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(Alliance News) - Stock prices in London were higher on Wednesday afternoon, with the large-cap FTSE 100 index getting a boost from strong corporate updates, while New York futures were mixed ahead of the latest US Federal Reserve interest rate decision.
London-listed banks were on the rise, after strong results from Barclays, and travel stocks climbed on reports the UK government may ease curbs on US and EU arrivals.
Strong gains from precious metals miner Fresnillo and wealth manager St James's Place also added some impetus to the London session, as attention now turns to the latest Fed interest rate decision at 1900 BST.
The FTSE 100 index was up 13.50 points, or 0.2%, at 7,009.58 midday Wednesday. The mid-cap FTSE 250 index was up 182.22 points, or 0.8%, at 23,059.23. The AIM All-Share index was up 7.71 points, 0.6%, at 1,238.82.
The Cboe UK 100 index was up 0.1% at 697.93. The Cboe 250 was up 0.8% at 20,813.52, but the Cboe Small Companies was down 0.3% at 15,195.40.
The CAC 40 in Paris was up 0.8%, while the DAX 30 in Frankfurt was 0.2% higher.
"Strong tech earnings have done little to lift sentiment, with the FTSE 350 upside largely driven by gains across banking and travel names," IG analyst Joshua Mahony commented.
Barclays rose 3.5% as it kicked off the UK banking reporting season with a sharp profit hike as the lender's bottom line was boosted by a release of credit impairment provisions.
Pretax profit in the six months to June 30 more than tripled to GBP4.98 billion from GBP1.27 billion a year earlier. Net operating income jumped 53% to GBP12.06 billion from GBP7.88 billion.
The bank benefited from a GBP742 million credit impairment release, compared to a charge of GBP3.74 billion a year earlier.
Chief Executive James Staley labelled it a "strong first half".
Barclays also announced plans for a GBP500 million buyback, adding to the GBP700 million it returned to shareholders through a share repurchase programme it completed in April. It also declared a 2.0 pence per share dividend, having not paid one a year earlier.
"Banking stocks are enjoying a boost today, with Barclays seeing their profits almost triple over the first half of the year. Understandably, the reliance upon their investment banking division does highlight why we are likely to continue seeing underperformance for the UK banks compared with their US counterparts," IG's Mahony added.
Peers NatWest and Lloyds rose 1.0% and 1.2%. Lloyds reports half-year results on Thursday, before NatWest on Friday.
St James's Place rose 7.0%, the best performing large-cap stock. The wealth manager's funds under management climbed 11% to a record GBP143.77 billion on June 30 from GBP129.34 billion at the end of last year. Annually, it was up 24%.
Gross inflows jumped 27% year-on-year to GBP9.19 billion from GBP7.26 billion. What's more, the company swung to a pretax profit of GBP482.6 million from a GBP71.9 million loss a year earlier.
St James's Place declared an 11.55p per share first half payout, in line with its plan for interim dividends to amount to 30% of the prior year's total dividend. It did not make a payout in the first half of 2020.
Precious metals miner Fresnillo surged 5.6%, posting a decent second quarter and affirming annual guidance.
Total silver output rose 9.6% annually and 18% from the preceding quarter to 14.9 million ounces. Gold production rose 8.6% year-on-year to 200,200 ounces but fell 12% from the first quarter.
Fresnillo said it was on track to meet its 2021 guidance of between 675,000 and 725,000 ounces of gold and between 53.5 million to 59.5 million ounces of silver.
Gold slipped to USD1,798.83 an ounce midday Wednesday, down USD1,802.67 at the London equity market close on Tuesday.
At the other end of the large cap index, Reckitt Benckiser fell 1.6%, extending declines after posting a swing to loss on Tuesday. In addition, a raft of investment banks have since cut their price targets for the Dettol disinfectant maker.
Reporting second quarter results at midday, pharmaceutical firm GlaxoSmithKline said pretax profit fell by 44% to GBP1.47 billion from GBP2.64 billion a year before, as revenue rose by 6.1% to GBP8.09 billion from GBP7.62 billion. However, Glaxo recorded an 'other operating' expense of GBP76 million from GBP1.61 billion in other operating income a year before.
Glaxo declared a 19p quarterly dividend and expects to payout 80p for the year as a whole. However, it said back in June that this will fall to 55p in 2022 from GSK and its demerged Consumer Healthcare business.
The stock was up 1.2% following the announcement.
The pound was quoted at USD1.3875 midday on Wednesday in London, down from USD1.3882 late Tuesday. The euro stood at USD1.1803, down from USD1.1834.
England is expected to open its borders to allow US and EU travellers who are fully vaccinated against coronavirus to enter without the need to quarantine, according to reports.
The plans, which would be a boost to the aviation and tourism sectors, are expected to be discussed by ministers on Wednesday, The Guardian and The Times reported.
It comes after aviation firms claimed a trial has demonstrated the UK can safely exempt fully vaccinated US and EU visitors from self-isolation.
Travel stocks were boosted. easyJet rose 4.9%, Ryanair added 2.3% and British Airways-parent International Consolidated Airlines Group was up 4.0%. Holiday firm On The Beach added 3.8%.
Wizz Air rose 6.2% as it claimed on Wednesday will be the "first major European airline to fully recover capacity to pre-Covid-19 levels".
The Budapest-based low-cost airline promisingly said it expects to operate up to 100% of its 2019 capacity during July and August.
Its pretax loss for the three months ended June 30 widened, however, to EUR113.5 million from EUR107.4 million a year earlier. Total operating expenses were 56% higher at EUR307.7 million from EUR197.1 million a year earlier.
Wizz Air posted revenue of EUR199.0 million, more than doubled from EUR90.8 million a year ago. Ticket revenues accounted for EUR87.2 million and ancillary revenues increased by 82% to EUR111.9 million.
In New York on Wednesday, the Dow Jones Industrial Average was called down 0.1%. The S&P 500, called largely flat and the Nasdaq Composite pointed 0.1% higher.
In pre-market trade, Google owner Alphabet's A stock was 3.9% higher, while computer software, consumer electronics and personal computers firm Microsoft was up 0.5%. The duo posted strong quarterly results late Tuesday.
Apple was down 1.2%. It also posted promising quarterly numbers, though Chief Financial Officer Luca Maestri cautioned "supply constraints" will hit its iPhone and iPad range in its final quarter ending September.
"We expect supply constraints during the September quarter to be greater than what we experienced during the June quarter. The constraints will primarily impact iPhone and iPad," Maestri warned in an analyst call.
On Wednesday, social networking site Facebook and pharmaceutical firm and Covid-19 vaccine maker Pfizer report second-quarter results.
Against the yen, the dollar rose to JPY109.98 midday London time, from JPY109.66 late Tuesday.
"The dollar is edging higher during early Wednesday trading, as investors await the conclusion of the Fed's meeting later today," ActivTrades analyst Ricardo Evangelista commented.
Evangelista noted there are two outcomes from the Fed's update which could hit, or provide support for the greenback.
The ActivTrades analyst said the central bank may provide further hints of QE tapering and mention inflationary risks, boosting the dollar. Conversely, the Fed could go more dovish, as it weighs up the threat of the Delta variant. More dovish tones would "likely to lead to dollar losses", Evangelista added.
A press conference with Fed Chair Jerome Powell will be held at 1930 BST.
Brent oil was quoted at USD74.70 a barrel midday Wednesday, up from USD74.58 at the London equity market close on Tuesday.
By Eric Cunha; ericcunha@alliancenews.com
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