The FTSE 100 was in the green on Friday amid mostly strong company earnings, following the week’s three major central bank decisions.
The FTSE 100 index opened up 21.41 points, 0.3%, at 7,714.17. The FTSE 250 was down 90.04 points, 0.5%, at 19,183.33, and the AIM All-Share was down 1.13 points, 0.2%, at 768.16.
The Cboe UK 100 was up 0.1%, the Cboe UK 250 was down 0.5% at 16,860.93, and the Cboe Small Companies was up 0.1% at 13,816.04.
In European equities on Friday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 0.1%. French equities failed to get a boost from a stronger-than-expected gross domestic product print, and returned some of their gains from Thursday.
The French economy saw a surprisingly robust performance in the second quarter of this year, growing by 0.5% from the first quarter, the statistics office announced.
The figure was well above the INSEE statistics office’s own forecast of 0.1% growth for April to June and the expectations of analysts. It was also ahead of the 0.2% quarter growth seen in the first quarter.
Meanwhile, stocks in the FTSE 100 were outperforming their continental counterparts.
Standard Chartered was the top performer, up 5.4%.
The Asia-focused bank launched a new $1 billion share buyback programme, as it reported a 20% rise in profit in the first half of 2023 and raised its guidance for the full year.
Pretax profit in the six months that ended June 30 was $3.32 billion, up 20% from $2.77 billion a year before. Operating income increased by 11% to $9.13 billion from $8.23 billion, and StanChart also benefitted from a reduced credit impairment of $161 million, down from $263 million a year before.
StanChart declared a 6 cents per share ordinary interim dividend, up 50% from a year before.
NatWest’s interim results received a more muted reception, however, with its shares rising 0.3%.
Fresh from scandal, the bank touted its ‘robust balance sheet, with a high-quality deposit base, high levels of liquidity and a well-diversified loan book’. In the first half of 2023, total income rose to £7.73 billion from £6.22 billion a year before, as net interest income came in at £5.73 billion from £4.33 billion. Operating pretax profit climbed to £3.59 billion from £2.62 billion. It declared an interim dividend of 5.5 pence and intends to begin a buyback of up to £500 million in the second half, in addition to the £1.3 billion buyback completed in the second quarter.
The results come amid the dramatic fallout in the row sparked by Nigel Farage over the closure of his Coutts bank account, which culminated in the resignation of NatWest CEO Alison Rose and the boss of Coutts, which is owned by the banking group.
AstraZeneca rose 3.4% as it said pretax profit surged to £4.35 billion in the first half 2023, from just $800 million a year before. Revenue rose edged up to $22.30 billion from $22.16 billion. The company reported significantly lower cost of sales, down 41% to $3.87 billion from $6.51 billion.
‘Each of our non-Covid-19 therapy areas saw double-digit revenue growth, with eight medicines delivering more than $1 billion of revenue in the first half, demonstrating the strength of our business,’ said CEO Pascal Soriot.
In the FTSE 250, Vanquis Banking plunged 25%.
The lender swung to a pretax loss of £14.5 million in the first half, from a profit of £46.9 million the year before. Total income slipped to £237.1 million from £240.3 million.
Sterling was quoted at $1.2782 early Friday, down from $1.2865 at the London equities close on Thursday. The euro traded at $1.0963, lower than $1.0996.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 0.4%, having fallen as low as 2.4%. The yen strengthened following a policy adjustment from Japan’s central bank.
The Bank of Japan said it will allow ‘greater flexibility’ in controlling bond yields, as it raised its full-year inflation forecast to 2.5% from its previous estimate of 1.8%.
It said it would continue to allow 10-year JGB yields to ‘fluctuate in the range of around plus and minus 0.5 percentage points from the target level, while it will conduct yield curve control with greater flexibility regarding the upper and lower bounds of the range as references, not as rigid limits,’ the central bank said in a statement. The bank also kept its short-term interest rate target unchanged at minus 0.1%.
Against the yen, the dollar was quoted at JP¥139.10, down versus JP¥141.07.
In China, the Shanghai Composite closed up 1.8%, while the Hang Seng index in Hong Kong was up 1.4%. The S&P/ASX 200 in Sydney closed down 0.7%.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.7%, the S&P 500 down 0.6% and the Nasdaq Composite down 0.6%.
Equities had earlier made a bright start after figures showed the US economy grew by more than expected in the second quarter of 2023, according to the first estimate from the US Bureau of Economic Analysis.
Quarter-on-quarter gross domestic product in the US increased 2.4% on an annualised basis in the second quarter of the year. In the first quarter, real GDP increased 2.0%, showing that the US economy has gathered some momentum.
Investors will have a keen eye on the US personal consumption expenditures reading at 1330 BST, which contains the latest core personal consumption expenditures deflator - the Federal Reserve’s preferred metric of inflation.
Friday’s economic calendar also has a German GDP reading at 0900 BST and an inflation reading from the eurozone’s largest economy at 1300 BST.
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