London’s FTSE 100 finished 0.43% higher at 7,279.91 points on Thursday after the Bank of England confounded market expectations by keeping interest rates on hold, while still warning a hike is coming soon.
Banks were the big casualties with Barclays (BARC), Lloyds (LLOY), NatWest (NWG) and HSBC (HSBA) all marked lower as hopes they would see an increase in lending margins were dashed, for the time being at least.
Earlier in the session, the blue chip benchmark had been on the front foot, in line with other global equity markets, after the US Federal Reserve presented a dovish message to investors.
Fed chair Jerome Powell said the central bank would start to taper back its asset purchases as signalled but added it was nowhere near the point of raising interest rates. US markets rallied in response and overnight trading in Asia followed suit.
BT TOPS LEADER BOARD
UK telco BT (BT.A) led the list of FTSE 100 gainers after announcing it had delivered on its cost-savings programme ahead of schedule, half year results beat expectations and the company vowed to win Britain’s fibre broadband wars.
Shares in BT rallied 11.1% to 158p after it delivered second-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) of £1.88 billion on £5.24 billion revenue. The company also confirmed its outlook for the current and full year to March 2023 after it reported a 3% fall in first half revenue and a 1% rise in underlying profits for the first six months.
METRO BANK SURGES
Shareholders in challenger financial Metro Bank (MTRO) were celebrating a 30% jump in the stock to 134p after the firm revealed it had received an approach from funds affiliated with the Carlyle Group, although there was no mention of price.
Shares in supermarket chain Sainsbury’s (SBRY) fell 2.5% to 282p after strong first half results from its grocery business were offset by an unexpectedly weak performance at its Argos subsidiary.
Like-for-like grocery sales grew 0.3% excluding fuel and 6.3% including fuel with year-on-year fuel sales surging 62.7%. However, Argos sales were 7.3% lower for the half after a 12% slide in the last quarter due to sully chain issues and a drop in demand for home office equipment.
The company said it expects consumer behaviour to normalise in the second half and guided for underlying pre-tax profit of at least £660 million.
JD Sports Fashion (JD) said the latest CMA (Competition and Markets Authority) announcement regarding its acquisition of Footasylum ‘defied logic’ given that it agrees with the company’s assessment on two important grounds.
The two areas of agreement are that the main competition is now from direct to consumer operations of international firms and not Footasylum and secondly, the merger there will not result in a ‘substantial’ lessening of competition.
However, the CMA now requires JD Sports to unwind the acquisition of Footasylum, which closed in May 2019. The shares gained 3.1% to £11.16.
LOWER END OF GUIDANCE
Shares in medical products company Smith & Nephew (SN.) rallied 2.5% to £13.25 despite the company saying it expected to deliver full-year results at the bottom end of the range.
For 2021, the underlying revenue growth guided range was 10%-to-13%, and trading profit margin guided range was 18%-to-19%.
Third quarter revenues grew 5.5% to $1.26 billion driven by growth in its sports medicine & ENT (ear, nose, and throat) business of 8.3% and advanced wound management revenue of 12.1% offsetting a 0.7% decline in its orthopaedics business.
TASTY TREAT
Shares in food and beverage ingredients supplier Tate & Lyle (TATE) surged 5.3% to 683.2p after reporting strong first half growth with revenues up 19% and pre-tax profit up 20%.
The company said the transaction to create two focused businesses is on track for completion in Q1 of 2022 calendar year.
Tate increased the interim dividend by 2.3% to 9p per share.
Low-cost Hungarian based airline Wizz Air (WIZZ) said first half revenues increased by 86.8% to €880.4 million, as it swung back to a pre-profit of €410.8 million compared with a loss of €71.3 million.
Looking ahead, the company said it anticipated an operating loss in Q3 of around €200 million. The shares edged 1.4% lower to £47.49.
Shares in luxury car making Aston Martin Lagonda Global (AML) revved 2.7% higher to £18.00 after revenues jumped 173% to £736.4 million in the first nine months to 30 September.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) surged to £72.3 million compared with a loss of £117.6 million. The company reiterated its 2021 guidance and said it was making excellent progress on its transformation plan.
