LONDON MARKET CLOSE: Stocks rise on Nord Stream 1 restart report

(Alliance News) - Stocks in London ended higher on Tuesday amid hopes of a restart of natural gas supplies after months of brinkmanship by Russia over the flow to Germany and the rest of Europe.

Reuters on Tuesday reported Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on Thursday after the completion of scheduled maintenance, two sources familiar with the export plans told the agency.

There were mounting fears that Russian gas exports to Europe, flowing through the Nord Stream 1 pipeline to Germany, will not resume at the end of this week as planned, boosting oil prices. The pipeline was shut down for 10 days to carry out scheduled maintenance.

European nations want to see it resume gas shipments via the Nord Stream 1 pipeline on Thursday.

The FTSE 100 index closed up 73.04 points, or 1.0%, at 7,296.28. The FTSE 250 ended up 267.44 points, or 1.4%, at 19,282.59. The AIM All-Share closed up 2.73 points, or 0.3%, at 888.70.

The Cboe UK 100 ended up 1.1% at 727.40, the Cboe UK 250 closed up 1.5% at 16,808.89, and the Cboe Small Companies finished up 1.0% at 13,293.73.

In European equities, the CAC 40 in Paris ended up 1.8%, while the DAX 40 in Frankfurt finished 2.7% higher.

CMC Markets analyst Michael Hewson said: "The nature of today's gains was initially cautious and incremental in nature, with the lack of negative drivers and positive earnings updates, helping to give a more positive bias to the day's price action.

"We got additional traction in the afternoon session on reports out of Moscow which indicated that gas flows out of the Nord Stream 1 pipeline would resume as scheduled on Thursday, albeit at a lower capacity. This is welcome news if true, given that earlier today European Commission officials were assuming the pipeline would not restart."

In the FTSE 100, GSK ended the best performer, up 28%, as the share consolidation following the demerger of its consumer healthcare product arm, Haleon, took effect.

"After the close of day 1 trading, GSK consolidates its existing shares, returning the share price to around the same as before demerger. This will ensure comparability of the company's earnings per share and share price with previous periods," GSK had said.

Haleon ended among the worst performers, down 2.4%. A slew of banks, such as UBS and BoFA started coverage on the stock with 'buy' ratings. However, Barclays bucked the trend initiating coverage at 'equal weight'.

CMC's Hewson commented: "GSK spin off Haleon has continued to underperform, after yesterday's underwhelming stock market debut, as investors continue to ask questions about its valuation at a time when consumer confidence is low and business costs are rising."

Informa closed up 5.4% after the business publisher and events organiser backed annual expectations.

The London-based firm still expects revenue between GBP2.15 billion to GBP2.25 billion for 2022, with adjusted operating profit between GBP470 million to GBP490 million. At best, this would represent revenue growth of 25% from GBP1.80 billion in 2021 and adjusted operating profit growth of 26% from GBP388.4 million.

Guidance does not include any contribution from Industry Dive, which Informa announced it has acquired for up to USD525 million. The initial cash consideration is USD389 million.

In the FTSE 250, 4imprint ended the standout performer, up 19%, after the marketer of promotional merchandise raised its full-year outlook.

4imprint said strong trading has continued in the first six months of the year.

In the half year to June 30, total order numbers in the company's primary North American business were 14% higher than pre-Covid 2019 levels. Average order values also were 14% ahead of 2019, with overall demand revenue up 30%.

The trading momentum means 4imprint is likely to meet or exceed its revenue target of USD1 billion in revenue in 2022, it said.

Further, its expectations for full-year operating profit have "improved substantially". 4imprint now expects profit to be materially above the consensus of analysts' forecasts and at least USD75 million.

Elsewhere in London, Wise closed up 15% after the international money transfer services provider kicked off its new financial year with growth in revenue and volumes.

In the three months ended June, Wise said revenue grew 51% yearly to GBP185.9 million from GBP123.5 million. Quarter-on-quarter, revenue was up 21%. Transaction volumes were 49% higher yearly and 14% higher quarterly at GBP24.4 billion.

Wise left revenue guidance unchanged. It still expects annual growth of between 30% and 35% for financial 2023.

The pound was quoted at USD1.2030 at the London equities close, up from USD1.1994 at the close Monday.

The UK unemployment rate remained unchanged in the three months to May, in line with market expectations. The jobless rate was 3.8%, the same level as in the three months in April, according to the Office for National Statistics. A year earlier, the unemployment rate had sat at 4.9%. The latest figure was in line with FXStreet-cited consensus.

The euro found support after inflation on the continent picked up pace, ahead of a slam dunk rate hike from the European Central Bank on Thursday.

According to Reuters on Tuesday, ECB policymakers are considering raising interest rates by a bigger-than-expected 50 basis points at their meeting to tame record-high inflation, two sources with direct knowledge of the discussion told the agency.

The single currency stood at USD1.0245 at the European equities close, up sharply from USD1.0167 late Monday.

The eurozone annual inflation rate increased to 8.6% in June from 8.1% in May, confirming an earlier estimate, according to the latest data from Eurostat.

The central bank had signalled it will raise eurozone interest rates on Thursday for the first time in more than a decade but is under pressure to do more to tackle spiralling prices. The ECB intends to raise borrowing costs by a quarter point, the first such move since 2011.

Against the yen, the dollar was trading at JPY137.77, down from JPY138.17 late Monday.

Stocks in New York were firmly in the green at the London equities close ahead of results from Netflix after the market close.

The DJIA was up 1.6%, the S&P 500 index up 1.8% and the Nasdaq Composite up 2.0%.

On Wall Street, Johnson & Johnson was down 0.1% as the drugmaker posted quarterly sales growth, due to the strong performance of its Pharmaceutical arm, though earnings fell.

Sales for the second quarter of 2022 rose 3.0% to USD24.02 billion from USD23.31 billion year-on-year. Adjusted operational sales were up 8.1%. Net earnings slumped 23% to USD4.81 billion from USD6.28 billion after taking a larger income tax provision. Diluted earnings per share fell at the same rate to USD1.80 from USD2.35.

Brent oil was quoted at USD105.85 a barrel at the equities close, slightly higher from USD105.55 at the close Monday.

Gold stood at USD1,714.05 an ounce at the London equities close, firm against USD1,709.33 late Monday.

The economic events calendar on Wednesday has UK inflation readings at 0700 BST and UK ONS house price data at 0930 BST. Elsewhere, the Bank of Japan monetary policy meeting gets underway.

The UK corporate calendar on Wednesday has interim production results from miners Antofagasta and Centamin. Postal operator Royal Mail issues first-quarter results.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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