UK and European stock markets enjoyed a day of strong gains on Tuesday as investors took a risk-on approach in the face of speculation in Washington that President Trump could introduce a capital gains tax cut to create jobs.
UK stocks shrugged aside latest employment data which showed the number of people in work in the three months through June fell by 220,000, the biggest quarterly decline since the global financial crisis over a decade ago.
By the close, the benchmark FTSE 100 had lost some of its earlier rally but still ended the day 1.7% higher at 6,154.34, led by some strong earnings reports and select travel and leisure stocks.
Crude oil prices continued to inch higher with Brent futures gaining 0.4% to $45.16 per barrel while gold dipped back from recent record highs, trading at $2,030.30 per ounce.
RAMPANT INVESTOR ACTIVITY
Online trading platform Plus500 (PLUS) soared more than 10% to £13.87 after the firm reported first half pre-tax earnings of $363.2 million compared with $63.9 million the previous year as revenues more than tripled from $148 million to $564.2 million.
The company declared an interim dividend of $0.95 or 72.6p per share, more than three times the year-ago level, and said it would buy back up to $57.3 million or £43.8 million of its shares.
Shares in Intercontinental Hotels (IHG) jumped nearly 5% to £41.93 even as the firm missed forecasts with its first half results and cancelled its interim dividend.
For the six months to 30 June revenues fell 45% to $11.2 billion, worse than expected after revenues per available room (RevPAR) fell 75% in the second quarter, and the firm posted a pre-tax loss of $275 million compared with a profit of $375 million in the first six months of last year.
House builder Bellway (BWY) also ditched its interim dividend as sales for the year to 31 July fell due to lockdown. The company sold 7,522 new homes over the period compared with 10,892 the previous year, with an average selling price little changed at £293,000.
The shares nudged around 1% lower to £25.41 after the update.
Shares in Domino’s Pizza (DOM) slid 1.4% to 320.8p even as the firm delivered a 13.5% rise in first half operating profits to £45.8 million and reinstated its dividend.
Domino’s said system sales for the six months to the end of June were up 5.5% to £628.9 million thanks to a jump in online orders in the second quarter. The firm said it would pay its deferred 2019 final dividend of 5.56p per share next month after it had seen an ‘encouraging’ start to the second half.
SDL SPARKLES
Broker Peel Hunt reversed its forecast downgrade for language translation services business SDL (SDL) after the firm’s impressively robust half-year performance.
SDL’s revenues during the first half to 30 June were nowhere near as badly affected as anticipated by the pandemic, dipping just 1% (2% at constant currencies) to £181 million.
Meanwhile, prior technology investments drove gross margins from 51.5% to 52.2%, and with some disciplined cost control measures put in place, it meant adjusted operating profit rose from £16.1 million to £16.3 million.
SDL shares rattled almost 20% up to close at a post-Covid high 556p.
Gambling company Gamesys (GYS) jumped 9% to £11.20 after it lifted its outlook on annual performance and declared its first dividend as profit was bolstered by a pandemic-led jump in revenue.
Oil services group Petrofac (PFC) romped 6% to 175p despite swinging to a first-half loss after the Covid-19 crisis prompted a sharp fall in crude prices and dried up development activity in the energy sector.
Wealth manager Quilter (QLT) reversed 1% to 148.9p, having declared a 1p per share dividend, at the lower end of its target range, after its underlying first-half profit fell 20%.
Cellular materials technology company Zotefoams (ZTF) leapt 15% to 410p even as it posted a 45% fall in first-half profit.
Zotefoams held its dividend steady, citing cost cutting, while forecasting an improved revenue performance in the second half.
Advanced materials manufacturer Versarien (VRS:AIM) endured a topsy-turvy day, finally ending 2.5% down at 40.5p as investors digested deeper annual losses, falling sales and higher staff costs.
