UK stocks continued their recovery on Thursday helped by positive economic data and a revival across the mining sector, a major contributor to the leading FTSE 100 index, with Anglo American’s (AAL) 3% gain topping the early leader board.
At midday, the benchmark FTSE 100 was up 19 points or 0.3% at 7,127, with drug maker AstraZeneca (AZN) contributing to the rally after its Covid vaccine performed well in US trials.
‘STRONG’ START FOR DIAGEO
Drinks giant Diageo (DGE) was close to the top of the leaders board after the company made a ‘strong’ start to fiscal 2022, with organic net sale momentum across all regions. European business is recovering ahead of company expectations.
But the expectation that organic operating margins stand to benefit from a further recovery in sales volumes, positive channel mix and premiumisation trends got investors excited, lifting the share price 2.3% to £36.42.
Online fashion brand Boohoo (BOO:AIM) was a major casualty on Thursday, slumping 10% to 231.3p after dampening profit margin expansion hopes through the rest of the year.
First-half sales rose 20% to £975.9 million while gross profit rose similarly to £533.3 million, but elevated short-term cost headwinds experienced in the first half are expected to continue in the second six months.
That means that despite an expectation for full year sales growth of 20% to 25%, adjusted earnings before interest, tax, depreciation and amortisation margins are now expected to be 9% to 9.5%, compared to 9.5% to 10% as previously guided.
British American Tobacco (BATS) was a big FTSE loser as one of a handful of major stocks to go ex-dividend (where new investors lose the rights to the next dividend), as is the usual Thursday practice. BAT saw its share price fall 2.5% to £26.69.
Also in this category were housebuilder Barratt Developments (BDEV), down 2%, and medical products group Smith & Nephew (SN.), 0.4% lower.
SPEEDY GROCERCIES HEAT UP
Food delivery platform Deliveroo (ROO) and soon to go private Morrisons (MRW) announced the launch of Hop, a rapid grocery delivery service that promises to increase competition on this growing market.
Deliveroo stock rose 2% to 299.3p, with investors still cautious over the firm’s ability to turn revenue growth into profits.
Investors were all over shares of biotech Oxford Nanopore Technologies (ONT) sending them soaring more than 30% within minutes of their market debut on Thursday, indicating huge interest in life sciences companies listing in London.
The stock was trading at 605p having listed and debuted today at 425p, valuing the business at floatation at around £4.51 billion.
Also enjoying a strong start to trading was digital business Made Tech (MTEC), which opened at 130p and rallied to 147.5p.
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