Stocks in London managed to end higher on Thursday despite a recession warning from the Bank of England overshadowing a historic rate hike of 50 basis points.
The FTSE 100 index closed up 2.38 points, at 7,448.06. The FTSE 250 ended up 136.92 points, or 0.7%, at 20,155.76. The AIM All-Share closed down 2.41 points, or 0.3%, at 922.72.
The Cboe UK 100 index closed up 0.1% at 743.80. The Cboe 250 rose 0.6% at 17,535.85. The Cboe Small Companies lost 0.5% at 13,882.40.
In mainland Europe, the CAC 40 stock index in Paris closed up 0.6%, while the DAX 40 in Frankfurt ended 0.6% higher.
In the FTSE 100, gambling firms Entain and Flutter Entertainment ended the best performers, up 5.2% and 3.8% respectively, in a positively read-across from US rival MGM Resorts.
MGM Resorts was up 3.5% in New York after it reported strong earnings late Wednesday. The Las Vegas, Nevada-based firm posted diluted earnings per share of $4.20 in the second quarter compared to $0.14 in the prior year quarter.
Glencore closed up 2.1% after the commodities house described its first-half financial performance as ‘exceptional’ notwithstanding a ‘very complex environment’ marked by global macroeconomic and geopolitical uncertainty.
For the six months to June 30, pretax profit skyrocketed to $16.01 billion from $2.01 billion in the prior year. The Baar, Switzerland-based commodity trader and miner said revenue rose by 43% to $134.44 billion from $93.81 billion.
Glencore said it will ‘top-up’ shareholder returns of $4.5 billion, comprising a $1.45 billion special distribution, or $0.11 a share, and a $3.0 billion share buyback. Total shareholder returns for 2022 amount to $8.5 billion, including the $3.4 billion base distribution and $0.6 billion buyback announced in February.
At the other end of the large-caps, Rolls-Royce ended the worst performer, down 8.5%, after the jet engine maker saw a wild swing to an interim loss.
For the half-year ended June 30, the engineering group reported a pretax loss of £1.75 billion, swinging from a profit of £114 million a year before. The company said the loss was due to £2.1 billion of net financing costs.
Revenue rose 8.5% to £5.60 billion from £5.15 billion a year earlier.
‘For a one-time champion of British engineering, the company is at a pretty low ebb. Today’s results demonstrate the size of the task facing the newly appointed chief executive, Tufan Erginbilgic,’ AJ Bell analyst Russ Mould commented.
‘If even a well-regarded figure like Warren East, who will hand over to Erginbilgic at the beginning of next year, can’t fix the business, then what hope is there for anyone else?’
Hikma was the second-weakest blue-chip performer, sliding 5.9%.
Hikma said revenue in the first half of 2022 inched down 0.2% year-on-year to $1.21 billion from $1.22 billion. Pretax profit fell by a third to $215 million from $319 million.
Worse, it cut its forecast for its Generics arm. It now guides for annual revenue there between $650 million and $675 million, down from the previous $710 million to $750 million range. The unit’s core operating margin will land between 15% and 16%, down from 20%.
Hikma blamed this on the ‘persistent challenges of the US generics market’.
Also hurting the FTSE 100, Mondi gave back 4.6%. The paper and packaging firm reported a strong rise in revenue in the first half, but warned inflation could hurt its costs in the second half of 2022.
In the six months to June 30, pretax profit surged to €933 million from €354 million, as revenue jumped 37% to €4.51 billion from €3.28 billion.
