £617.5 million, or 19.5% in constant currency.
8.15am: FTSE 100 edges higher
The FTSE 100 has started higher, up 13 points to 9,094 in a mixed early trading for European markets.
Games Workshop Group PLC (LSE:GAW) is top of the early leaderboard, up 2% after reporting a stronger increase in profits than expected.
AstraZeneca PLC (LSE:AZN) is up over 1% after its largely in-line interims, while Barclays PLC (LSE:BARC) is up 0.3% after results that seemed a bit better than that move suggests.
Retailers are notable on the downside, but just small falls for M&S and JD Sports.
Just over half the index's 10 largest companies are in the red, including Shell and BP, Unilever and GSK.
7.56am: Barclays results mostly better than expected
Barclays PLC (LSE:BARC) results have come with a further £1 billion share buyback as the cherry on top, as well as an interim dividend nudged 3.5% higher.
Looking at the headline numbers, net interest income, up 16% to £3.5 billion, was in line with forecasts, but a 16% fall in investment banking fees to £568 million was below the £601.7 million average City estimate. Group pre-tax profit jumped 30% to £2.48 billion, beating the consensus forecast of £2.26 billion.
Chief executive CS Venkatakrishnan said at the mid-point of his three-year plan, Barclays has achieved over half of the circa £30 billion planned UK risk weighted assets growth, half of the target income growth and realised two-thirds of the £2 billion planned gross cost efficiency savings.
Elsewhere, here's the full report on the AstraZeneca PLC (LSE:AZN) results, which also included a new acquisition of EsoBiotec, a biotechnology group focused on in vivo cell therapies, in a deal worth up to $1 billion.
7.33am: Funky Pigeon flies the nest
Card Factory (LSE:CARD) has struck a deal to buy FunkyPigeon.com from WH Smith PLC (LSE:SMWH) for £24 million.
It says that as well as the website, and established online personalised card and gifting business, the deal includes a standalone team in Bristol and Guernsey.
Funky Pigeon made an average of £32 million in revenue in the last two years and around £5 million of EBITDA.
Card Factory CEO Darcy Willson-Rymer says the acquisition "marks a significant step forward in cardfactory's strategy to build a scaled, competitive digital presence in the celebration occasions market.
"It brings a high-quality platform and proven technology, accelerating our ability to compete in the direct-to-recipient card and gifting segment, so supporting our ambition to become the leading omnichannel retailer in our sector."
7.26am: AstraZeneca earnings in line
A quick look at AstraZeneca PLC's (LSE:AZN) numbers and the bottom line is that the outlook is unchanged, with guidance reiterated for the full year.
Revenue in the second quarter of $14.46 billion is just above the consensus forecast of $14.12 billion, while core earnings per share and core operating margin at $2.17 and 32% are both bang in line with the average analyst estimate.
An interim dividend of $1.03 per share has been declared.
CEO Pascal Soriot hailed "strong momentum" in the top line through the first half of the year, while 12 positive key Phase III trial readouts in just the past few weeks keeps the pipeline flowing.
He leads by reminding of the recent pledge of $50 billion to "continue to grow in the US", including the largest manufacturing investment in AstraZeneca's history in Virginia.
7.17am: FTSE 100 called higher
The FTSE 100 is expected to bounce back a little on Tuesday on a busy day of results reporting, after a negative start to the week for most European markets.
On the futures market, the London benchmark has been called 25 points higher, reversing some of the 39 points given up the day before when the index closed down at 9,081.44.
Wall Street stocks had a mixed session overnight, with the Dow Jones dipping 0.1%, the S&P 500 just one point above flat and the Nasdaq Composite adding 0.3% thanks to gains for Nvidia and Tesla.
Asian markets are mostly in the red this morning, with both Nikkei and Hang Seng down almost 1% in Tokyo and Hong Kong, while domestic Chinese stocks and India's Sensex benchmark are both just above flat.
7.08am: FTSE 100 Live: Tuesday 29 July
AstraZeneca PLC will report second-quarter and interim results, having recently lost its crown as the largest company in the FTSE 100 due to the threat of pharmaceutical tariffs and US drug pricing reform from President Donald Trump.
However, implementation of both remains uncertain, and AZ may have helped its cause this month as it unveiled plans to invest $50 billion in the US by the end of the decade.
Barclays PLC results follow solid numbers from domestically focused rivals Lloyds and Natwest the week before.
With the largest investment banking arm among the London-listed group, Barclays is the most obvious beneficiary of positive read-across from figures earlier in the month from Wall Street banks, which reported strong trading revenues on the back of market volatility driven by changing US tariff policy.
Ladbrokes owner Entain PLC got a positive write-up from Citi ahead of the gaming group’s second-quarter results, as revenue and earnings tick steadily higher.
Announcements expected:
Trading updates: AG Barr, Entain, Paragon Banking, SSP Group
Interims: AstraZeneca, Barclays, Canal+, ConvaTec Group, Croda International, Essentra, Greggs, Inchcape, Morgan Sindall Group, Restore, Shaftesbury Capital, Staffline Group, Sthree, Unilever
Finals: Altitude Group, Games Workshop, IG Design Group, NWF Group
Overseas earnings: Boeing, PayPal, Procter & Gamble, Spotify Technology, UnitedHealth (all pre-market), Booking, MARA Holdings, Mondelez, Starbucks, Teladoc, Visa (all afterhours)
Economic announcements: BRC Shop Price Index (UK), Mortgage Approvals (UK), Consumer Credit (UK), M4 Money Supply (UK), House Price Index (US), Consumer Confidence (US)