London open: Stocks rise after solid US tech results; IAG slides

Opening Market Report
08:14, 31st July 2020

(Sharecast News) - London stocks rose in early trade on Friday, underpinned by solid results from US tech giants, although worries about the coronavirus pandemic continued to weigh on investors' minds.
At 0900 BST, the FTSE 100 was up 0.5% at 6,019.49.

CMC Markets analyst Michael Hewson said: "Despite the bleak economic data yesterday, the Nasdaq still managed to finish the day higher even if the S&P 500 and Dow finished the day lower.

"This Nasdaq optimism turned out to be well founded as after the bell, Apple, Amazon and Facebook all smashed expectations on their latest quarterly numbers. Apple also announced a 4 for 1 stock split, while posting its best ever Q3 performance."

Despite the positive tone, market participants remained concerned about a resurgence of Covid-19 cases across Europe and in the UK, with new restrictions implemented across Northern England after a spike in cases.

Elsewhere, the latest survey from Nationwide showed house prices bounced back in July, boosted by pent-up demand after the coronavirus lockdown ended.

Annual house price growth recovered to 1.5% from a 1.6% decline June. On the year, prices were up 1.5% compared to a 0.1% dip the month before.

Nationwide's chief economist, Robert Gardner, said the pick-up in prices "reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions".

"Pent-up demand is coming through, where decisions taken to move before lockdown are progressing. Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown.

"Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of life in lockdown."

He said these trends look set to continue in the near term, with the recently-announced stamp duty holiday serving to bring some activity forward. However, he also warned that this could be "something of a false dawn".

"Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead."

In equity markets, precious metals miners Fresnillo, Polymetal and Hochschild were the standout gainers amid firmer gold prices.

Pets at Home surged to the top of the FTSE 250 after it said first-quarter group revenue fell 1% but that momentum was returning across all areas of the business.

On the downside, British Airways and Iberia parent IAG was sharply lower after it posted a second-quarter operating loss before exceptional items of €1.36bn as the Covid-19 pandemic led to a 95.3% drop in passenger capacity. It also said it will tap financial markets for €2.75bn in fresh equity.

BT was in the red as it reported a 13% drop in first-quarter pre-tax profit, with revenue down 7% due to the impact of Covid-19, which weighed on BT Sport revenue.

Inspection, product testing and certification company Intertek was weaker as it posted a decline in first-half profit and announced an exclusive partnership with Bangladeshi textile and garment company BEXIMCO to meet the growing demand for PPE.

Market Movers

FTSE 100 (UKX) 6,019.49 0.49%
FTSE 250 (MCX) 17,064.58 0.28%
techMARK (TASX) 3,751.79 0.21%

FTSE 100 - Risers

Fresnillo (FRES) 1,270.00p 5.09%
Polymetal International (POLY) 1,941.50p 3.46%
M&G (MNG) 163.60p 3.28%
Aveva Group (AVV) 4,220.00p 3.00%
Avast (AVST) 573.50p 2.69%
Scottish Mortgage Inv Trust (SMT) 887.00p 2.54%
Smurfit Kappa Group (SKG) 2,616.00p 2.27%
JD Sports Fashion (JD.) 623.20p 2.06%
Prudential (PRU) 1,134.00p 1.98%
Pennon Group (PNN) 1,071.00p 1.76%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 170.15p -6.02%
BAE Systems (BA.) 490.90p -2.79%
ITV (ITV) 57.42p -2.71%
Intertek Group (ITRK) 5,504.00p -2.10%
HSBC Holdings (HSBA) 342.85p -1.21%
Lloyds Banking Group (LLOY) 25.95p -0.97%
Whitbread (WTB) 2,267.00p -0.83%
Experian (EXPN) 2,730.00p -0.76%
WPP (WPP) 576.60p -0.62%
Rolls-Royce Holdings (RR.) 243.80p -0.61%

FTSE 250 - Risers

Pets at Home Group (PETS) 274.20p 6.94%
Bank of Georgia Group (BGEO) 772.00p 5.03%
Hochschild Mining (HOC) 272.20p 4.85%
Watches of Switzerland Group (WOSG) 276.00p 4.55%
Impax Environmental Markets (IEM) 350.00p 4.48%
Wood Group (John) (WG.) 199.25p 3.72%
Network International Holdings (NETW) 410.80p 2.70%
Marshalls (MSLH) 615.00p 2.67%
Future (FUTR) 1,468.00p 2.66%
Petropavlovsk (POG) 38.95p 2.64%

FTSE 250 - Fallers

Inchcape (INCH) 408.00p -4.09%
Fisher (James) & Sons (FSJ) 1,136.00p -3.40%
easyJet (EZJ) 507.40p -2.91%
Frasers Group (FRAS) 256.40p -2.88%
Shaftesbury (SHB) 501.00p -2.53%
Carnival (CCL) 858.40p -2.08%
Gamesys Group (GYS) 923.00p -2.02%
Cineworld Group (CINE) 38.85p -1.94%
Wizz Air Holdings (WIZZ) 3,242.00p -1.76%
Travis Perkins (TPK) 1,137.50p -1.47%

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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