LONDON MARKET OPEN: CRH buoyed by US infrastructure spending bill

Thu, 26th Aug 2021 09:01

(Alliance News) - Stock prices in London opened lower on Thursday with a slew of ex-dividend shares weighing on the FTSE 100, while CRH bucked the trend after reporting upbeat interim results.

The FTSE 100 index was up 47.05 points, or 0.7%, at 7,103.07. The mid-cap FTSE 250 index was down 87.80 points, or 0.4%, at 23,900.12. The AIM All-Share index was down 0.2% at 1,276.68.

The Cboe UK 100 index was down 0.2% at 706.41. The Cboe 250 was down 0.3% at 21,738.52, and the Cboe Small Companies was flat at 15,479.81.

In mainland Europe, the CAC 40 stock index in Paris was down 0.6%, while the DAX 30 in Frankfurt was down 0.8%.

The Japanese Nikkei 225 index ended up 0.1%. In China, the Shanghai Composite closed down 1.1%, while the Hang Seng index in Hong Kong was down 1.6%. The S&P/ASX 200 in Sydney closed down 0.5%.

In the US on Wednesday, Wall Street ended in the green, with the Dow Jones Industrial Average up 0.1%, while the S&P 500 and Nasdaq Composite were 0.2% higher.

"A tepid opening to trading has seen investors choosing to react to further weakness in Asian markets, as opposed to the further strength of Wall Street. From a technical perspective, the usual slew of FTSE 100 stocks being marked ex-dividend on a Thursday also weighs on the index," said interactive investor's Richard Hunter.

In the FTSE 100, CRH was the best performer, up 1.0%, after the Irish building materials firm delivered strong interim results and raised its dividend.

CRH said pretax profit doubled to USD1.05 billion in the six months that ended June 30 from USD518 million a year before. Revenue was USD14.04 billion, up 15% from USD12.22 billion.

CRH posted earnings before interest, tax, depreciation and amortisation of USD2.0 billion, which was 25% ahead of USD1.6 billion last year. CRH said this reflected strong volume growth as well as a continued focus on price improvements and cost rationalisation, which more than offset the effects of input cost inflation.

The Dublin-based company declared an interim dividend of 23 US cents, up 4.5% from 22 cents paid out last year.

Looking ahead, CRH said it is encouraged by the progress being made in relation to the Biden administration's plans for infrastructure spending in the US. In Europe, it expects solid construction demand in its key markets to continue against a backdrop of a strong prior year performance.

US President Joe Biden's plans to spend nearly USD5 trillion to change the world's largest economy advanced in the House of Representatives earlier this week, after Democratic leaders reached an agreement with centrist lawmakers to end a dispute threatening the bills.

Biden and his Democratic allies controlling the chamber are pushing for passage of both a USD1.2 trillion infrastructure overhaul and a bill costing USD3.5 trillion over 10 years that would pay for improvements to education, health care and climate change resiliency.

AstraZeneca was up 0.5% after the Anglo-Swedish drugmaker said its Forxiga drug to treat chronic kidney disease was granted approval in Japan.

At the other end of the large-caps, Mondi, Aviva and Diageo were down 2.2%, 1.9% and 1.5%, after the stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.

Polymetal International was down 1.7%. The Russian gold miner posted improved first-half earnings as it benefited from favourable commodity prices, but lifted its capital expenditure guidance for the whole of 2021.

For the six months to June 30, revenue was USD1.27 billion, up 12% from USD1.14 billion last year. Pretax profit was USD521 million, rising 11% from USD470 million.

Polymetal said its average realised gold and silver prices tracked market dynamics and increased by 8% and 59%, respectively, during the period.

Looking ahead, Polymetal said it is on track to meet its 2021 production guidance of 1.5 million ounces of gold equivalent.

However, Polymetal lifted its capital expenditure guidance to between USD675 million to USD725 million, from the previous forecast of USD560 million. The miner put this down to wage inflation, a feasibility study at its POX-3 asset and "continuing macroeconomic pressures".

In the FTSE 250, Watches of Switzerland Group was up 0.2%. The luxury timepiece retailer hired William Floydd as its new chief financial officer, succeeding Anders Romberg who is set to retire after seven years in the role.

Floydd joins Watches of Switzerland from fellow FTSE 250 constituent Rank Group, where he has held the CFO post since November 2018.

Watches of Switzerland said Floydd's start date will be announced, and Romberg will remain with the company as a director and CFO until then and will leave following a handover period.

Rank Group, noting the announcement, said it expects Floydd to leave Rank at the end of 2021 and it will shortly begin a search for his successor. Shares in the casino operator were 0.7% lower.

The dollar was trading lower. The pound was quoted at USD1.3745 early Thursday, up from USD1.3726 at the London equities close Wednesday.

The euro stood at USD1.1765, up from USD1.1754. Against the Japanese yen, the dollar was priced at JPY110.01, slightly lower against JPY110.06.

Brent oil was quoted at USD71.82 a barrel, rising from USD71.61 late Wednesday. Gold was trading at USD1,784.50 an ounce, marginally lower from USD1,786.95.

Thursday's economic calendar in Europe sees the European Central Bank policy meeting minutes at 1230 BST, while US GDP and initial jobless claims are due at 1330 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com