London close: Stocks positive ahead of Fed decision

Market Close Report
15:25, 28th April 2021

(Sharecast News) - Stocks in London finished in positive territory on Wednesday, as investors held their collective breath ahead of the Federal Reserve's policy decision stateside.
The FTSE 100 ended the session up 0.27% at 6,963.67, and the FTSE 250 eked out gains of 0.03% to 22,439.82.

Sterling was in a mixed state, last trading 0.01% weaker against the dollar at $1.3911, but strengthening 0.02% on the euro to change hands at €1.1506.

"European markets have seen some decent gains today, helped by a strong performance from banks, as well as the energy sector, with Royal Dutch Shell shares rising ahead of their first quarter numbers tomorrow," said CMC Markets chief market analyst Michael Hewson.

"It's been a fairly solid day for the banking sector today with two notable standouts in the form of Deutsche Bank and Lloyds Banking Group, who both beat expectations in their latest numbers."

Hewson said UK banks had "seriously underperformed" over the last 12 months for a number of reasons, with the pandemic being one, and concerns over Brexit being another.

"With Brexit now in the rear-view mirror perhaps it is time to start looking anew at the UK banking sector."

The US central bank was not expected to change its policy settings in its announcement later in the global day, but some economists were hoping that policymakers will offer more details on how long it might be until they started shifting towards reducing bond purchases, or 'tapering'.

In equity markets, London Stock Exchange Group was up 1.02% after reporting a good first quarter, with a 4% increase in its favoured profit measure driven by growth in data and analytics and capital markets transactions.

Gross profit excluding currency fluctuations and a deferred revenue adjustment rose 4% to £1.54bn in the three months to the end of March from a year earlier as total income excluding recoveries rose 3.9% to £1.68bn, while reported gross profit fell 0.5% and reported income fell 1.2%.

Lloyds Banking Group advanced 3.51% after it reported better-than-expected first quarter profits after releasing £459m set aside for potential Covid-related bad loans, reflecting an improved economic outlook, in the last set of results for outgoing chief executive António Horta-Osório.

The bank said pre-tax profits came in at £1.9bn compared with £74m a year ago and against analysts forecasts of £1.1bn.

Results were helped by a net impairment credit of £323m in the quarter, as Lloyds released £459m previously set aside to deal with the coronavirus pandemic.

Advertising behemoth WPP leapt 4.27% after posting organic first quarter sales growth on a comparable basis of 3.1%, easily outpacing analyst estimates for a dip of 0.37%.

First quarter revenues, meanwhile, printed a tad below forecasts, coming in at £2.9bn compared to market expectations for £2.98bn.

On the downside, British American Tobacco slipped 0.63% after saying it was confident in hitting its 2021 targets, following a good start to the year for the nicotine peddler.

The company said its new categories business had strong growth in new customers, sales volumes and market share so far in 2021.

In a statement for its annual general meeting BAT said it was confident the division would achieve its target of £5bn revenue by 2025.

Reckitt lost 3.92% after reporting group like-for-like net revenue growth of 4.1% to £3.51bn in its first quarter on Wednesday, with like-for-like growth in its hygiene division standing at 28.5%.

The consumer products giant said its health operations saw a like-for-like decline of 13%, meanwhile, as its nutrition unit turned in a like-for-like decline of 7.4%.

It left its outlook for 2021 unchanged, with the board saying the company remained on track with its medium-term goals.

Homebuilder Persimmon slipped 0.1% after reporting that its year-to-date forward sales position had improved 23% year-on-year to £3.0bn, despite the impacts of the Covid-19 pandemic.

That compared to roughly £2.4bn at the same time a year ago.

The group's average selling price for homes sold to private owner-occupiers in the forward order book came to £252,000, up from £244,500 twelve months earlier, with Persimmon stating customer inquiry levels remained "encouraging" throughout the year-to-date as its average private sales rate came in "well ahead" of 2020.

Market Movers

FTSE 100 (UKX) 6,963.67 0.27%
FTSE 250 (MCX) 22,439.82 0.03%
techMARK (TASX) 4,334.01 -0.13%

FTSE 100 - Risers

WPP (WPP) 991.60p 4.27%
Lloyds Banking Group (LLOY) 45.05p 3.51%
BP (BP.) 304.50p 3.12%
Royal Dutch Shell 'A' (RDSA) 1,383.60p 1.99%
Royal Dutch Shell 'B' (RDSB) 1,317.80p 1.90%
CRH (CDI) (CRH) 3,459.00p 1.38%
Barclays (BARC) 188.96p 1.32%
Pearson (PSON) 831.20p 1.27%
NATWEST GROUP PLC ORD 100P (NWG) 203.50p 1.19%
Intermediate Capital Group (ICP) 2,099.00p 1.16%

FTSE 100 - Fallers

Fresnillo (FRES) 852.60p -4.11%
Reckitt Benckiser Group (RKT) 6,328.00p -3.92%
Aveva Group (AVV) 3,555.00p -3.79%
Sainsbury (J) (SBRY) 235.60p -2.93%
Bunzl (BNZL) 2,294.00p -2.14%
Next (NXT) 7,824.00p -1.79%
Rightmove (RMV) 613.40p -1.77%
Weir Group (WEIR) 1,943.50p -1.70%
Melrose Industries (MRO) 164.65p -1.64%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,623.00p -1.53%

FTSE 250 - Risers

Grafton Group Ut (CDI) (GFTU) 1,216.00p 11.76%
888 Holdings (888) 450.00p 4.46%
Hammerson (HMSO) 40.62p 4.15%
Virgin Money UK (VMUK) 202.40p 3.45%
Diversified Gas & Oil (DGOC) 114.40p 3.06%
Investec (INVP) 278.60p 2.99%
ITV (ITV) 119.45p 2.49%
The Renewables Infrastructure Group Limited (TRIG) 124.60p 2.47%
Wood Group (John) (WG.) 270.60p 2.46%
IMI (IMI) 1,597.00p 2.43%

FTSE 250 - Fallers

Travis Perkins (TPK) 1,415.00p -12.08%
FirstGroup (FGP) 77.15p -7.60%
Dixons Carphone (DC.) 146.80p -6.68%
Avon Rubber (AVON) 3,272.00p -4.54%
Hochschild Mining (HOC) 189.00p -4.40%
National Express Group (NEX) 303.80p -4.16%
Aston Martin Lagonda Global Holdings (AML) 1,944.00p -3.57%
Plus500 Ltd (DI) (PLUS) 1,430.50p -2.98%
NCC Group (NCC) 269.00p -2.91%
AO World (AO.) 284.60p -2.81%

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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