Stock prices in London were higher at midday Tuesday, amid good news for the UK’s construction sector, as investors await the performance of stocks in New York.
Markets across the globe took a hit on Monday, with investors digesting last week’s economic data from the US.
The FTSE 100 index was up 9.13 points, 0.1%, at 8,017.36. The FTSE 250 was up 84.80 points, 0.4%, at 20,321.54, and the AIM All-Share was up 7.01 points, 0.9%, at 755.63.
The Cboe UK 100 was up 0.2% at 800.30, the Cboe UK 250 was up 0.4% at 17,808.24, and the Cboe Small Companies was up 0.1% at 16,539.65.
In European equities on Tuesday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.2%.
“There will be some relief this morning as the FTSE 100 and other European indices arrested the recent market rout and eked out some solid gains after stocks rebounded overnight in Asia,” says AJ Bell investment director Russ Mould.
“Fears about a sharp recession in the US, engendered by weak jobs data, remain and the unwinding of the yen carry trade may continue to play out, although whether the market moves are being exacerbated because many traders are on the beach is an open question.
“The next key test will come with the market open in the US this afternoon, with futures prices suggesting a recovery rally will take hold on Wall Street too.‘
Stocks in New York were called to open higher. The Dow Jones Industrial Average and the Nasdaq Composite were both called up 0.2%, the S&P 500 index is called up 0.3%.
On Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 2.6%, the S&P 500 down 3.0% and the Nasdaq Composite down 3.4%.
Monday’s global stock sell-off has fuelled calls for the US Federal Reserve to lower interest rates swiftly and decisively, with some analysts now calling for it to make an emergency cut before its September rate decision.
Fed Chair Jerome Powell signalled last week that the first rate cut could come ’as soon as‘ September.
But some analysts fear that may not be soon enough, as the markets have responded in dramatic fashion to last week’s below-target US jobs report, which raised fears that the US was entering a recession.
The pound was quoted at $1.2685 at midday on Tuesday in London, lower compared to $1.2753 at the equities close on Monday. The euro stood at $1.0905, lower against $1.0946.
Against the yen, the dollar was trading at JP¥144.85, higher compared to JP¥142.41.
In the UK, there was some good news for the construction sector.
The headline S&P Global UK construction purchasing managers’ index rose to 55.3 in July from 52.2 in June. This was ahead of FXStreet expectations, with markets expecting the reading to come in at 52.7.
Remaining above the 50.0 no-change mark for the fifth consecutive month, the latest reading signalled a sustained improvement in overall construction activity in the UK.
Further, S&P said the rate of expansion was the fastest since May 2022.
‘The election-related slowdown in growth seen in June proved to be temporary, with the pace of expansion roaring ahead in July. Firms saw the strongest increases in new orders and activity since 2022 as paused projects were released amid reports of improved customer confidence,’ said Andrew Harker, economics director at S&P Global Market Intelligence.
‘The strength of demand moved the sector closer to capacity, bringing a recent period of improving supplier performance to an end. There were also signs of inflationary pressures picking up, something that will need to be watched closely if demand strength continues in the months ahead.’
In the FTSE 100, InterContinental Hotels edged up 1.4%.
The Berkshire, England-based hotel operator said revenue in the first half of the year was $2.32 billion, up 4.3% from $2.23 billion a year before. Pretax profit, however, fell 17% to $472 million from $567 million.
IHG explained that pretax profit includes a system fund and reimbursables loss of $10 million compared with a $87 million profit a year ago. This was driven by a planned reduction of prior system fund surplus.
On the other hand, Rightmove lost 4.8%.
The Milton Keynes, England-based online property portal said market conditions in the lettings market remain ‘fluid’, as it disclosed the contract with lettings agent OpenRent will not be renewed.
Rightmove said the deal with OpenRent will end at the start of September after they failed to agree renewal terms.
Rightmove said OpenRent accounted for less than 8% of its lettings listings in July.
Panmure Liberum analyst Sean Kealey said the news will play into fears that Rightmove’s pricing power is weakening.
In the FTSE 250, Keller jumped 10%.
The London-based geotechnical engineering company said pretax profit surged to £95.3 million in the first half of 2024 from £43.1 million a year prior.
Revenue climbed 1.6% to £1.49 billion from £1.47 billion. Keller’s order book edged up to £1.6 billion from £1.5 billion.
The company declared an interim dividend of 16.6 pence per share, up 19% from 13.9p a year prior.
Chief Executive Officer Michael Speakman said Keller now expects its performance for 2024 to be materially ahead of current market expectations.
Domino’s Pizza fell 7.1%.
Domino’s Pizza said pretax profit fell 35% to £59.4 million in the first half of 2024 from £91.5 million a year prior. Underlying pretax profit however edged up 0.8% to £51.3 million from £50.9 million.
The company upped its interim dividend by 6.1% to 3.5 pence per share from 3.3p a year prior.
Separately, Domino’s announced a new £20 million share buyback programme, aimed at reducing the company’s share capital.
On London’s AIM, YouGov jumped 17%.
The market research and data analytics company reported that financial 2024 results are expected to be slightly ahead of revised guidance.
Revenue is expected to be between £327 million and £330 million, up from £258.3 million in financial 2023. Adjusted operating profit is expected to be between £43 million and £46 million, down from £48.3 million.
Brent oil was quoted at $76.60 a barrel at midday in London on Tuesday, up from $75.60 late Monday.
Gold was quoted at $2,413.90 an ounce, lower against $2,418.90.
Still to come on Tuesday’s economic calendar, there is data on the US trade balance out at 13:30 BST.
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