Proactive Investors -
- FTSE 100 makes strong early progress
- US banks pump US$30bn into First Republic
- BT (LON:BT) falls as Ofgem probes broadband offer
FTSE 100 extends gains as a degree optimism returns
The Footsie has extended its gains, now up 72.97, or 0.98%, at 7,483.00.
Analysts at Deutsche Bank led by Jim Reid said: “Some optimism has returned to markets over the last 24 hours, with bank stocks stabilising on both sides of the Atlantic and two-year yields surging back.”
“Even the European Central Bank’s decision to pursue a 50bp hike went without incident, and investors grew in confidence that the Fed would follow up with their own 25bps hike next week, so we’re starting to see a modest change in the mood music.”
“It’s also telling this morning that in Asia, US yields and equity futures are fairly stable.”
However Reid noted: “The concerns haven’t gone away though, as while Credit Suisse saw its equity price increase, its bonds/CDS were generally flat to weaker…”
In London, banks are firmer. Lloyds (LON:LLOY), Barclays and NatWest are up 2.4%, 1.8% and 1.4%. The European Stoxx 600 banks index is up 1.9% while the CAC 40 in Paris was up 1.1% and the DAX 40 in Frankfurt rose 0.9%.
Rising crude prices supported BP and Shell shares. The oil majors rose 4.2% and 3.5%, placing them top of the FTSE 100’s risers.
BP 's shares rose despite, a US federal investigation finding that a BP subsidiary violated workplace safety practices, leading to the deaths of two workers.
The investigation concerns an incident that caused fatal burns to two workers in an Oregon, Ohio refinery's crude unit, operated by BP Products North America. The regulator proposed a fine of US$156,250.
Oil prices were supported by reports that Russian and Saudi Arabian officials met to discuss stabilising the market. Brent crude was trading 0.6% higher at US$75.09/barrel.
GSK buoyed by Deutsche upgrade
GSK PLC’s shares jumped 1.4% in early exchanges in London supported by an upgrade by Deutsche Bank .
The German investment bank has put the FTSE 100-listed pharma giant on its ‘buy’ list and increased its price target by 13% to 1,700p.
Analyst Emmanuel Papadakis taken a look at the prospects for the group’s anti-viral drugs in HIV, RSV and hepatitis B and raised sales and EBITDA forecasts as a result.
The broker noted GSK trades at a 4% dividend/9% free cash flow yield, 9x financial year 2023 P/E for +3/+8% sales/EPS compound annual growth rates through 2022-26 which it thinks leaves GSK looking attractive.
“We think GSK is too cheap if there is any semblance of sustainability through FY27/28, something we now think is probable courtesy of long acting injectables in HIV and RSV, with potential upside from bepirovirsen in HepB.”