London open: Stocks steady ahead of Fed announcement; Next surges
Sharecast
Opening Market Report
07:13, 29th July 2020

(Sharecast News) - London stocks were little changed in early trade on Wednesday amid lingering concerns about a second wave of Covid-19 and as investors eyed the latest policy announcement from the US Federal Reserve.

At 0840 BST, the FTSE 100 was steady at 6,131.75.

CMC Markets analyst Michael Hewson said global stock markets appear to be getting a little "wobbly" as the latest earnings numbers paint a picture of a global economy that could start to face a challenging time in the weeks and months ahead.

"For all the optimism about a new US stimulus programme, the rising hopes of a vaccine, and the likelihood of central banks keeping monetary policy extraordinarily loose, the resurgence of coronavirus cases that are starting to get reported across the world is prompting the realisation that hopes of a v-shaped recovery is starting to look like pie in the sky," he said.

"A resurgence of Covid-19 cases in Xinjiang in China, Hong Kong, and Australia, as well as spikes in Spain and Belgium, along with other localised outbreaks across Europe has prompted concerns about a second wave, and thus jeopardising further lockdown relaxation measures as we head into August."

Investors will be watching out for the latest Federal Reserve policy announcement later in the day.

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

"For the same reason, we do not expect big changes at this 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."

In equity markets, Next was sitting pretty at the top of the FTSE 100 as it reported a 28% decline in full-price second-quarter, beating its own expectations and performing ahead of the best-case scenario given in its April trading statement.

Corrugated packaging company Smurfit Kappa rallied as it reinstated its final dividend despite posting a drop in first-half profit and revenue as the coronavirus pandemic dented demand. Peers Mondi and DS Smith also gained.

Rathbone Brothers, Wizz Air and Aston Martin were all trading higher after results.

On the downside, Taylor Wimpey fell as the housebuilder said it swung to a loss in the first half due to disruptions caused by the coronavirus outbreak.

Smith & Nephew, a maker of hip and knee replacement products, was weaker after saying it swung to a first-half loss as elective surgeries were cancelled or put off due to the pandemic.

Barclays was on the back foot 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.

Network International slid after raising around £205m in a discounted placing to buy African online commerce platform DPO Group.

Market Movers

FTSE 100 (UKX) 6,131.75 0.04%
FTSE 250 (MCX) 17,287.31 0.05%
techMARK (TASX) 3,761.51 -0.34%

FTSE 100 - Risers

Next (NXT) 5,762.00p 9.50%
Smurfit Kappa Group (SKG) 2,658.00p 7.09%
Mondi (MNDI) 1,454.00p 1.89%
Smith (DS) (SMDS) 281.00p 1.63%
Polymetal International (POLY) 1,929.50p 1.53%
St James's Place (STJ) 965.60p 1.24%
Unilever (ULVR) 4,746.00p 1.22%
British Land Company (BLND) 359.60p 1.21%
Reckitt Benckiser Group (RB.) 7,894.00p 1.21%
Land Securities Group (LAND) 556.00p 1.13%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 126.60p -4.78%
Smith & Nephew (SN.) 1,572.00p -3.56%
Barratt Developments (BDEV) 529.60p -2.11%
Informa (INF) 392.40p -1.41%
International Consolidated Airlines Group SA (CDI) (IAG) 187.25p -1.40%
Barclays (BARC) 110.34p -1.36%
Persimmon (PSN) 2,508.00p -1.10%
Berkeley Group Holdings (The) (BKG) 4,647.00p -1.00%
BP (BP.) 290.90p -0.97%
BT Group (BT.A) 108.90p -0.95%

FTSE 250 - Risers

Rathbone Brothers (RAT) 1,600.00p 5.54%
Perpetual Income & Growth Inv Trust (PLI) 229.50p 5.28%
Wizz Air Holdings (WIZZ) 3,550.00p 4.47%
PureTech Health (PRTC) 280.00p 3.90%
FDM Group (Holdings) (FDM) 969.00p 3.09%
Henderson Smaller Companies Inv Trust (HSL) 769.00p 3.08%
Aston Martin Lagonda Global Holdings (AML) 51.00p 2.86%
Jupiter Fund Management (JUP) 237.80p 2.68%
Oxford Instruments (OXIG) 1,410.00p 2.62%
GCP Student Living (DIGS) 124.40p 2.47%

FTSE 250 - Fallers

Network International Holdings (NETW) 401.60p -10.80%
Lancashire Holdings Limited (LRE) 756.00p -6.78%
AO World (AO.) 162.20p -4.59%
Countryside Properties (CSP) 301.00p -3.65%
Wood Group (John) (WG.) 200.50p -3.23%
Cineworld Group (CINE) 41.48p -3.17%
Equiniti Group (EQN) 140.40p -2.77%
Essentra (ESNT) 299.60p -2.60%
Coats Group (COA) 54.60p -2.50%
Calisen (CLSN) 173.55p -2.50%

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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