Market Round-Up: FTSE 100 Rises on Companies’ Earnings

on Aug 1, 2012
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The FTSE 100 rose on Wednesday (August 1) following strong numbers from clothing retailer Next (NXT:LSE) and lender Standard Chartered (STAN:LSE) as well as other blue-chip companies. London’s benchmark share index finished the day 1.4 per cent, or 77.54 points higher, at 5,712.82 – its highest closing level in nearly two weeks. The FTSE 100 was lifted by the companies’ strong earnings, although many investors held off trading ahead of key European and U.S. central bank policy meetings, which could give more clues over future monetary stimulus moves.

Despite July’s manufacturing report which showed a decline to 45.4 from 48.4 in June, several companies showed upbeat results and strong performance on Wednesday’s trading. Next led the FTSE 100 risers, surging 6.5 per cent to £34.27 per share, as the company reported stronger than expected earnings. Britain’s second-biggest clothing retailer delivered sector-leading sales growth that exceeded its first-half targets and raised its profit forecast. Meanwhile, Asia-focused bank Standard Chartered also impressed the market with its numbers. The lender was up 4.4 per cent at £15.29 per share after it reported a nine per cent increase in its first-half earnings, which was beyond analysts’ expectations.

!m[](/uploads/story/220/thumbs/pic1_inline.png)Other companies that helped London’s benchmark index climb higher include drug maker Shire (SHP:LSE), which was up 4.8 per cent to £19.37 as speculation of a warning from the company proved exaggerated after second-quarter results beat expectations. Taylor Wimpey (TW:LSE) gained five per cent to 46.35 pence after the UK’s second-largest house builder by volume more than doubled its first-half profit target by selling more expensive properties at higher margins. Among the mid-caps, investors were piling into Rightmove (RMV:LSE). Shares in the UK’s most visited property website climbed 13.3 per cent, as the group reported a higher than estimates 35 per cent jump in its first-half earnings driven by an increase in advertising revenue.

Some miners also helped push the index higher in London. Mining company Xstrata (XTA:LSE) bounced 1.5 per cent to 861 pence, while Avocet Mining (AVM:LSE) put on 12.8 per cent to 84.6 pence as the gold miner showed better than expected results. Bucking the trend in mining, Eurasian Natural Resources (ENRC:LSE) dropped 1.1 per cent, while Vedanta Resources (VED:LSE) was down 0.6 per cent, and Randgold Resources (RRS:LES) shed 2.1 per cent. Towards the low end of the FTSE 100 was also Whitbread (WTB:LSE). Shares in the Costa Coffee owner lost 1.8 per cent as UBS analyst Jonathan Leinster downgraded the restaurant operator to “neutral” from “buy”. He expects it to have been a difficult trading environment in June, because of the extended Bank Holiday for the Diamond Jubilee and the bad weather.
Despite the raft of strong numbers from leading British companies and the overall positive trading, uncertainty over the meetings of the U.S. Federal Reserve and European Central Bank on Wednesday and Thursday kept trading volumes below average. Volumes on the FTSE 100 were at 64 per cent of their average 90-day volumes.

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