The FTSE 100 rallied back above the 7,000-mark once again in opening trade after Apple and Facebook both smashed quarterly forecasts and the US Federal Reserve maintained its ultra-accommodative monetary stance, with investor focus now switching to a bumper day for UK earnings.
The UK’s benchmark was around 0.7% higher at 7,010.36 at 9am, while the FTSE 250 made more modest gains, nudging 0.1% ahead to 22,465.01.
Early movers among UK blue-chips included healthcare equipment maker Smith & Nephew (SN.), Unilever (ULVR) and Standard Chartered (STAN), with NatWest (NWG) leading the loser board.
US stock futures rose to new all-time highs overnight after President Biden touted his big new stimulus and tax proposals in his first address in front of Congress. Earlier, the market had closed indifferently after the FOMC meeting saw the Fed sticking to its guns in its latest policy statement, vowing to not provide any tightening guidance until inflation and employment outcomes are sufficiently established and sustained to do so.
On Wall Street, the S&P 500 ended Wednesday down 0.08% at 4,183 while the tech-heavy Nasdaq Composite dipped 0.28% at 14,051.
Knock out earnings from tech titans Apple and Facebook, fuelled by lockdown sales of 5G iPhones and iPads, and booming online ads, lifted the investors mood after the close. Apple stock rallied nearly 3% after hours to $37.35, while Facebook jumped 7% to an all-time $328.80 high.
In Asia, Japan’s Nikkei gained 0.2% trading at 29,053 and Hong Kong’s Hang Seng was up 0.5% at 29,227. The Shanghai Composite was similarly up 0.2% at 3,464.
The pound continued its recent run against the dollar, edging up 0.15% at $1.3956, while gold rose 0.5% to $1,784 per ounce. Brent crude was also firmer, up 1.6% at $67.54 per barrel.
PROFITS SURGE AT SHELL
Royal Dutch Shell (RDSB) saw profits leap to $3.23 billion in the first three months of the year, allowing the and the energy giant to raise its dividend as planned.
But a warning that the outlook remained uncertain due to the pandemic kept share price gains in check, the stock up 1.2% at 13.998.
Consumer goods giant Unilever rose 3.6% to £42.26 after a pick-up in home cooking and a strong economic recovery in China drove better-than-expected quarterly sales. The company also announced a share buyback programme up to €3 billion.
Smith & Nephew led the blue-chips higher with a near 5% rally to £15.59 after reinstating full-year guidance as visibility improved thanks to the Covid-19 vaccine rollout programmes and healthcare systems reopening to non-urgent surgery.
The wound care and knee and hip implants specialist is targeting underlying revenue growth of 10% to 13% and profit margins of between 18% and 19%.
FINE THREAT HITS BANK
On the downside, NatWest led the fallers with a 3.5% decline at 196.05p in the wake of its interim management statement. Like other UK banks, NatWest has been able to release some of the provisions it had set aside to cover expected pandemic-related bad loans but a warning that a money laundering case could trigger a big bill saw investors take fright.
NatWest CEO Alison Rose’s efforts to clean up the lender’s, including ditching the scandal-tainted Royal Bank of Scotland name, hit a setback last month when regulators launched criminal money laundering charges against it.
If convicted, it could face an unlimited fine.
Crypto miner Argo Blockchain (ARB) nudged marginally higher to 187.5p after swinging into profit for the first time during 2020. The Bitcoin play reported a 120% jump in revenues during the year, adding that all of its mining machines have now achieved over 100% return on investment.
Retailer WH Smith (SMWH) slipped 1.2% to £18.595 after it warned of the possible risk of breaching its covenant tests in 2022 and launched a bond offer worth up to £325 million.
Lender Standard Chartered (STAN) added 3% to 509.6p after it reported upbeat first-quarter profit and said it will slash its global branch network by half, as it looks to cut long-term expenses.
ELSEWHERE ON THE MARKET
Mining giant Glencore (GLEN), which reported first-quarter production was broadly in line with its expectations as coal production fell and copper production increased, saw its share price remain flat at 303.45p. The company forecast full-year marketing earnings within the top half of guidance.
Weir (WEIR) expects to deliver growth in line with current market expectations as it confirms an 11% increase in group orders in Q1 as mining and infrastructure markets continue to strengthen. The update pushed its share price up 29.5 points to £19.71.
Gross inflows into St James’s Place (STJ) reached £4.79 billion for the first quarter of 2021, 19% higher than the same period last year as investor confidence improved and clients returned to longer-term investments. The statement provided a 2% boost to its share price, to £13.51.
Schroders’ (SDR) assets under management remained stable for the first quarter of 2021, reaching £672billion at the end of March, compared with £630billion at the end of 2020. Its share price fell 5 points to £35.56.
Insurance company Lancashire (LRE) said gross premiums written rose to a record for the March quarter, driven by growth in its property and casualty reinsurance segment. For the three months ended 31 March 2021, Gross premiums written increased by 46.1% year on year to $354.8 million. The news sent its share price up 3.2% to 701.75p.
Pershing Square (PSH) confirmed it will pay a second quarter dividend of 10cents, following its annual general meeting. The dividend will be paid on 18 June 2021. Its share price rose 7.5p on the back of the announcement, to £27.12.
