London midday: Stocks boosted by corporate earnings
London stocks gained on Tuesday with Standard Life and Worldpay leading the risers on the FTSE after reporting well-received first half results.
Worldpay rallied after it posted a rise in first-half underlying earnings and pre-tax profit amid strength in all its businesses, as it declared a maiden interim dividend of 0.65p per share.
Standard Life shares jumped after it reported an 18% increase in operating profit before tax for the first half thanks to diversification, as its assets under management grew. The insurer and asset manager declared an interim dividend of 6.47p per share, up 7.5% on the first half of last year.
Legal & General shares headed in the opposite direction as the company painted a gloomy outlook due to uncertainty on the economy, financial markets and politics post Brexit. The FTSE 100 firm posted a mixed set of half year results, which included a slowdown in new client funds at the investment arm.
Housebuilders were also under pressure with Barratt Developments, Berkeley Group, Taylor Wimpey, Travis Perkins and Persimmon in the red.
In macro-economic data, the UK trade deficit widened in June as imports outpaced exports. The Office for National Statistics said the UK’s deficit in goods trade widened to £12.4bn in July from £11.5bn in June. Economists had pencilled in a deficit of £10.1bn.
“Looking ahead, the trade deficit likely will remain bloated in the near-term, as sterling’s depreciation will continue to make imports dearer,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“Previous sterling depreciations typically have taken two years to boost net trade, as it takes time for contracts to be renegotiated and exporters to invest in new capacity. What’s more, we fear that the trade boost could take even longer than usual to materialise this time, because exporters will be very reluctant to invest until the UK’s future trade arrangements are known.”
The ONS also revealed that UK industrial production remained stable on a month-to-month basis in the run-up to the Brexit vote. Industrial production in June rose by a slight 0.1%, in line with estimates and rebounding from the revised previous 0.6% decline the month before. On the year production increased 0.9% in June, missing forecasts for 1.3% growth and slowing from the previous month’s 1.5% gain.
Since the ONS data largely covered the pre-EU referendum period, analysts took more interest in the July Retail Sales Monitor from the British Retail Consortium. The BRC-KPMG measure of like-for-like retail sales values rebounded to 1.1% year-over-year in July, thrashing the consensus forecast for a 0.7% decline.
“Although the month’s warmer weather may have provided some support, the main takeaway was that, despite last week’s gloomy consumer confidence data, thus far Brexit doesn’t appear to have had a material impact on retail sales,” said Martin Beck, senior economic advisor to the EY ITEM Club.
“If this picture is mirrored by next week’s official retail sales figures then it will reinforce our view that the resilience of the consumer sector will help the wider economy to skirt recession.”
Elsewhere, the National Federation of Independent Business index on US small business optimism rose slightly to 94.6 in July from 94.5 in June, beating expectations for an unchanged reading.
Still to come, the NIESR releases its latest gross domestic product estimate at 1500 BST and US wholesale inventories figures are due at 1500 BST.
Market Movers
FTSE 100 (UKX) 6,831.07 0.32%
FTSE 250 (MCX) 17,594.90 0.21%
techMARK (TASX) 3,506.64 0.11%
FTSE 100 - Risers
Worldpay Group (WI) (WPG) 314.70p 4.41%
Standard Life (SL.) 331.80p 4.18%
easyJet (EZJ) 1,072.00p 3.18%
Smiths Group (SMIN) 1,330.00p 3.10%
Morrison (Wm) Supermarkets (MRW) 192.10p 2.18%
TUI AG Reg Shs (DI) (TUI) 1,000.00p 2.09%
Tesco (TSCO) 157.55p 1.91%
Standard Chartered (STAN) 659.70p 1.59%
Marks & Spencer Group (MKS) 335.40p 1.51%
Barclays (BARC) 159.70p 1.46%
FTSE 100 - Fallers
Legal & General Group (LGEN) 206.20p -5.46%
Barratt Developments (BDEV) 427.50p -1.93%
Sky (SKY) 891.00p -1.87%
Travis Perkins (TPK) 1,543.00p -1.41%
Berkeley Group Holdings (The) (BKG) 2,620.00p -1.39%
Taylor Wimpey (TW.) 151.10p -1.24%
Land Securities Group (LAND) 1,086.00p -1.18%
British Land Company (BLND) 659.00p -0.98%
Persimmon (PSN) 1,678.00p -0.94%
Antofagasta (ANTO) 527.00p -0.75%
FTSE 250 - Risers
Amec Foster Wheeler (AMFW) 512.00p 9.78%
Ocado Group (OCDO) 290.80p 5.25%
Tullow Oil (TLW) 221.30p 5.13%
Spire Healthcare Group (SPI) 341.40p 3.17%
Spirax-Sarco Engineering (SPX) 4,227.00p 3.05%
Entertainment One Limited (ETO) 203.90p 3.03%
DFS Furniture (DFS) 220.00p 2.56%
AA (AA.) 272.40p 2.56%
Petrofac Ltd. (PFC) 806.00p 2.54%
William Hill (WMH) 335.60p 2.50%
FTSE 250 - Fallers
IP Group (IPO) 153.00p -4.49%
SIG (SHI) 103.50p -3.36%
Vectura Group (VEC) 141.60p -2.75%
Sophos Group (SOPH) 225.90p -2.67%
Riverstone Energy Limited (RSE) 1,032.00p -2.64%
PayPoint (PAY) 998.50p -2.59%
International Public Partnerships Ltd. (INPP) 156.80p -2.43%
HICL Infrastructure Company Ltd (HICL) 180.70p -2.38%
Redrow (RDW) 330.00p -2.37%
Galliford Try (GFRD) 987.50p -2.32%