Stocks made further gains on Wednesday after Fed chairman Jerome Powell repeated his view that price pressures in the US economy were temporary and confirmed the central bank would not raise interest rates pre-emptively.
US markets rallied with the Nasdaq 100 tech index making a new all-time high, helped by gains in drugmaker Moderna and chipmaker Nvidia.
By 8.30am the FTSE 100 index was up 18 points or 0.2% at 7,108 points led by miners and leisure stocks, while house builders and healthcare stocks lagged.
Oil prices moved higher as US stockpiles showed another large decline, with Brent crude futures gaining 0.9% to $75.30 per barrel, while gold remained in the doldrums at $1,778 per ounce.
Sterling edged higher to $1.3925 as the dollar eased on chairman Powell’s pledge not to raise rates quickly while Bitcoin recovered to $34,000 after dropping below $30,000 at one point yesterday, erasing its gains for the year.
COMPANY NEWS
House builder Berkeley Group (BKG) posted a small rise in pre-tax earnings for the year to April, up 2.9% to £518.1 million, having ended the year with net cash of £1.1 billion and cash due on forward sales of £1.7 billion.
The firm’s land bank has capacity for 63,000 new homes of which 70% are on 29 large regeneration sites, with 23 of the sites already in production giving good visibility of revenues for the next few years. Shares reversed 2% to £45.52, making them the second-worst performers in the FTSE.
Rival house builder Persimmon (PSN) said it had reached an agreement with the Competition and Markets Authority to limit the price of freeholds to £2,000 until the end of 2026, and to reimburse leaseholders who paid more than £2,000 for their freeholds.
The move comes after the CMA investigated the practice of builders selling leasehold properties and then charging owners unfair prices to purchase the freehold. Shares in Persimmon dipped 1% to £29.96.
Safety and compliance group Marlowe (MRL) posted a 15% rise in revenues and a 33% rise in operating profits for the year to March thanks to good underlying progress and several strategic acquisitions.
The firm is up to a current 12-month run rate of £280 million in revenues, 83% of which are recurring, and is targeting £500 million of annual revenues by the end of its 2024 financial year. Shares edged up 0.4% to 850p.
Swiss insurance giant Swiss Re sold half of its 13.25% stake in UK insurer Phoenix Group (PHNX) for £437 million via an accelerated book-building process led by Bank of America, Citigroup and HSBC.
The placing of 66.2 million shares took place at 660p against a closing price of 693.6p and leaves Swiss Re with a further 66.2 million shares, although it is restricted from selling for 90 days. Phoenix shares dipped 3% to 672p, making them the worst performers in the FTSE.
Shares in Liontrust Asset Management (LIO) gained 0.6% to £16.40 after the company posted a 54% increase in revenues and a 69% increase in profits for the year to March, on the back of a 92% rise in assets under management to £30.9 billion.
AIM ROUND-UP
Credit hire and legal services firm Anexo (ANX:AIM) announced it had been approached by private equity investor DBAY with an offer for the firm pitched at 150p per share against a closing price yesterday of 137p.
The company said it had opened its books to allow DBAY to carry out due diligence, which suggests it is prepared to strike a deal. Shares added 5% to 143.7p.
Lifestyle group Joules (JOUL:AIM) raised its estimates for sales and earnings for the year to the end of May thanks to increased customer numbers and better than expected trading at its stores post reopening.
Revenues are now seen rising 4% to £199 million against forecasts of below £190 million while pre-tax profits are expected to be between £5.5 million and £6.5 million against a top estimate of £5.3 million. Shares eased 3% to 276.5p.
Litigation financing firm LCM (LIT:AIM) announced it would finance a claim for over £83 million against French electricals retailer Darty as part of efforts to recoup monies for creditors of the failed UK electricals group Comet. Shares jumped 7% to a new high of 117.5p
Retailer Vertu Motors (VTU:AIM) boosted its profit guidance for the full year on stronger than expected sales of used vehicles. The firm sees pre-tax earnings in the region of £28 million to £32 million against a current consensus of £24 million. Shares accelerated 6% to 48.8p.
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