UK blue-chip stocks make early gains in early trade on Wednesday with the FTSE 100 up 0.7%, or roughly 48 points, to 6,996 despite heavy losses in US and Asian markets overnight.
Across the pond the US S&P 500 and Nasdaq 100 indices both posted heavy declines, falling by about 1.8% a piece as leading global technology stocks, including Apple, Amazon and Facebook, continue to come under selling pressure.
China’s Shanghai Composite index fell even more, down 2.1%.
The UK stock market is getting support today from select miners, with the likes of Antofagasta (ANTO) - up 1.3% to 805p, Anglo American (AAL) (up 1.2% to £16.85) and Glencore (GLEN) 1% ahead at 299p, all helping to lift the UK's leading index.
Banks are also providing a helping hand, with Standard Chartered (STAN), HSBC (HSBA), Barclays (BARC) and RBS (RBS) all posting gains of around 15 to 2% in early trade.
STRONG FIRST HALF FROM JOHNSON MATTHEY
On the corporate news front, chemicals firm Johnson Matthey (JMAT) tops the FTSE 10-0 leader board after posting firm half-year results that leads to greater optimism over full year profit targets.
First half sales were up 10% to £7.1bn but operating profits grew faster, up 19% to £264m. This means full year profits are likely to be at the top end of the company’s guidance.
Johnson shares rally 8% to £30.18, although still a far cry from September highs of £36.00-plus.
Leading the losers on the FTSE is accounting software firm Sage (SGE), down 5% to 510p. Full year results were in line with market estimates but the company cautioned that its push towards a subscription, cloud-based model would mean lower margins in the short term.
This is the second nasty surprise for investors in less than three months after chief executive Stephen Kelly unexpectedly quit in September.
GLOOMY PROSPECTS AT BABCOCK
Bottom of the FTSE 250 once again is outsourcing firm Babcock (BAB), down 12% to 523p, after its half year update disappoint on unexpected provisions and a worse outlook for its nuclear business.
Revenues in the first half were down 3% to £2.25bn but operating profits were down 71% to just £49m after provisions of £120m for its oil and gas business and restructuring across its other businesses.
In addition the company now sees zero revenues from the Magnox programme beyond August 2019 as the Nuclear Decommissioning Authority’s procurement strategy is yet to be finalised.
Shares in pharmaceutical-maker Indivior (INDV) fall another 10% to a new all-time low of 98p after yesterday’s gut-wrenching 47% collapse.
The company has issued a detailed response to the FDA’s decision to allow US drug-maker Dr Reddy’s to manufacture and sell a generic rival to its suboxone anti-opioid treatment.
It intends to keep fighting the ruling but it admits that the entry of a generic rival would cause a ‘rapid and material loss of market share’ for suboxone. In previous instances where a generic has been approved, branded drugs have lost 80% of their market share within a matter of months.
POOR UK AND FRANCE, AGAIN
Joining the losers is Kingfisher (KGF), which continues to disappoint both in the UK and in France. Its third quarter update shows B&Q sales down 2.8% to £850m and sales at its Castorama unit down 8.5% to £573m.
The company’s strategy to fix Castorama seems to rely on cutting prices and ramping up spending on advertising but it admits there is no ‘quick fix’. Investors head for the exit sending the shares down 3% to a new 12-month low of 238p.
There was happier news from brewer and pub operator Marston’s (MARS) with full year sales up 15% to £1.1bn and operating profits up 16% to £182m.
Poor weather hampered sales at the start of the year but the FIFA World Cup and ‘barbecue summer’ boosted second half sales especially at pubs focused on drink rather than food (known as ‘wet-led’). Shares hold steady at 98p.
