Barclays Share News (BARC)

(Alliance News) - The FTSE 100 managed to turn around Wednesday's early morning malaise to trade in the green by midday - helped by a rally for Next shares - though trade remained cautious as markets await the US Federal Reserve's latest policy decision.

The FTSE 100 index was up 23.41 points, or 0.4%, at 6,152.67 midday Wednesday. The mid-cap FTSE 250 index was down 44.32 points, or 0.3%, at 17,233.91 and the AIM All-Share index was up 0.1% at 892.40.

The Cboe UK 100 index was up 0.3% at 613.33. The Cboe 250 was down 0.5% at 14,625.65 and the Cboe Small Companies down 0.2% at 9,091.09.

In mainland Europe, the CAC 40 in Paris was up 0.6% while the DAX 30 in Frankfurt was down 0.1% Wednesday afternoon.

"Big earnings, a Fed decision, and appearances from tech CEOs in front of US lawmakers are all on the agenda for today, so it is not a surprise to see markets struggling to make gains. The FTSE 100 has pushed valiantly into positive territory, but even here the index is merely bouncing from the lower end of its current trading range," said Chris Beauchamp, chief market analyst at IG.

Another quiet morning on the data front has left investors waiting for the US session to kick off, said Beauchamp. Things should pick up later in the day, though, with a policy announcement from the Fed.

The Federal Open Market Committee will announce its latest policy decision at 1900 BST. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 BST.

The federal funds rate is currently 0.00% to 0.25%. The CME's FedWatch tool has it fully priced in that the Fed stands pat on rates this week.

Wall Street is on course for a cautiously higher start as markets eye the US central bank. The Dow Jones Industrial Average is seen slightly higher and the S&P 500 up 0.2%, while the Nasdaq is set for a 0.5% rise.

The US corporate calendar for Wednesday has results from the likes of Boeing, General Motors, Paypal and Qualcomm. Thursday is a blockbuster day for earnings, featuring reports from Apple, Facebook and Google owner Alphabet amongst a host of other blue-chip names.

Ahead of the tech earnings, US lawmakers will grill the chiefs of Amazon.com, Apple, Facebook and Google on Wednesday about how they wield marketplace power in what promises to be a rare political spectacle.

The unprecedented joint appearance before the House Judiciary Committee features Tim Cook of Apple, Jeff Bezos of Amazon, Mark Zuckerberg of Facebook and Sundar Pichai of Google and its parent firm Alphabet. The chief executives of four of the world's most powerful companies will testify remotely, less than 100 days before the US election.

It will be the first time Bezos has testified before a congressional committee. The world's richest man will paint online giant Amazon as an example of US entrepreneurship.

The dollar was trading slightly lower ahead of the Fed decision. Sterling was quoted at USD1.2973 midday Wednesday, up on USD1.2930 at the London equities close on Tuesday.

The euro traded at USD1.1749 on Wednesday, higher versus USD1.1731 late Tuesday. Against the yen, the dollar was quoted at JPY104.94, down against JPY105.10.

Fawad Razaqzada, market analyst at ThinkMarkets, said: "The dollar index has today fallen to its lowest level since June 2018, extending its recent declines as investors look forward to the conclusion of the FOMC meeting this evening for direction."

"However, while the Fed meeting is likely to be a damp squib of an event as no policy changes are expected to be announced, and while sentiment is increasingly turning bearish towards the greenback, I reckon there is a possibility the dollar may soon rise from the ashes and start rising again," Razaqzada added.

The softer dollar also helped gold edge upwards again. The precious metal was quoted at USD1,957.23 an ounce on Wednesday, up on USD1,953.15 on Tuesday.

Brent oil was trading at USD43.46 a barrel, higher than USD43.09 late Tuesday.

Helping the FTSE 100 edge into the green on Wednesday was Next, rallying 6.1% on better-than-expected sales in the second quarter.

The clothing retailer said its online warehouse picking and dispatch capacity returned to normal levels quicker than expected and UK and Ireland stores are now open for business.

As a result, full price sales including interest income for the second quarter ended July 25 were "significantly" ahead of expectations, down 28% compared to the year prior. Online sales were up 9%, while retail store sales were down 32% on a like-for-like basis.

Next expects full year pretax profit to be GBP195 million, following the central scenario. This is a stark contrast to the GBP734 million expected in pretax profit in January earlier this year and the GBP748.5 million recorded in financial 2020.

Smurfit Kappa was also among the risers, up 4.4%. The packaging firm resumed dividend payments and hailed its "strong" interim performance, despite posting an earnings fall.

In the six months to June 30, revenue fell 9.1% to EUR4.20 billion from EUR4.62 billion in the year prior.

"This result reflects the negative impact of Covid-19 on demand, the adverse impact of currency, and the fall in box prices," the Dublin-based company said.

The FTSE 100 proposed an interim dividend of 80.9 cents per share, more than double the 27.9 cents it paid a year ago and equal to the final 2019 dividend it had pulled due to the virus crisis.

Dragging at the other end of the index, however, was Taylor Wimpey. The stock was down 8.8%.

The housebuilder swung to a loss in the first half of its current financial year as its income plummeted but said it remains confident on its outlook and expects to restore dividend payments.

For the six months to June 28, Taylor Wimpey posted revenue of GBP754.6 million, down 56% year-on-year from GBP1.73 billion. Pretax loss was GBP39.8 million, swung from a profit of GBP299.8 million a year prior.

The deterioration in its performance was blamed on the closing of construction sites and sales centres from March 23 for the Covid-19 lockdown in the UK.

Turning to current trading, it said that in the nine weeks since its sales centres in England reopened, its sales rate increased to 0.70 from 0.30 during shutdown. It added that there has been a three-fold increase in appointments booked and a 50% increase in website visits year-on-year.

Barclays shares skated 5.7% after the lender took a chunky GBP3.7 billion impairment in the first half, driven by Covid-19.

For the six months to June 30, Barclays pretax profit dropped 58% year-on-year to GBP1.27 billion from GBP3.01 billion. Total income improved 8% to GBP11.62 billion from GBP10.79 billion, but Barclays was forced to up its credit impairment charges to GBP3.74 billion from GBP928 million the year before.

Barclays said the provision increase was largely due to "revised IFRS 9 scenarios" driven by Covid-19.

The scenarios reflect "forecast deterioration in macroeconomic variables including a prolonged period of heightened UK and US unemployment, partially offset by the estimated impact of central bank, government and other support measures".

Taking the top spot in the FTSE 250 was Rathbone Brothers, rising 9.6% after reporting its funds under management shrunk in the first half of 2020 but were still higher than the year before thanks to a strong Unit Trusts business performance.

The London-headquartered wealth manager's total funds under management and administration as at June 30 came to GBP49.4 billion, a 2.0% decline from GBP50.4 billion at the end of 2019. In the same six-month period the FTSE 100 index fell 18% and the MSCI PIMFA Private Investor Balanced index was down 6.3%.

More positively, however, FUMA at the end of June was still higher year-on-year compared to GBP49.2 billion as Unit Trusts business FUMA increased to GBP8.0 billion from GBP6.7 billion the year before. This offset the decline from its Investment management business to GBP41.4 billion from GBP42.5 billion.

In second position was Aston Martin Lagonda Global Holdings, up 6.1% despite widening its loss in the first half of 2020.

The FTSE 250 firm did, however, paint an optimistic picture about its future, hailing its new executive team and looking ahead to 2021 when it will have a "competitive" Formula One racing team offering its brand more exposure.

Revenue in the six months to June 30 fell 64% annually to GBP146.0 million from GBP406.0 million and its pretax loss stretched to GBP227.4 million from GBP80.0 million.

Total retail sales slumped 41% year-on-year to 1,770 cars. The second quarter was hit the worst, falling 48%, after a 31% slump in the first. There are encouraging signs from China however, where retail sales were up 11% year-on-year during the month of June.

By Lucy Heming; lucyheming@alliancenews.com

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