Proactive Investors -
- FTSE 100 up 72 points at 8,099
- Legal & General ups divi despite flat profits
- House prices grow at fastest rate since January
Market downturn not a game changer, says analyst
The FTSE 100 is now up more than 70 points or 0.9% to 8,099, placing it 75 points behind where it was before Monday's drop.
Analyst Holger Schmieding at Berenberg has looked the market's most recent downturn with a slight sense of de ja vu.
"It is almost a pattern. Not for the first time, equity markets have fallen sharply just before the end of my summer holidays," he said.
"Even abstracting from economic fundamentals, dramatic market moves can impair the economic outlook by themselves if they affect financing conditions and depress business and consumer confidence.
"So far, serious damage still seems unlikely."
All in all, the market turbulence highlights the downside risk to the economic outlook and a chance that the Fed may ease by more than expected beforehand.
"But I do not see it as a game changer. At this stage, a genuine US recession and its negative implications for global markets and the world economy are still a tail risk rather than a scenario with a probability of more than 20%."
SoftBank launches buyback to ward of actvists
Japanese technology conglomerate SoftBank announced a 500 billion yen ($3.42 billion) share repurchase programme in the first-quarter financial results.
The announcement comes after famed activist investor Elliott Advisors built a minority stake in SoftBank, which owns British microchip giant Arm, in order to influence its shareholder return policy.
Whether the $3.4 billion announcement will keep Elliott happy remains to be seen; the firm has been pushing for a $15 billion buyback package, according to earlier reports.
The last share repurchase programme on SoftBank’s records was conducted nearly two years ago, when the group bought back 400 billion yen worth of shares between October and November 2022.
Virgin Atlantic ad banned
Virgin Atlantic has seen an advert highlighting the first fully sustainable fuel-powered transatlantic flight banned in the UK.
Ruling the advert would mislead customers over the airline’s environmental credentials, the UK’s Advertising Standards Authority (ASA) banned the radio feature on Wednesday.
“We considered most consumers were likely to be aware that aviation was a high carbon-emitting sector,” the advertising watchdog said in a statement.
“However, they were unlikely to be aware of the extent to which fuels described as sustainable aviation fuel still had negative environmental impacts.”
Analysts react to Legal & General results
Legal & General shares are nearly flat today following its results, but as the fourth most traded stock in the FTSE 100 in terms of volumes, analysts have been placing the insurer under the microscope.
Adam Vettese, at eToro, said: “Legal & General has inched over the line of beating consensus by 1% in a very steady if not uneventful set of results. Arguably this is exactly the kind of news investors want to hear after the week they have had given the recent global sell-off.
“Overall shareholders will be looking ahead to how new CEO Antonio Simoes' overhaul plan develops and if shares can recover some of the ground they have lost so far this year."
At Swiss bank UBS, analysts said most operating metrcis proved better than expected, but noted that "investment variances were a large negative, with -£417m within the core businesses and -£187m in non-core."
"We expect a small negative reaction given the large negative investment variance and low new business margins," added UBS, which is a buyer of L&G.
Russ Mould at AJ Bell said: “There may not have been too much to get investors excited in the financial results themselves... However Legal & General continues to deliver on a key metric which matters for shareholders – dividends."