- FTSE 100 closes 28 points higher
- Dow Jones up 150 points
- Flutter jumps after results
5.00pm: Solid end to the session
The FTSE 100 index finished solidly higher on Tuesday, rallying from some earlier torpor in the afternoon as US blue-chips made good morning progress.
At the close, the UK blue-chip index was 28.74 points, or 0.4% higher at 7,161.04, just below the day’s peak of 7,166.07 and well above the session low of 7,115.87
On Wall Street, around London’s close, the Dow Jones Industrials Average had gained 150 points, or 0.4% at 35,252, while the broader S&P 500 added 0.2%. But the tech-laden Nasdaq Composite shed 0.4%.
Joshua Mahony, senior market analyst at IG, a global leader in online trading commented: ”European markets have enjoyed a positive end to the day, with the FTSE 100 pushing into a fresh one-month high as reopening plays gain traction over growth stocks.
“That focus on value or pro-cyclical stocks has been highlighted by the declines seen in the Nasdaq, with the US 10-year yields rising to the highest level in almost a month. Fears around the Delta variant certainly remain evident, yet that caution also brings potential hesitation amongst central bankers. Amongst all the talk of tapering, we are seeing the tone in China shift in anticipation of further easing to counteract the impact of recent lockdowns.”
Mahoney added: “Gambling stocks are a big outperformer today as Flutter Entertainment earnings shone a light on the potential benefits that come with US expansion. The loosening of gambling restrictions in the US seemed to overlap with the UK clampdown on fixed-odds betting terminals. While investors have known that the stringent restrictions on in store terminals would hurt the bottom line, the size of the potential opportunity from US deregulation has been somewhat of an unknown.
“The 159% rise in US revenues at Flutter does highlight how the industry can look ahead with confidence as they seek to cast aside concerns evident over recent years.”
3.40pm: FTSE fizzling-in
To say the day is fizzling out would be to imply (incorrectly) that there has been any fizz at all on the Footsie front.
In fact, the day is showing signs of “fizzling in”, if such a thing exists, with the FTSE 100 up 24 points at 7,156 (0.3%).
The day’s best performer is software firm TP Group PLC (AIM:TPG), which has apparently been busy batting away bid approaches from Scientific Group PLC for some time.
The shares rose by a third to 5.2p as the company finally went public with the bid approaches, prompting Science Group to come out and explain it was feeling hard done by the TP board, which has refused to engage with it and entertain suggestions of a merger.
Having had enough of being ignored, Science Group went out and built a 10.2% stake in TP, paying 5p a share.
The day’s biggest faller is Shefa Gems Ltd (LSE:SEFA), which is down 38% at 0.9p after shareholders voted in favour of the company becoming a cash shell.
The company intends to change its name to "Alef Bet Advanced Technologies (2021 )", or a similar name, as approved by the Israeli Registrar of Companies .
2.55pm: US stocks open firmer
US indices have opened modestly higher ahead of the Senate vote today on the Infrastructure bill.
The Dow Jones was up 75 points (0.2%) at 35,177 and the S&P 500 was 9 points (0.2%) to the good at 4,441.
“Equity markets are looking a little flat once more, perhaps a sign of things to come in the weeks ahead,” said Craig Erlam at OANDA Europe.
“There's been a lot to take in these last few weeks; major earnings, a hawkish Fed and some knockout economic readings. Everything it seems is now pointing towards the Fed tapering its asset purchases in the coming months, with delta the only things potentially standing in its way as it spreads across the US (and many other countries).
“With tapering now so heavily priced in and an announcement in September so widely expected, it just becomes a question of whether the economy can sustain its momentum and keep Covid at bay. Which, in turn, impacts the pace it will allow the central bank to taper and the timing of the first rate hike.,” he added.
In London, the FTSE 100 remains torpid, up 8 points (0.1%) at 7,141.
2.20pm: Housebuilders heave Footsie back into profit
The Footsie remains tightly tethered to last night’s close and just about in positive territory.
London’s index of heavyweight shares was up 3 points (0.0%) at 7,136, helped by investor enthusiasm for housebuilders following results from mid-cap Bellway PLC (LSE:BWY).
Shares in Bellway are 1.4% higher after it said house price inflation continues to more than offset rising costs in the housebuilding sector.
Taylor Wimpey (LSE:TW.) PLC, Persimmon PLC (LSE:PSN) and Barratt Developments (LSE:BDEV) PLC were up 2.1%, 1.8% and 1.4% respectively in sympathy.
1.30pm: TikTok becomes world’s most downloaded app
The FTSE 100 stayed still and was down 4 points to 7,127 in the early afternoon.
TikTok is the world’s most downloaded app in 2020, digital analytics company App Annie said.
The video-led social media platform is the only one not owned by Facebook in the top five apps, after it took the first place from Facebook Messenger.
The news may not be entirely surprisingly after it gained huge popularity during the pandemic, especially among the younger generations.
Video lovers weren’t deterred when former US President Donald Trump attempted a ban on US smartphones.
12.40pm: Watches of Switzerland leads FTSE 250 higher
Retailers have reacted phlegmatically to a slight slowdown in retail sales, as reported by the British Retail Consortium (BRC).
“Retail sales continued to grow in July, although at a slower rate as the reopening of the hospitality and leisure sectors led to a dilution in consumer spending,” said Paul Martin, a retail partner at KPMG, which helps compile the data.
“Whilst the high street saw continued growth in July, with sales up 6%, unsurprisingly online sales fell back - although less than expected - by -0.4% compared to July 2020. Both women’s and men’s clothing continued their revival with strong growth in-store and online,” he added.
That does not seem to have helped Next PLC (LSE:NXT) much, as its shares are down 1.9% at 7,922p.
Helen Dickinson, the chief executive of the BRC, said July continued to see strong sales although the rate of growth has started to slow.
“The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations. Online sales remained strong, and with weddings and other social events back on for the summer calendar, formalwear and beauty all began to see notable improvement, so fashion outlets, in particular, saw a bounce back to pre-pandemic levels. As many people prepare to return to the workplace, purchase of home office equipment began to fall after a month of high sales, meanwhile other homeware, such as furniture and household appliances continued to do well,” she said.
The FTSE 100 was down a couple of points at 7,130.
The FTSE 250, however, was up 91 points (0.4%) at 23,545, with Watches of Switzerland Group PLC (LSE:WOSG) leading the way with a 5.1% hike to 1,076p after it revealed to no one’s great surprise that rich people can still afford to buy expensive watches.
“Watches of Switzerland continues to deliver, reporting this morning Q1 revenues +101.9%, with US revenues +95%. Luxury segment doing well and e-commerce sales up 16% from last year. The strong performance in the first quarter underpins robust confidence in the FY outlook,” commented Neil Wilson at Markets.com.
12.05pm: US indices expected to open mixed
US stocks look likely to remain cautious on Tuesday as investors await clues from Federal Reserve officials about plans to ease stimulus measures following stronger than expected US jobs data last Friday.
Futures for the Dow Jones Industrial Average moved around small gains and losses, while S&P 500 futures inched up less than 0.1%, and Nasdaq-100 futures edged 0.1% higher.
Separate speeches from the Fed’s Loretta Mester and Charles Evans later on Tuesday will be eyed by investors for clues on when the officials expect the central bank to begin tapering its economic support.
On commodity markets, oil prices recovered a touch after slumping Monday amid fears that the spreading coronavirus (COVID-19) Delta variant could weigh on demand. Meanwhile, gold prices gained 0.5% after a roller-coaster performance in the previous session.
Earnings are expected first thing Tuesday from the likes of Aramark, Sysco (NYSE:SYY) and Eastman Kodak, while cryptocurrency exchange Coinbase Global and software company McAfee are set to release earnings after the market close.
In after-hours trading on Monday, AMC Entertainment Holdings (NYSE:AMC) rose after it said it was planning changes to make its theatres more appealing to younger patrons, including accepting bitcoin.
In London, the FTSE 100 is 7 points lower at 7,125.
11.00am: A gentle subsidence into the red
The Footsie has slipped into negative territory thanks in part to the weakness of mining stocks and fund managers.
London’s index of leading shares was off 15 points (0.2%) at 7,117.
Fresnillo PLC (LSE:FRES), Anglo American PLC (LSE:AAL) and BHP PLC were the worst hit of the miners, shedding more than 1% each while in the fund management sector M&G PLC (LSE:MNG) was the index's worst performer with a 3.2% loss at 230.6p after its half-year results.
Sector peer abrdn was 1.8% weaker at 292.4p after its results this morning.
“abrdn’s H1 results show the company is beginning to stabilise following poor results since the merger was announced in 2017,” opined Robert Murphy, the managing director at research house Edison Group.
“Net outflows reduced to £5.6bn, a significant improvement from previous years and in lower margin assets, although gross inflows were down 6%,” he noted.
“Following the rebranding in July as well as the streamlining of the business through asset sales, abrdn is making progress in its turnaround. Looking forward, investors will want to see the company return to a net inflow position and deliver on its cost savings targets in order to navigate the global volatility of markets as the world transitions out of the pandemic,” he suggested.
9.55am: Doing The Crab
The Footsie is doing a homage to late lamented footballer Butch Wilkins, aka “The Crab”, this morning.
London’s index of leading shares is 9 points (0.1%) weaker at 7,124.
“Equity markets seem content to trade broadly sideways as investors balanced the ongoing economic recovery with potential worries about delta, inflation and tapering by the Fed,” said Neil Wilson of markets.com.
“The FTSE 100 has put in a steady shift since the Jul 19th drop but momentum is starting to ease as the index approaches the top of the range,” he added.
Paddy Power and Betfair owner Flutter Entertainment PLC (LSE:FLTR) remains the top riser, up 8.5% at 14,045p after its interims topped expectations; a bit like England in the Euro Championships (but not when Butch Wilkins was playing for England).
Corals and Ladbrokes owner Entain PLC (LSE:ENT) rose 1.5% to 1,962.5p in sympathy.
“Flutter’s US business continues to perform very strongly – benefiting both from the opening up of sports betting in new states and from the successful fantasy sports franchise FanDuel – though the latter is unlikely to be profitable for some time yet,” remarked Danni Hewson at AJ Bell.
“A potential IPO of FanDuel has been stalled for the time being given the departure of its CEO – but the strong performance may in the first half well revive the clamour for a separate listing of the business.
“Sports betting is benefiting from a return to a more normal sporting calendar after significant pandemic-linked disruption.
“The US betting market is competitive and Flutter cannot afford to rest on its laurels, the company to its credit has committed to investing in new products and further innovation.
“With MGM Resorts rumoured to be reviving its interest in Ladbrokes-owner Entain, after a failed bid at the start of 2021, there is a chance it could switch its attention to Flutter,” she added.
InterContinental Hotels Group PLC, down 2.7% at 4,607p, is the worst blue-chip performer after its interims failed to impress the market.
Laura Hoy at Hargreaves Lansdown did sound impressed, however.
“The results from IHG this morning were pleasantly positive. Although the group saw revenue decline, underlying profits showed robust growth from last year. Both China and the Americas saw demand return as restrictions were lifted, but the group was held back by its performance across Europe, where tighter controls kept many of its hotels from operating at full strength until the end of the half,” she said.
She did sound a note of caution, however.
“China seems to be a few steps ahead of the rest of the world when it comes to the pandemic. If lockdowns ramp up through the rest of the summer, it could be a bleak forecast for other regions, which would chip away at IHG’s already precarious recovery,” she concluded.
UK stocks today #2 -
Listening to the IHG CEO on BBTV - excited about growth of the business but won't pay an interim dividend. 'Still have way to go'. Still think restrictions will be in place next year, '23 = '19. Places like London, San Fran, NY more of an issue for them pic.twitter.com/57d7xAmGkQ
— Chris Bailey (@Financial_Orbit) August 10, 2021
The FTSE 100 defied early predictions to open modestly in the green – though once again volumes were down to a mid-summer trickle.
The top riser was Paddy Power owner Flutter Entertainment (LON:FLTR) whose interim results exceeded expectations. The shares jumped 4.4%, dragging with them the price of rival Entain (LON:ENT), up 1.4%.
Stock in the builder Bellway (LON:BLWY) was little moved by its trading update – one in which investors were told the group was sitting on a record forward sales book.
6.50 am: Footsie called lower
The FTSE 100 is expected to give up its modest gains from the start of the week, following mixed UK consumer spending data overnight.
London’s equity benchmark will drop around seven points at the open, according to spread-betters on the IG platform, a day after finishing 9.35 points higher at just over 7,132.
Overnight, US stocks had a mediocre session, with the Dow Jones and S&P 500 closing down 0.3% and 0.1%, while the Nasdaq recovered 0.2% of its mojo.
“A large part of the weakness in commodity prices yesterday, which saw crude oil sink to one-month lows, has been concern over rising Delta variant cases in both China and the US, acting as a brake on demand,” said market analyst Michael Hewson at CMC Markets.
“China is a particular concern given the disruption caused by recent flooding in some areas of the country, which appears to be making it difficult to contain new virus outbreaks, while US cases rose to a six month high.
“Gold and silver prices also flash crashed sharply lower before rebounding, as investors looked ahead to this week's US CPI numbers, against a backdrop of concern that the recent rise in inflationary pressures may well be more persistent, than transitory.”
On the UK data front, retail sales data from the British Retail Consortium showed that spending slowed a touch in July despite the full lifting of restrictions.
Like-for-like sales last month were up 4.7%, down from June’s 6.7% and far from the three-month average of 14.7%.
Online spending was down 0.4%, although still remains very resilient, as in-store spending rose, though not by much either.
The digital penetration rate for non-food items stood just short of 50% for July compared to 30% two years earlier.
High street footfall was continuing to grow in the first week of August, rising by 1.4% according to retail specialists Springboard.
Moreover, there was more spent at the theatre, cinema and sporting events, according to separate figures from Barclaycard.
Barclaycard said spending via its cards was up 11.6% last month compared to July 2019 as people looked to make the most of their regained freedom after the lifting of pandemic restrictions.
Spending on entertainment grew for the first time since the pandemic arrived in the UK in early 2020.
6.50am: Early Markets - Asia / Australia
Stocks in the Asia-Pacific region were mostly higher on Tuesday even as worries over a COVID-19 resurgence in China continued to weigh on investors.
China reported 143 new cases on Monday, up from 125 cases a day earlier, driven by the highly transmissible Delta variant.
The Shanghai Composite in China gained 0.40% and Hong Kong’s Hang Seng index lifted 0.67%
In Japan, the Nikkei 225 rose 0.25% while South Korea’s Kospi dipped 0.71%.
Shares in Australia lifted, with the S&P/ASX 200 trading 0.23% higher.