- FTSE 100 rises 70 points
- HSBC doubles profits
- SSE sells stake is SGN
The sun is shining outside and on traders’ screens as aerospace and retail-related stock lead the Footsie’s advance in London.
The FTSE 100 was up 70 points (1.0%) at 7,102, with Melrose Industries PLC, owner of aerospace and automotive engineer GKN, on top of the tree with a 5.7% gain.
Also going well were British Airways owner International Consolidated Airlines SA, up 4.2%, and aeroplane engine maker Rolls-Royce Holdings PLC, up 4.1%.
It appears speculators are taking a punt on the sector after Meggitt PLC soared 59% to 745.8p this morning on an agreed bid from Parker-Hannifin Corporation worth 800p in cash per share.
The terms value Meggitt at roughly £6.3bn.
Next PLC is leading the way in the retail sector, as it often does, with a 3.1% gain at 8,122p while JD Sports Fashion PLC, up 2.6% at 920.2p, is in hot pursuit.
Banking giant HSBC Holdings PLC outperformed the market, rising 1.4% to 403.1p after its results announcement.
“The banking bounce back has continued with HSBC doubling first-half pre-tax profits as economies come out of their defensive hiding places, and the spectre of bad debt recedes,” said Susannah Streeter at Hargreaves Lansdown.
“The worst-case scenario of an increase in bad loans hasn’t materialised, so the bank has been confident enough to release over $700 million that had been set aside as a buffer. It is in stark contrast to a year ago when it clocked up US$6.9 billion in impairment charges.
“Given the frightening twists the global economy has had to deal with due to the emergence of new variants, the worry is that there could still be monsters lurking under the bed, so the bank is keen to stress it views the recovery as still in the early stages. If inflation lingers, central banks may be minded to push up rates more quickly but that still looks like it is quite far down the road,” she added.
SSE PLC, in contention for the little-wanted accolade of London’s least sexy stock, was up 1.8% at 1,471p after it agreed to sell its one-third stake in gas distribution operator Scotia Networks for £1,225mln in cash.
6.45am: Risk-on back on
The FTSE 100 is expected to jump 37 points at the very start of the week as risk sentiment is rebounding after a sour end to last week, according to Deutsche Bank (NYSE:DB).
“Last week Asia markets saw big declines due to a regulatory crackdown in China, with the Nikkei more or less trading near to its lows this year and the Hang Seng trading at a nine-month low. The extent of the falls appeared to prompt a partial backtrack, or softening of tone by the Chinese authorities prompting a little bit of a rebound which appears to have continued today in Asia,” said Michael Hewson at CMC Markets.
Monday will see the release of manufacturing PMIs for July across Europe, with the UK expected to see a slowdown to 60.4, from 63.9 due to disruptions caused by staff shortages, and interruptions to supply chains due to a rise in infections and workers self-isolating.
Input costs are also rising, raising some concern that price rises could become more persistent and act as a brake on consumer confidence.
6.50am: Early Markets - Asia / Australia
Stocks in the Asia-Pacific region were higher on Monday as U.S. fintech firm Square announced it has agreed to buy Australian buy now, pay later giant Afterpay.
The Shanghai Composite in China surged 1.40% and Hong Kong’s Hang Seng index lifted 1.04%
In Japan, the Nikkei 225 jumped 1.89% while South Korea’s Kospi gained 0.55%.
Shares in Australia surged, with the S&P/ASX 200 trading 1.41% higher.
https://news.google.com/__i/rss/rd/articles/CBMieWh0dHBzOi8vd3d3LnByb2FjdGl2ZWludmVzdG9ycy5jby51ay9jb21wYW5pZXMvbmV3cy85NTY1NTgvZnRzZS0xMDAtdG8tb3Blbi1oaWdoZXItYXMtcmlzay1zZW50aW1lbnQtcmVib3VuZHMtOTU2NTU4Lmh0bWzSAT5odHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL2FtcC9uZXdzLzk1NjU1OA?oc=5
2021-08-02 05:44:00Z
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