LONDON MARKET MIDDAY: FTSE 100 treads water on blue chip earnings

(Alliance News) - Stock prices in London were mixed at midday on Friday, after a busy week of earnings comes to an end.

In the FTSE 100, Standard Chartered, NatWest and IAG were boosted, as investors were pleased with their interim results.

The FTSE 100 index was up 4.58 points, 0.1%, at 7,697.34. The FTSE 250 was down 130.44 points, 0.7%, at 19,142.93, and the AIM All-Share was down 2.67 points, 0.4%, at 766.62.

The Cboe UK 100 was down marginally at 767.84, the Cboe UK 250 was down 0.8% at 16,804.30, and the Cboe Small Companies was down 0.3% at 13,773.27.

UK house sales fell by 15% in June compared with the same month a year earlier, according to HM Revenue & Customs figures.

An estimated 85,870 transactions took place in June 2023 across the UK, which was 6% higher than in May this year.

Apart from June 2020, when the market was hit by the impacts of the coronavirus pandemic and there were just 63,630 transactions, June 2023 was the slowest June for house sales seen over the past decade.

The report said that part of the month-on-month increase can be explained by a higher number of working days in June than in May.

On the back of the news, FTSE 100 housebuilders were down. Barratt Developments fell 1.0%, with Taylor Wimpey falling 0.7% and Berkeley Group down 0.6% in a negative read across.

Elsewhere in the FTSE 100, Standard Chartered was up 5.6%.

The London-based, Asia-focused bank launched a new USD1 billion share buyback programme.

Pretax profit in the six months that ended June 30 was USD3.32 billion, up 20% from USD2.77 billion a year before. Operating income increased by 11% to USD9.13 billion from USD8.23 billion, and StanChart also benefitted from a reduced credit impairment of USD161 million, down from USD263 million a year before.

NatWest was up 3.0%, after a week which has seen its share knocked.

On Tuesday evening, Alison Rose resigned as chief executive officer after admitting to being the source of an inaccurate news story about the finances of pro-Brexit politician Nigel Farage.

It reported total income of GBP7.73 billion in the six months ended June 30, up 24% from GBP6.22 billion a year earlier.

Operating pretax profit rose to GBP3.59 billion, up 37% from GBP2.62 billion.

It also plans to begin an on-market buyback programme of up to GBP500 million in the second half of 2023. Jefferies said that the buyback announcement "comes as a surprise."

"While indiscretion may have led to her departure the latest results from NatWest suggest former CEO Alison Rose was making a decent fist of her day job," said Russ Mould, investment director at AJ Bell.

IAG, which operates British Airways, Iberia, Aer Lingus, Level and Vueling, was up 4.2%.

The company swung to a pretax profit of EUR1.04 billion in the six months that ended June 30 from a loss of EUR843 million a year before, on EUR13.58 billion in revenue, up 45% from EUR9.35 billion.

Looking ahead, IAG said 80% of third-quarter revenue and 30% of fourth-quarter revenue has been booked.

In the FTSE 250, Vanquis Banking plummeted 30%.

Vanquis reported that in the six months ended June 30 it swung to a pretax loss of GBP14.5 million from a profit of GBP37.3 million a year earlier.

Vanquis said that this reflects primarily the IFRS 9 impact of strong loan book growth, together with unplanned inflation driving higher costs. Meanwhile, impairment charges more than doubled to GBP85.6 million from GBP38.5 million.

AFC Energy jumped 23%.

The provider of hydrogen-powered generator technologies has teamed up with tool and equipment hire services firm Speed Hire. The two companies propose the launch of a joint venture dedicated to the hire of hydrogen powered generator plants.

Shares in Speedy Hire rose 1.1%.

Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.7%.

In European equities on Friday, the CAC 40 in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.1%.

On Thursday, the European Central Bank lifted eurozone interest rates by 25 basis points as expected, and once again insisted it is taking a "data-dependant" approach to future decisions.

The US Federal Reserve on Wednesday hiked interest rates by 25 basis points and left the door open for a possible interest rate hike in September.

There was also some key US data released on Thursday. According to the first estimate from the US Bureau of Economic Analysis, the US economy grew by more than expected in the second quarter of 2023.

Investors will also have a keen eye on the US personal consumption expenditures reading at 1330 BST, which contains the latest core personal consumption expenditures deflator - the Federal Reserve's preferred metric of inflation.

The pound was quoted at USD1.2820 at midday on Friday in London, lower compared to USD1.2865 at the equities close on Thursday. The euro stood at USD1.0975, lower against USD1.0996. Against the yen, the dollar was trading at JPY139.39, down compared to JPY141.07.

Brent oil was quoted at USD83.33 a barrel at midday in London on Friday, down from USD83.59 late Thursday. Gold was quoted at USD1,952.44 an ounce, higher against USD1,944.93.

By Sophie Rose, Alliance News reporter

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