Proactive Investors -
- FTSE 100 advances 50 points to 8238
- UK unemployment rate remains at 4.4%, wage growth 5.7%
- Frasers tops blue chips as profits impress
Green is the colour
All but two of the 30 largest FTSE 100 companies are in the green so far today.
Frasers remains top of the leaderboard after its results as adjusted PBT of £545 million was a sizeable beat to the consensus forecast of £515 million.
Analysts at Barclays (LON:BARC) say PBT guidance at the mid-point for the new year is 8% above its forecasts.
Schroders PLC (LON:SDR) is in second, up over 5%, after being upgraded by Morgan Stanley (NYSE:MS) as part of a review of the European asset management sector.
After underperforming the sector so far this year its valuation is well below the long-term p/e average and the group, the analysts believe, is better positioned for growth than rivals.
Less than 10 mins before the ECB announcement, European stocks are in relaxed mood, with the Euro Stoxx 600 up 0.39%.
Covid inquiry and climate reports published
The UK central and devolved governments "failed their citizens" in failing to properly prepare for the Covid-19 pandemic, according to a 240-page public inquiry report just published.
Health secretaries Jeremy Hunt and Matt Hancock both came in for criticism in the report, which said they failed to better prepare the country for the pandemic, which led to more than 230,000 UK deaths.
The report, which sums up the findings from an inquiry led by Baroness Heather Hallett, calls for a major overhaul in how the government prepares for civil emergencies.
The Covid pandemic "was not a black swan event," Hallett said in the report, with the previous government having "planned for the wrong pandemic".
In the report, she calls for a pandemic response exercise to be run at least every three years, a new civil emergency strategy to be put in place, and an independent statutory body to be established to advise the government, among other things.
This morning, the UK's Climate Change Committee also issued a report calling for action across all sectors of the economy as while the UK has met all its targets so far, the past year saw the previous government signal a "slowing of pace and reversed or delayed key policies".
"The new Government will have to act fast to hit the country’s commitments," it said, adding that renewables, heat pumps and EVs all need to become the norm if the UK is to get back on track for its targets.
FTSE leading European indices
Just over an hour ahead of the ECB meeting, London's blue-chip benchmark is still outperforming its European cousins, and after falls in recent days has been joined by its mid-cap sibling too.
The FTSE 100 is up 0.7%, while the FTSE 250 index has added 173 points or 0.8% to climb above 21,266.
Across the Channel, the major continental indices have picked up a bit after a slow start.
Germany's DAX is lagging still, up 0.15%, but the CAC 40 in Paris is up 0.55%, behind the FTSE MIB in Milan and IBEX 35 in Madrid, both rising over 0.6%.
The Euro Stoxx 600 has ticked up 0.34%, with top riser being Sweden's medical technology group Getinge, up 13%, followed by Volvo and Ocado (LON:OCDO), both up over 7%.
Looking across the pond, it's a mixed picture at the moment, with Dow Jones futures down 0.12%, S&P 500 futures up 0.12% and those for the Nasdaq flat.
Summing up the morning, analyst Dan Coatsworth at AJ Bell says: "A catastrophic day for US tech shares hasn’t caused widespread contagion on the markets."
"While the Nasdaq had a miserable day on Wednesday, only Japan’s Nikkei 225 caught a cold in response. Its semiconductor industry might be affected if the US government gets heavier with measures to stop China getting its hands on foreign chip technology.
"Take a step back and it looks like a market rotation is slowly bubbling up... Even the UK is getting more attention as the market is full of stocks offering growth at a reasonable price.
"That growth might be more pedestrian than what’s on offer in the US, yet it looks like we’re entering a phase where valuations matter more to investors, and the UK trumps the US on this basis."
He characterises the jump in the FTSE 100 being driven by gains in energy, pharma, banking and mining stocks.
Farage de-banking update
Banks have been told by the UK regulator to take more care handling high-profile politicians after NatWest’s dealings with Nigel Farage.
"Public service naturally comes with greater scrutiny. But it must be proportionate and shouldn't disadvantage people running for office or taking senior public roles, or their families," the FCA's executive director of markets and international, Sarah Pritchard, said in a statement this morning.
She adds that this "requires a balancing act" for banks, most of which "try to get it right but there is more they can do".
The FCA says it is following up with those that were getting the balance wrong to ensure they make changes.
Lloyds' TSB arm trims mortgage rates
TSB has announced new lower mortgage rates this morning, following NatWest (LON:NWG)'s moves yesterday afternoon.
TSB, which is part of Lloyds Banking Group PLC (LON:LLOY), trimmed residential, product transfer and additional borrowing rates.
This is despite markets having this week reduced expectations of a Bank of England rate cut in August to around 25% probability, though chances of a September cut are seen as having grown.
"Further rate cuts just shows the potential for a scramble within high street lenders over the summer, as they look to grab business with finer margins," says Justin Moy, managing director at EHF Mortgages.
"Though they may be slightly less imminent, lenders believe cuts to the base rate are still on the horizon. This shows that pricing is not all about the cost of funds. Lenders will also use pricing to manage workloads and may be in a better position to take volume over the coming months."