London open: FTSE tops 7,000 led by StanChart and Unilever

Opening Market Report
06:52, 29th April 2021

(Sharecast News) - London shares are moving higher again after the US central bank signaled overnight that it was simply not yet time to be talking about tapering bond purchases and much less about interest rate hikes.

A raft of updates including from StanChart, Unilever and St.James Place were also buoying sentiment.

Key to the Federal Reserve's thinking were the still approximately more than 8.0 American left unemployed by the pandemic, although Fed chair Jerome Powell did concede that certain areas of the markets were frothy.

"Investors moved back into the global recovery trade overnight as the Federal Reserve stayed "on message" and was suitably dovish at its latest FOMC meeting," said Jeffrey Halley, Senior Market Analyst, Asia Pacific, OANDA.

As of 0836 BST, the Footsie was up by 0.58% or 41.25 points to 7,004.92, alongside a 0.17% or 37.90 point rise on the second-tier index to 22,478.1.

In parallel, futures on the S&P 500 were up 25.0 points at 4,201.25, boosted by gains in after hours trading in New York for Apple and Facebook shares.

As other market watchers, Interactive Investors's Head of Equity strategy, Lee Wild, singled out Apple, which as he explained "crushed" consensus forecasts for the first quarter thanks to record sales growth in all geographies.

To take note of, US 10-year Treasury bond yields were little changed at 1.61%.

No economic reports are scheduled for release in the UK.

Stateside, investors' focus will be on a preliminary reading on US first quarter gross domestic product due out at 1330 BST.

The median forecast from economists is for an acceleration in US economic growth from a 4.3% pace in the last quarter of 2020 to 6.5% in the three months to 31 March.

On the broker recommendations front, analysts at Jefferies added buy-rated Anglo American (target price: 4,000.0p) to their Franchise Picks List.

StanChart and Unilever please, not so NatWest

Standard Chartered posted an 18% profit increase for the first quarter as lower provisions for bad debts offset falling income. The emerging markets-focused bank's underlying pretax profit rose to $1.45bn (£1bn) in the three months to the end of March from $1.22bn a year earlier. Operating income fell 9% to €3.93bn as the bank's net interest margin was squeezed by low interest rates but Standard Chartered predicted income would rise in the second half of 2021 as business momentum builds.

Unilever announced a €3bn (£2.2bn) share buyback as the consumer goods company predicted first-half sales growth near the top of its target range. Underlying sales rose 5.7% in the first quarter and turnover fell 0.9% to €12.3bn, the FTSE 100 group said in a trading update. Turnover declined because of currency movements, the company added.

Oil and gas giant Shell reported higher first quarter earnings and lifted its dividend on the back of higher commodity prices and refining margins. The company on Thursday said adjusted earnings rose to $3.2bn from $393m in the fourth quarter of 2020 and $2.8bn a year earlier. The dividend was lifted 4% to 0.1735 cents a share.

NatWest's first-quarter operating pretax profit rose to £946m from £519m a year earlier as the bank released money set aside for bad debts early in the pandemic. Revenue dropped to £2.66bn in the three months to the end of March from £3.16bn and the bank wrote back £102m of impairment charges.

Gamblers flocked to Flutter Entertainment's websites at the start of the year, boosting the sports betting company's topline by a third. And the company was undaunted by the prospect of retail reopening across many of its markets as pandemic restrictions were eased. Power saw the average number of monthly players surge 36% to 7.67m, with those in the US more than doubling, up 132%.

St. James Place experienced an "exceptional" start to the year as investors piled their accumulated savings into longer-term investments. Activity was further boosted by tax year-end planning, the asset manager said.

Medical products supplier Smith & Nephew reinstated full year guidance after a rise in first quarter revenues driven by increased surgery volumes, acquisitions and new products. Revenue for the three months to April 3 came in at $1.26bn, up 11.5% on a reported basis and 6.2% on an underlying basis and including a 3.4% boost from foreign exchange and 1.9% from acquisitions.

Glencore said it was on track to deliver earnings at the top half of guidance on the back of rising commodities prices. The company said it expected earnings before interest and tax to be in a range of $2.2bn - $3.2bn this year as it held production targets.

Evraz reported a 1.7% fall in consolidated crude steel output quarter-on-quarter on Thursday, to 3.41 million tonnes, which it put down to unscheduled downtime of the sintering machine at ZSMK.

Market Movers

FTSE 100 (UKX) 7,003.03 0.57%
FTSE 250 (MCX) 22,477.29 0.17%
techMARK (TASX) 4,343.16 0.21%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,570.50p 5.76%
Unilever (ULVR) 4,207.50p 3.19%
Standard Chartered (STAN) 508.40p 2.96%
St James's Place (STJ) 1,351.50p 2.12%
InterContinental Hotels Group (IHG) 5,312.00p 1.80%
BT Group (BT.A) 162.65p 1.75%
Weir Group (WEIR) 1,973.00p 1.60%
Hikma Pharmaceuticals (HIK) 2,362.00p 1.59%
Polymetal International (POLY) 1,559.50p 1.50%
Aveva Group (AVV) 3,608.00p 1.49%

FTSE 100 - Fallers

NATWEST GROUP PLC ORD 100P (NWG) 195.75p -3.81%
Relx plc (REL) 1,889.00p -2.00%
London Stock Exchange Group (LSEG) 7,446.00p -1.43%
Evraz (EVR) 657.40p -0.78%
CRH (CDI) (CRH) 3,438.00p -0.75%
Renishaw (RSW) 6,340.00p -0.70%
British American Tobacco (BATS) 2,665.00p -0.58%
Rentokil Initial (RTO) 506.80p -0.55%
Rightmove (RMV) 608.60p -0.52%
Barratt Developments (BDEV) 769.80p -0.47%

FTSE 250 - Risers

Travis Perkins (TPK) 1,545.20p 9.20%
Tullow Oil (TLW) 52.20p 5.09%
Convatec Group (CTEC) 215.40p 3.76%
Lancashire Holdings Limited (LRE) 699.50p 2.87%
TUI AG Reg Shs (DI) (TUI) 442.30p 2.53%
Investec (INVP) 285.10p 2.33%
Rank Group (RNK) 198.00p 2.27%
Caledonia Investments (CLDN) 3,010.00p 2.03%
Cairn Energy (CNE) 171.20p 1.97%
Watches of Switzerland Group (WOSG) 750.00p 1.90%

FTSE 250 - Fallers

Computacenter (CCC) 2,534.00p -4.02%
WH Smith (SMWH) 1,825.50p -3.05%
John Laing Group (JLG) 306.40p -2.79%
CLS Holdings (CLI) 232.50p -2.52%
FirstGroup (FGP) 75.50p -2.27%
Energean (ENOG) 829.00p -2.13%
Babcock International Group (BAB) 296.20p -1.95%
Serco Group (SRP) 142.40p -1.79%
HGCapital Trust (HGT) 333.00p -1.77%
Meggitt (MGGT) 458.50p -1.57%

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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