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(Alliance News) - Stocks in London ended on a subdued note on Thursday on a bountiful day of corporate earnings, with banks bookending the FTSE 100.
The FTSE 100 index closed down 2.19 points at 6,961.48, having gone back above the 7,000 mark in early trade.
The FTSE 250 ended down 46.88 points, or 0.2%, at 22,392.94. The AIM All-Share closed marginally higher at 1,274.52.
The Cboe UK 100 ended down 0.1% at 693.00, the Cboe UK 250 closed flat at 20,043.10, and the Cboe Small Companies ended up 0.4% at 14,598.60.
In Paris the CAC 40 ended down 0.1%, while the DAX 30 in Frankfurt ended down 0.9%.
In the FTSE 100, Standard Chartered ended the best performer, up 5.6%. The Asia-focused bank reported a "strong" start to 2021, with a sharp drop in credit impairments and a record quarter from its Wealth Management arm giving the bank confidence for the rest of 2021.
In the three months to March 31, the lender reported a sharp jump in pretax profit to USD1.41 billion from USD886 million the year before. This followed a dramatic drop in its credit impairment to USD17 million from USD962 million.
Looking ahead, StanChart believes its larger markets will "continue to drive the global economy". On top of its "stabilising" net interest margin - which broadly flat from the final quarter of 2020 - the bank is "confident" in reinforcing its 2021 guidance.
Smith & Nephew ended the second-best performer, up 5.6%, after the medical devices maker said it saw double-digit first quarter revenue growth.
Smith & Nephew said its first quarter revenue surged 12% to USD1.26 billion from USD1.13 billion a year earlier. The company noted a 3.4% foreign exchange benefit, a 1.9% boost from acquisitions and also said the quarter had "two more trading days".
Smith & Nephew reinstated guidance for the year ahead. It expects 2021 underlying revenue growth between 10% and 13%. The outlook assumes market conditions improve in the second half, with surgery levels unhurt by Covid-19.
Unilever closed up 3.3% after the consumer goods firm posted underlying sales growth in its first quarter, though currency headwinds meant revenue was subdued, while also announcing plans for a EUR3 billion share buyback.
The Ben & Jerry's and Dove soap maker's revenue in the first three months of 2021 slipped 0.9% year-on-year to EUR12.33 billion from EUR12.44 billion a year earlier.
Unilever declared a EUR0.4268 per share dividend, up 4.0% year-on-year from EUR0.4104.
BT Group closed up 2.5% after the telecommunications firm confirmed it is in discussions to potentially sell a stake in its sports broadcasting arm.
The former state monopoly said it is in discussions with "a number of select strategic partners" in regards to BT Sport.
BT is exploring ways to "generate investment, strengthen our sports business, and help take it to the next stage in its growth".
Late Wednesday, the Telegraph reported BT is in discussions to sell a holding in its sports broadcasting arm, with Amazon.com in the running to buy in and increase its foothold in the industry. Walt Disney Co also in the race to buy a stake, the newspaper reported.
BT has appointed investment bankers Lazard and has also held talks with sports streaming service Dazn. According to a Telegraph source, Dazn was "most keen".
BT Sport launched in 2013 and emerged as a serious rival to Sky UK's Sky Sports. BT Sport snapped up the lucrative television rights to the two premier European football competitions, the UEFA Champions League and UEFA Europa League.
At the other end of the large-caps, NatWest Group ended the worst performer, down 3.4%, despite the state-backed lender posting a jump in quarterly profit.
NatWest's pretax profit surged to GBP946 million for the first quarter of 2021 from GBP519 million a year ago, on total income of GBP2.66 billion, down 16% from GBP3.16 billion. NatWest recorded a net impairment release of GBP102 million in the first quarter, compared to a charge of GBP802 million a year ago. NatWest also retained its outlook guidance.
"NatWest is awash with capital, and unlike other UK banks is already making use of it. GBP1.2bn of government shares have been bought back this quarter, and while that still leaves the government with a majority share it hopefully starts the clock on bringing one of the last legacies of the financial crisis to a close," said Hargreaves Lansdown analyst Nick Hyett.
"The downside given the size of the government shareholding is that dividends are likely to be modest for now, with cash instead directed towards buybacks. Overall these are not bad results per se, they just don't contain much to get excited about," Hyett added.
RELX closed 3.0% lower after the stock went ex-dividend meaning new buyers no longer qualify for the latest payout.
Flutter Entertainment ended 2.7% lower. The gambling firm said it was off to a "strong start" for 2021, with growth driven by online revenue performance.
The Dublin-based firm saw first-quarter revenue rose 32% year-on-year to GBP1.49 billion, from GBP1.13 billion in 2020. Much of the revenue gain was driven by online business growth, which grew 41% for the quarter, from the prior year.
Flutter said no decision had yet been made on a possible US listing of a "small part" of FanDuel, one of its main US betting brands. Flutter is currently in the middle of an arbitration dispute with Fox Corp over the value of Fox's option to buy a stake in FanDuel.
Royal Dutch Shell 'A' and 'B' shares closed down 1.1% and 1.4% respectively, despite positive quarterly earnings. The oil major reported a larger-than-expected jump in quarterly earnings on improved energy prices.
Shell's adjusted earnings jumped to USD3.23 billion from USD2.86 billion - ahead of company-compiled consensus at USD3.13 billion - as it swung to a profit attributable to shareholders of USD5.66 billion from a loss of USD24 million year-on-year.
The improved earnings print reflects higher realised oil and liquefied natural gas prices, Shell said. At the end of the quarter, net debt stood at USD71.3 billion, down from USD75.4 billion at the end of 2020 as the company progresses towards the USD65 billion target. Once this is achieved, Shell plans to increase shareholder distributions to 20% to 30% of cash flow from operations.
The dividend for the quarter was USD0.1735 per share, up 4% on the previous quarter.
The dollar was lower against major counterparts following dovish tones from the US Federal Reserve on Wednesday. The pound was quoted at USD1.3950 at the London equities close, rising from USD1.3912 at the close Wednesday.
The euro stood at USD1.2120 at the European equities close, up from USD1.2100 late Wednesday. Against the yen, the dollar was trading at JPY108.94, down from JPY108.85 late Wednesday.
The Fed on Wednesday reiterated it was committed to using its full range of tools to support the US economy during the pandemic, thereby "promoting its maximum employment and price stability goals".
The policy-setting Federal Open Market Committee left its benchmark rate unchanged in the range of 0.00% to 0.25%, as widely expected. The Fed also left its quantitative easing programme unchanged.
Stocks in New York were mixed at the London equities close as investors digested robust US economic data and strong corporate earnings.
The DJIA was down 0.1%, the S&P 500 index up 0.2% and the Nasdaq Composite down 0.2%.
The US economy rebounded further at the start of this year, official figures showed, while initial jobless claims hit a fresh post-pandemic low.
Gross domestic product increased at an annual rate of 6.4% in the first quarter of 2021, according to the Bureau of Economic Analysis's advance estimate, faster than the 4.3% growth recorded for the fourth quarter of 2020. This beat expectations, according to FXStreet, of 6.1% growth.
In addition, US Department of Labor showed initial jobless claims came in at 553,000 for the week to April 24, down from 566,000 the week before and hitting a new post-pandemic low.
On the corporate front, Apple was up 0.7% in New York after the iPhone maker posted blowout quarterly earnings late Wednesday and as Goldman Sachs raised the stock to Neutral from Sell.
Apple reported doubled earnings for the second quarter of its financial year, driven by record revenue through sharp growth in iPhone and Mac sales. For the three months ended March 27, the Cupertino, California-based technology colossus posted net income of USD23.68 billion, more than doubled from USD11.25 billion the same period the year before. Diluted earnings per share also more than doubled annually to USD1.40 from USD0.64.
Facebook was up 6.0% after the Mark Zuckerberg-led firm reported a sharp rise in first-quarter earnings as the social media platform benefited from strong advertising revenue.
For the first quarter ended March 31, Facebook posted revenue of USD26.17 billion, up 48% from USD17.74 billion last year and net income was USD9.50 billion, almost double from USD4.90 billion. Diluted earnings per share in the first quarter was USD3.30, up 94% from USD1.71 last year.
Brent oil was quoted at USD68.35 a barrel at the equities close, up sharply from USD67.65 at the close Wednesday, on global reopening hopes.
"Despite concerns over the Indian variant, parts of Europe are also heading towards reopening and could be poised to have a somewhat normal summer. The crude demand outlook is getting a big boost from Europe and that should overcome some of the risks across India and many emerging markets," said Oanda Markets analyst Edward Moya.
Gold was quoted at USD1,768.68 an ounce at the London equities close, marginally lower against USD1,772.08 late Wednesday.
The economic events calendar on Friday has China manufacturing PMI overnight, UK Nationwide house price index readings at 0700 BST and eurozone economic growth figures at 1000 BST.
The UK corporate calendar on Friday has first-quarter results from Anglo-Swedish drugmaker AstraZeneca and lender Barclays.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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