London’s blue-chip stocks rose and ended just shy of their highest point of Thursday, up 0.9% at 6,730 after gains by supermarkets as well building firms after the government’s nod to construction of nuclear power station Hinkley Point C.
The as-expected Bank of England’s decision to hold interest rates at a record low helped support the market.
“Today's decision may have been unanimous and there is also likely to be a majority in favour of cutting the bank rate further in the autumn - an unusually strong example of forward guidance. However, today's statement just highlights that in the short-term UK economic activity has been stronger than expected,” said Alastair George, Chief Strategist at Edison Investment Research.
Leading the ascendant march were supermarkets WM Morrison (LON:MRW) up 7.5% to 208.1p and Tesco (LON:TSCO) up 4.9% to 169.65p after encouraging retail data from Morrisons.
Interim results from the Yorkshire-based supermarket group strongly beat the market's estimates, with first half like-for-like sales excluding fuel and VAT up 1.4% thanks to second-quarter LFL sales up 2% versus a consensus forecast of 1%.
Though total turnover was down 0.4% underlying profit before tax rose 11% to £157mln, or up 34%, including the prior year's restructuring costs and around 5% ahead of the consensus forecast of £149mln.
But with Morrisons the second most shorted stock in the FTSE, markets are anxious that with 18% of its stock out on loan those shorting may get hit if the company’s fortunes continue to recover.
Investors liked the look of business intelligence, events and academic publishing company Informa's (LON:INF) agreed £1.2bn acquisition of US-based peer Penton. Informa shares ended the third from top riser on the FTSE 100, up 4.9% at 727.5p.
Hinkley Point C was the big local story with the government’s decision to give the green light to the controversial nuclear power station project giving a lift to a number of building and engineering firms.
AIM-quoted Redhall Group plc (LON:RHL) was an early gainer, closed 17.7% higher at 10.3p, as it said it believed its Booth Industries and Jordan Manufacturing businesses would both stand to benefit from the power station project, while boiler specialist Hayward Tyler PLC (LON:HAYT) rose 4.6% to 92p.
The mid-caps had a good run too. The FTSE 250 index ended up 0.7% at 17,752 and led by JRP Group plc (LON:JRP) up 18.2% to 115p after the retirement service provider, the newly merged Just Retirement and Partnership Assurance, raised its target for synergies from the deal as it delivered benefits ahead of schedule.
Among smaller stocks, the FTSE AIM 100 Index ended up 0.2% at 3810 and the FTSE AIM All-Share Index was flat at 802.
London gainers represented 34%, losers 29% and unchanged were 37%.
London’s top gainer overall was life sciences tech group TyraTech (LON:TYRU) up 25% at 2.5p announced directors had bought its stock.
London’s biggest faller was Juridica (LON:JIL) down 65% to 17p.
Midsession
London’s blue chip index shrugged off a gloomy update from high street stalwart Next to move strongly into blue numbers.
FTSE 100 added 30 to 6,703, though smaller caps were less enthused with the FTSE AIM index down a few points at 3,798.
Hinkley C was the big story with the government’s decision to give the green light to the controversial nuclear power station project giving a lift to a number of building and engineering firms.
AIM-quoted Redhall Group plc (LON:RHL) was an early gainer, firing up over 16% to 10.2p, as it said it believed its Booth Industries and Jordan Manufacturing businesses would both be likely to benefit, while boiler specialist Hayward Tyler PLC (LON:HAYT) rose 5% to 92p.
As expected the Bank of England kept rates on hold, which was taken as a sign that the economy was doing OK for now.
Nick Dixon, Investment Director at Aegon,said: “A further rate change was never really on the cards – and encouraging signals from recent trade and employment data suggest resilience in the UK economy.
Retail stocks weighed on the index, as fashion firm Next Plc (LON:NXT) laid on the gloom with a shovel.
The retailer has a habit of under-promising and over-delivering and it was at it again this morning, as pre-tax profits in the six months to July fell 1.5% to £342.1mln, which was better than the 5% fall predicted by Numis Securities.
Investors took fright, however, as serial pessimist Simon Wolfson, the company’s chief executive, said trading since July had “remained challenging and volatile”.
Next shed 5% at 4,950p, dragging Marks & Spencer PLC (LON:MKS) down 2.5% to 314p with it.
House builders were also out of favour, and with wealth manager Hargreaves Lansdown PLC (LON:HL.) down a whopping 4.1% as a result of going ex-div today, the top-share index was doing well to be on or around last night’s closing level.
Retailers of a different sort – the supermarkets – were in large part responsible for Footsie holding its ground, as Wm Morrison Supermarkets PLC (LON:MRW) climbed 8% to 209.9p as it produced further evidence of a revival.
Sector peer and Footsie index heavyweight Tesco PLC (LON:TSCO) rose 3.3% to 167.2p in sympathy, while J Sainsbury plc (LON:SBRY) advanced 2% to 238.9p.
- Morrisons recovery continues as higher prices loom
- Next PLC beats profit hopes but stays cautious on second half
Further down the food chain, the wonderfully named Powerflute Oyj (LON:POWR) was wanted after directors accepted a 90p per share private equity buy-out.
The paper and packaging company’s shares shot up by a fifth to 88.5p.
“Mind the GAP,” is an announcement familiar to passengers on the London’s underground transport system, and that is what Horizonte Minerals Plc (LON:HZM) is doing, after it acquired the GAP – otherwise known as the Glencore Araguaia Project – last month.
The shares rose to 2.25p from 2.12p overnight as the company kicked off social and environmental base line data collection at the project in Brazil, as a prelude to synchronising the permitting process with its Araguaia project next door.
Going the other way was Crawshaw Group PLC (LON:CRAW).
Footfall in the second half of the year has been “suppressed”, the company said, prompting market makers to slice 43% from the share price to 41.6p
The Footsie was treading water ahead of today’s interest rate decision from the Bank of England.
Retail stocks weighed on the index, as fashion firm Next Plc (LON:NXT) laid on the gloom with a shovel.
The retailer has a habit of under-promising and over-delivering and it was at it again this morning, as pre-tax profits in the six months to July fell 1.5% to £342.1mln, which was better than the 5% fall predicted by Numis Securities.
Investors took fright, however, as serial pessimist Simon Wolfson, the company’s chief executive, said trading since July had “remained challenging and volatile”.
Next shed 5% at 4,950p, dragging Marks & Spencer PLC (LON:MKS) down 3.8% with it.
Retail sales are due out at 9.30, which could shake up the sector further.
House builders were also out of favour, and with wealth manager Hargreaves Lansdown PLC (LON:HL.) down a whopping 4.1% as a result of going ex-div today, the top-share index was doing well to be on or around last night’s closing level.
Retailers of a different sort – the supermarkets – were in large part responsible for Footsie holding its ground, as Wm Morrison Supermarkets PLC (LON:MRW) climbed 6.9% as it produced further evidence of a revival.
Sector peer and Footsie index heavyweight Tesco PLC (LON:TSCO) rose 2.6% in sympathy, while J Sainsbury plc (LON:SBRY) advanced 2%.
Morrisons recovery continues as higher prices loom
Next PLC beats profit hopes but stays cautious on second half
Further down the food chain, the wonderfully named Powerflute Oyj (LON:POWR) was wanted after directors accepted a 90p per share private equity buy-out.
The paper and packaging company’s shares shot up by a fifth to 88.5p.
“Mind the GAP,” is an announcement familiar to passengers on the London’s underground transport system, and that is what Horizonte Minerals Plc (LON:HZM) is doing, after it acquired the GAP – otherwise known as the Glencore Araguaia Project – last month.
The shares rose to 2.25p from 2.12p overnight as the company kicked off social and environmental base line data collection at the project in Brazil, as a prelude to synchronising the permitting process with its Araguaia project next door.
After a bright start, the shares ebbed back to 2.18p but were still up 2.8% on the day.
Going the other way was Crawshaw Group PLC (LON:CRAW), after news in the trading update from the retailer stuck in the market’s craw.
Footfall in the second half of the year has been “suppressed”, the company said, prompting market makers to slice 40% from the share price.
Opening snapshot at 8.20am
The FTSE 100 opened 16 points lower this morning at 6,657.
The top winner was Morrison's (LON:MRW) up more than 5% to 204p. The supermarket's recovery was gaining momentum after reporteing a rise in first-half profit for the first time in four years and a third straight quarter of underlying sales growth.
Hargreaves Lansdown (LON:HL. was the biggest loser this morning, down 3.5% to 1,297p.
News
Morrisons recovery continues as higher prices loom
Eurasia Mining eyeing first revenues from West Kytlim this month
Preview at 7.02am
London’s FTSE 100 is expected to start Thursday on the back foot amid weak sentiment across global markets.
While 2016 has so far been a positive year for stocks, fear has never been very far away.
Presently much of the focus is on the central bankers as well as oil demand, which is something of a go-to indicator for judging economic activitiy.
“It’s hard to be optimistic about economic growth prospects when oil demand from countries like India and China appears to be declining, if this week’s IEA report on future demand prospects pans out as expected,” said Michael Hewson, analyst at CMC Markets.
“Another weak finish for US markets last night looks set to prompt a lower European open this morning, as the markets gear up for a week of central bank meetings starting today with the Swiss National Bank and Bank of England and culminating next week with the US Federal Reserve.”
Last month, the Bank of England put its cards on the table in the wake of June’s Brexit vote with its first rate cut since 2009 and an extra £70bn splurge of asset purchasing stimulus.
Worst fears surrounding the referendum result have yet to be realised, in fact markets have been positive, nevertheless, many investors are seemingly waiting for the other shoe to drop.
The Bank of England and economic statistics will continue to be closely watched.
On Wall Street last night the Dow Jones ended the trading session in the red, down 30 points or 0.18% to finish at 18,034. The S&P 500 was only a small margin lower, at 2,125 whereas the Nasdaq moved 0.36% into positive territory, closing at 5,173.
In Asia this morning, Japan’s Nikkei had fallen some 1.36% to 16,388. The Shanghai Composite had lowered by 0.68% to 3,002 while Hong Kong’s Hang Seng was on the rise, gaining around 0.65% to 23,343.
Australia’s ASX 200 added 0.25%, trading at 5,241.
In London, CFD and financial spreadbetting firm IG Markets sees the FTSE 100 lower, with the blue-chip benchmark called at 6,656 to 6,660 about an hour before Thursday’s opening deals.