London midday: Stocks maintain gains ahead of US GDP
London stocks were still in the black by midday on Wednesday, with the top-flight index breaching the 6,000 mark as investors mulled results from Barclays and Standard Chartered ahead of the release of US GDP data and a policy announcement from the Federal Reserve.
The FTSE 100 was up 0.7% at 6,000.73.
IG said: "European markets are on the rise once again, with traders looking ahead to a potential further bout of easing from the FOMC later today. The recent upside seen in European and US stocks appears to be a combination of optimism over easing lockdown restrictions, coupled with the ever-present influence of huge global stimulus packages.
"With debt seemingly an issue not worth worrying about in the US, there appears to be few limits to the amount of stimulus employed in the name of avoiding a huge economic collapse. If markets reflected economic health, this would look like a textbook V-shaped recovery. However, huge economic questions remain until we find a vaccine, with easing lockdown measures unlikely to bring back complete normality thanks to the virus that continues to influence decisions on both the business and consumer level."
In equity markets, cruise operator Carnival was the standout gainer, followed closely by Barclays, even after it said that profit fell by more than a third in the first quarter as the bank set aside £2.1bn for bad debts during the Covid-19 crisis. Pre-tax profit for the three months to the end of March dropped 38% to £913m as revenue rose 20% to £6.3bn. The charge for impaired loans increased to £2.1bn from £448m a year earlier.
Standard Chartered was up as it reported a 29% drop in first-quarter profit as the Asia-focused bank set aside more than $900m for bad debts and warned of further credit losses ahead. Pre-tax profit for the three months to the end of March fell to $886m from $1.2bn a year earlier as income rose 13% to $4.3bn. It took a charge of $962m for credit losses, up from $78m a year earlier. Pre-tax profit also included a $249m goodwill impairment in India based on a GDP growth revision.
Advertising giant WPP was also higher even as it posted a decline in first-quarter revenues.
Electrical retailer Dixons Carphone rallied as it scrapped its dividend amid the ongoing coronavirus crisis but said UK and Ireland electrical online sales had soared 166% since the government ordered store closures in late March, offsetting a 16% fall in store sales.
On the downside, IAG was the standout loser on the FTSE 100 after it said late on Tuesday that it could cut up to 12,000 jobs at British Airways.
Fashion retailer Next retreated as it pulled its dividend and said it did not anticipate paying one in January 2021 in response to the coronavirus pandemic as full price sales fell 41% in the three months to April 25.
Hiscox was under pressure after the insurer said it is "evaluating possible sources of capital" which could include raising new equity, amid expectations that rates in the US wholesale and reinsurance market will rise due to the pandemic.
Market Movers
FTSE 100 (UKX) 6,000.73 0.71%
FTSE 250 (MCX) 16,503.45 1.30%
techMARK (TASX) 3,588.92 0.72%
FTSE 100 - Risers
Carnival (CCL) 1,089.00p 9.29%
Barclays (BARC) 103.88p 6.26%
Centrica (CNA) 37.90p 5.51%
Rolls-Royce Holdings (RR.) 336.50p 5.32%
WPP (WPP) 621.80p 5.32%
BAE Systems (BA.) 535.80p 4.53%
Meggitt (MGGT) 282.80p 4.32%
ITV (ITV) 78.96p 4.11%
Land Securities Group (LAND) 684.00p 3.79%
M&G (MNG) 134.65p 3.70%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 210.50p -3.40%
Taylor Wimpey (TW.) 151.80p -2.32%
Next (NXT) 4,678.00p -2.26%
Hikma Pharmaceuticals (HIK) 2,274.00p -2.11%
JD Sports Fashion (JD.) 512.20p -1.99%
Smith & Nephew (SN.) 1,526.50p -1.96%
Ocado Group (OCDO) 1,622.50p -1.76%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,878.00p -1.72%
Experian (EXPN) 2,429.00p -1.62%
HSBC Holdings (HSBA) 414.95p -1.33%
FTSE 250 - Risers
Dixons Carphone (DC.) 79.60p 16.20%
Ascential (ASCL) 265.00p 14.62%
Wood Group (John) (WG.) 199.85p 14.20%
Senior (SNR) 66.70p 10.34%
Premier Oil (PMO) 28.65p 9.98%
Aggreko (AGK) 456.00p 8.06%
Contour Global (GLO) 169.60p 7.34%
Provident Financial (PFG) 187.50p 7.14%
Hammerson (HMSO) 68.44p 6.34%
Savills (SVS) 952.50p 6.31%
FTSE 250 - Fallers
Hiscox Limited (DI) (HSX) 684.40p -6.58%
Grafton Group Units (GFTU) 651.00p -3.91%
Aston Martin Lagonda Global Holdings (AML) 53.35p -3.09%
Oxford Instruments (OXIG) 1,216.00p -2.88%
Watches of Switzerland Group (WOSG) 236.00p -2.68%
Telecom Plus (TEP) 1,334.00p -2.63%
Henderson Smaller Companies Inv Trust (HSL) 741.00p -1.98%
TP ICAP (TCAP) 349.80p -1.91%
Paragon Banking Group (PAG) 332.80p -1.77%
Convatec Group (CTEC) 200.40p -1.76%