LUNCHTIME REPORT
Much like the markets, Carpetright (LON:CPR) appears to be on a roll on Tuesday as its turnaround picks up pace.
The flooring specialist reported its interims, which showed sales and profits nudged higher in the first half.
Predominantly, the increased earnings have been driven by store closures, with Carpetright shutting 31 shops during the period and opening just five new ones.
But its move to upmarket carpets and flooring has also paid off, with the firm – usually good for a deal or two – reporting strong growth in its laminates and hardwood sections.
Total like-for-like sales grew 3.7% while profits climbed 6% over the half to £7.1mln compared to the corresponding period in 2014.
Shares, which have risen 24% so far this year, were 5.5% higher at 495p.
The FTSE 100 appears likely to end its run of eight straight daily falls, with the index making triple digit gains by lunch.
London’s main market was 102 points higher, or 1.7%, to 5,976, with only four fallers.
Leading the risers was South Africa-focused life insurer Old Mutual (LON:OML), which gained around 5.8%, or 9p, to 167p.
Investors were still cheering the news that well-respected Pravin Gordhan will be South Africa's next next finance minister, the third in little more than a week.
In the US, the Federal Reserve's policy-makers start their monthly meeting today but it will not be until tomorrow that nervous investors will know if there is to be a rate hike.
The S&P 500 is heading for an opening read of around 2,035, a 13 point increase on last night's close while the Dow Jones average looks set for another triple-digit rise up to the 17,480 level, around 111 points higher that last night's close.
Back in the UK, Brent crude’s rebound has been a big factor in the FTSE100’s rise, with Shell (LON:RDSB) climbing 2.6%, or 36p, to 1,464p.
A barrel of Brent rose 1.5% to US$38.50 while the West Texas Intermediate price gained a little more than half a per cent to US$36.56.
Connor Campbell at Spreadex said: “Of course Brent crude’s own rebound has been the main catalyst for Tuesday’s super-charged gains, the current green tinge to the oil and mining stocks giving the UK index some much needed breathing room.”
Elsewhere, despite Tesco (LON:TSCO) and Morrisons (LON:MRW) making a disappointing start to the festive season, strong growth for Sainsbury’s (LON:SBRY) has sent the three higher.
A pick up in online sales also helped to bolster the supermarkets, while Fraser McKevitt, head of retail at Kantar Worldpanel said that although discounters have been popular for most of the year, consumers are more likely to do their Christmas shopping at the ‘Big Four’.
Sainsbury’s rose 4% to 246p while Tesco lifted 3.2% to 147p. Recently demoted Morrisons jumped 4.1% to 146p.
In the small cap arena, Utilitywise (LON:UTW) has secured a “favourable” change to payment terms with a second key energy supplier.
The company, which procures the best electricity, gas and water tariffs for businesses, said it will receive 75-80% of the payment upfront on extensions to existing deals. Shares jumped around 18% to 165p.
LONDON OPEN
London’s blue-chip stocks bounced back on Tuesday after falling to three-year lows to start the week.
Investors were given a reprieve from the commodity malaise, with the distraction of UK inflation figures contributing to the rebound.
UK inflation turned positive for the first time since July, moving out from negative inflation.
As analysts predicted, prices rose 0.1% annually in November, according to the latest data from the Office for National Statistics, from last month’s -0.1%.
It ends two months where the consumer prices index was negative, causing concerns that Britain was facing deflation.
The FTSE 100 Index was around 1.5%, or 90 points, higher to 5,964, with the supermarkets near the top of the index.
Despite Tesco (LON:TSCO) and Morrisons (LON:MRW) making a disappointing start to the festive season, strong growth for Sainsbury’s (LON:SBRY) has sent the three higher.
A pick up in online sales also helped to bolster the supermarkets, while Fraser McKevitt, head of retail at Kantar Worldpanel said that although discounters have been popular for most of the year, consumers are more likely to do their Christmas shopping at the ‘Big Four’.
Sainsbury’s rose 4% to 246p while Tesco lifted 3.2% to 147p. Recently demoted Morrisons jumped 4.1% to 146p.
Away from the supermarkets, Shire (LON:SHP) rose 47p to 4,136p following speculation that it was among several firms considering bids for US drug company Intercept Pharmaceuticals, which develops treatments for chronic liver diseases.
Intercept is understood to have received several approaches and has appointed investment bank JP Morgan to assess them, according to a market source.
Other potential bidders for Intercept are said to include GlaxoSmithKline (LON:GSK) of the UK and companies in Switzerland and the US.
Shire and Intercept declined to comment and GSK, whose shares lifted 10p to 1,290p, did not respond to a request for comment.
South African life insurer Old Mutual (LON:OMI) was the best performer this morning, rising 5.1% to 165p.
South Africa-focused firms continue to recover ground as President Jacob Zuma announced the well-respected Pravin Gordhan as South Africa's would be the next finance minister, his third in little more than a week.
Away from the index, engineering data software firm Aveva (LON:AVV) has failed in a bid to merge with France's Schneider Electric.
Aveva said the boards of the two companies had been unable to agree a deal and had terminated discussions by mutual consent. Shares plummeted around 36% to 1,388p.
In the small cap space, Caza Oil & Gas (LON:CAZA) has arranged a US$45mln refinancing that will clear the bulk of its debt but leave existing shareholders with under 3% of the company. Shares jumped 20% to 0.3p.
Elsewhere, cost cutting measures by Uruguay-focused Orosur Mining (LON:OMI, TSX:OMI) are paying off - as it unveiled improved operating metrics in its latest quarter. Shares climbed 17.3% to 6.6p.
*Remember, Proactive is reporting the hot market topics being discussed by traders and bankers - it is not market fact. Neither is it an invitation to trade on the information.
LONDON PRE-OPEN
Encouraged by Wall Street's strong finish to an up-and-down day, UK blue-chips are set to claw back most of yesterday's losses.
Spread betting quotes point to the FTSE 100 opening at around 5,930, versus last night's close of 5,874.
US benchmarks yesterday eventually made their mind up to travel in forward gear, with the Dow Jones average rising 103 points to 17,369, the S&P 500 climbing 10 points to 2,022 and the Nasdaq Composite firming up 19 points to 4,952.
Investors had more than half an eye on tomorrow's interest rate decision from the US Federal Reserve, and that is likely to be the case again today on both sides of the Atlantic.
Asian markets were mixed this morning with the Nikkei 225 down 317 at 18,566 in Tokyo and the Hang Seng up 20 points at 21,330 in Hong Kong.
The oil price showed signs of stabilising yesterday, but was down again this morning in screen-based trading, and is likely to be in focus again today.
“We hear all lots of guff from central bankers about how declines in energy prices are transitory yet the declines being seen right now have been going on for 18 months now. Since the last Fed meeting alone Brent oil prices have declined over 22%, while US prices have dropped over 24%, not to mention the fact that the latest US ISM manufacturing index has slipped into contraction,” writes Michael Hewson, chief market analyst at spread betters CMC Markets.
“Against this backdrop today’s US CPI [consumer prices] numbers for November are likely to act as a particularly noteworthy footnote. Expectations are for no change to the monthly number, while the year-on-year number is projected to rise from 0.2% to 0.5%, while core prices are expected to have risen to 2% from 1.9%,” Hewson noted.
On the corporate front, things continue to quiet down in the run-up to Christmas.
Carpet seller Carpetright (LON:CPR), chip designer Imagination Technologies (LON:IMG) and oil field support services provider Petrofac (LON:PFC) are the biggies scheduled to update the market.