UK markets remained modestly on the back foot at lunchtime on Thursday as investors turned their attention towards the annual meeting of US Federal Reserve bankers and a speech by chairman Jerome Powell.
Sterling held firm at $1.3193, close to its recent highs after its best weekly performance since June.
Brent crude oil prices dipped slightly through the morning session but remain close to five-month highs of $46 per barrel as hurricane Laura forced the closure of most production and refining facilities in the Gulf of Mexico.
Gold on the other hand slipped to $1,9185 per ounce as investors took profits as investors booked gains ahead of the Federal Reserve meeting.
DAMAGE CONTROL AT ROLLS
The benchmark FTSE 100 index of leading stocks gave up 11 points, or 0.18%, at midday to slip to 6,034.55 as gains in leisure, media and mining stocks were offset by a heavy fall in shares of Rolls-Royce (RR.).
The aerospace firm was the worst large-cap performer, sinking 7% to 235.1p after posting an underlying loss of £3.2 billion for the first half of the year due to a collapse in revenues at its civil aerospace division as the coronavirus pandemic grounded flights worldwide.
The company said it had agreed £2 billion of new funding and was preparing to sell £2 billion worth of assets including its Spanish unit ITP Aero in order to bolster its balance sheet.
However, it also announced that finance director Stephen Daintith had resigned in order to take up the same role at online grocery delivery firm Ocado (OCDO).
STOCKS ON THE RISE
Media giant WPP (WPP) was the best performer in the FTSE, gaining close on 4% to 648.1p after it announced it would pay a 10p per share interim dividend despite posting a pre-tax loss of £2.58 billion for the six months to June.
Revenues were down 11.5% on a like for like basis to £5.58 billion during the period, while earnings were impacted by £2.7 billion of impairments as the firm wrote down the value of acquisitions to account for lower industry growth and the effects of Covid.
Rival media firm M&C Saatchi (SAA:AIM) lost some of its earlier momentum but remained nearly 5% higher at 64p after it revealed it had traded ‘well and profitably’ in the opening weeks of the second half with several significant new contracts.
Investors were also reassured by the firm’s net cash position and the news it would report its final 2019 results by the end of next month.
Shares in betting firm Flutter Entertainment (FLTR) added 1.7% to £127.95 after it reported a 35% increase in half-year earnings, as a jump in the number of ‘recreational customers’ entertaining themselves at home playing poker and gaming online offset a lack of sports events.
Revenues increased 49% thanks to the merger with Stars Group, while adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) reached £684 million.
Shares in building products distributor Grafton (GFTU) gained more than 5% to 785.5p despite a 61% fall in first half operating profits from continuing operations as the firm said it had seen a ‘strong recovery’ in the repair, maintenance and improvement (RMI) industry since the end of lockdown.
BELLWETHER DOWN
Recruitment firm Hays (HAS) lost earlier gains to nudge 1% lower to 116.05p after posting an 11% drop in full year net fee income after a brutal final quarter to the end of June when fees fell 35%. The firm also scrapped its final dividend for the financial year just ended.
Still, investors were heartened that given the collapse in fees in the fourth quarter the firm managed to break even and that it had seen ‘modest signs of improvement’ in permanent hiring since the beginning of July.
Language translation software firm SDL (SDL) rocketed 40% to a record 838p after accepting an all-share buyout offer that values the business at £854 million. The deal has been struck with technology business RWS (RWS:AIM), which is listed on the AIM junior market. RWS saw its stock fall 7% to 692p.
Onesavings Bank (OSB) was the day’s biggest mid-cap winner, jumping nearly 17% to 303.9p after reporting a more robust pandemic-hit first-half than anticipated by investors. Statutory profit before tax increased by 10% to £99.3 million while the retail savings bank grew its net loan book 2% to £18.5 billon.
Technical products and services provider Diploma (DPLM) said performance had started to recover following coronavirus-led weakness in the third quarter of the year. The period running from April to June 2020 was impacted by the COVID-19 crisis with revenues down 12% on a reported basis and down 21% on an underlying basis.
Cruise operator Carnival (CCL) said it was extending its pause of operations in Australia through December owing to the continued progression of COVID-19. The news nudged shares lower by 1.4% to 955p.
Anglo Pacific (APF) maintained its dividend despite swinging to a first-half loss as royalty revenue was hurt by the 'significant decrease' in coal prices during the second quarter caused by the COVID-19 pandemic.
Gaming content developer Gaming Realms (GMR:AIM) secured its first multi-state direct-integration agreement with its existing partner Rush Street Interactive as it continues to focus on increasing its presence in the US. The news boosted its shares by 5.4% to 23.3p.
