London close: Benchmark manages positive close ahead of Fed
Sharecast
Market Close Report
15:18, 29th July 2020

(Sharecast News) - London's benchmark finished in the green on Wednesday, boosted by strong performances from the likes of Next and Smurfit Kappa, but offset by ongoing concerns about the Covid-19 pandemic and ahead of the Federal Reserve's latest policy announcement.
The FTSE 100 ended the session up 0.036% at 6,131.46, while the FTSE 250 was 0.18% weaker at 17,247.66.

Sterling was in a mixed state, last strengthening 0.34% against the dollar to $1.2976, but trading 0.14% weaker on the euro at €1.1022.

"Rates are expected to remain on hold, and there has been a lot of speculation that Jerome Powell, the Fed chair, will hammer home the point that rates will stay ultra-low for years to come," said CMC Markets analyst David Madden of the Federal Reserve's announcement later.

"The US central bank is expected to maintain an extremely loose monetary policy in an effort to assist the economic recovery, anything less than that in terms of promises, could spark a bearish move.

"The pandemic hasn't been forgotten about, but for now the Fed is in focus. Fears of another wave of Covid-19 are doing the rounds."

Meanwhile, Spreadex analyst Connor Campbell said that with US Covid-19 deaths fast-approaching 150,000, and the World Health Organization 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.

"We do not expect any major policy changes at this meeting, although we know the Fed is working hard on strengthening its forward guidance," said analysts at Danske Bank.

"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."

Danske said that, for the same reason, it was not expecting big changes at the 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.

That 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 rose 7.68% after 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 4.75% 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 8.09% 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, losing 6.11% 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 1.81% 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) 6,131.46 0.04%
FTSE 250 (MCX) 17,247.66 -0.18%
techMARK (TASX) 3,759.33 -0.39%

FTSE 100 - Risers

Next (NXT) 5,666.00p 7.68%
Smurfit Kappa Group (SKG) 2,596.00p 4.59%
Burberry Group (BRBY) 1,307.50p 3.77%
Land Securities Group (LAND) 565.40p 2.84%
HSBC Holdings (HSBA) 362.90p 2.73%
JD Sports Fashion (JD.) 621.20p 2.68%
Aveva Group (AVV) 4,263.00p 2.48%
ITV (ITV) 60.96p 2.38%
Homeserve (HSV) 1,362.00p 2.33%
Associated British Foods (ABF) 1,873.50p 2.27%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 124.20p -6.58%
Barclays (BARC) 105.16p -5.99%
Rolls-Royce Holdings (RR.) 253.10p -3.62%
Evraz (EVR) 299.80p -3.38%
Melrose Industries (MRO) 94.14p -3.33%
GlaxoSmithKline (GSK) 1,553.80p -3.17%
Lloyds Banking Group (LLOY) 28.37p -2.93%
International Consolidated Airlines Group SA (CDI) (IAG) 184.60p -2.79%
Informa (INF) 387.70p -2.59%
NATWEST GROUP PLC ORD 100P (NWG) 111.50p -2.45%

FTSE 250 - Risers

Hastings Group Holdings (HSTG) 200.60p 18.00%
Aston Martin Lagonda Global Holdings (AML) 56.00p 12.95%
Rathbone Brothers (RAT) 1,672.00p 10.29%
Perpetual Income & Growth Inv Trust (PLI) 230.00p 5.50%
Petropavlovsk (POG) 39.80p 3.78%
Wetherspoon (J.D.) (JDW) 863.50p 3.66%
Wizz Air Holdings (WIZZ) 3,510.00p 3.30%
Primary Health Properties (PHP) 155.20p 3.05%
Pets at Home Group (PETS) 251.40p 3.03%
GCP Student Living (DIGS) 125.00p 2.97%

FTSE 250 - Fallers

Network International Holdings (NETW) 403.20p -10.44%
Countryside Properties (CSP) 292.00p -6.53%
Go-Ahead Group (GOG) 659.00p -6.39%
Vivo Energy (VVO) 71.00p -5.33%
Moneysupermarket.com Group (MONY) 292.40p -4.94%
Lancashire Holdings Limited (LRE) 772.00p -4.81%
Vistry Group (VTY) 638.50p -4.42%
Cineworld Group (CINE) 40.97p -4.37%
Redrow (RDW) 440.60p -4.26%
AO World (AO.) 162.80p -4.24%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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