Address

Precise Investors

Trading

UK markets gain as trade optimism weighs on US-China worries

US-China

At the close, the benchmark FTSE 100 index was close to 1.3% ahead at 6,144.25, with the mid cap FTSE 250 rallying similarly to 17,143.62

The rally in global equities continued on Wednesday with UK markets matching gains seen across much of Europe, closing firmly on the front foot.

At the close, the benchmark FTSE 100 index was close to 1.3% ahead at 6,144.25, with the mid cap FTSE 250 rallying similarly to 17,143.62.

A balancing act was at play on Wednesday, between negatives like US/China tensions, returning political turmoil in Hong Kong and economic hardships caused by the pandemics, and positives that included lockdown-easing measures that were bolstered by news of a €750bn EU recovery fund on top of a €1.1trn budget.

US shares made decent gains in early trade on Wednesday, with the Dow adding another 1% to 2% Tuesday gains, and the S&P 500 also ahead, trading fractionally above 3,000 for the first time since 5 March. But the positives on Wall Street were not total, with the tech laden Nasdaq facing modest selling pressure and dipping 0.8% to 9,266.90.

Gold was weaker, testing $1,700 again as US yields rallied on economic reopening, but 10 year Treasury yields peeled back off the highs at 0.7% due, maybe, to the US/China tensions.

Engineering businesses led the day’s gainers, with Melrose, Meggitt and Rolls-Royce jumping between 12% and 10%, while various leisure and restaurant operators were strong, including Garfunkel’s-owner Restaurant Group, up 17% to 61.6p.

Hard hit travel related stocks were also strong, with cruise operator Carnival soaring 8% to £11.96, and retirement services supplier Saga, which also runs cruises, soaring 27% to 22.26p.

Housebuilder Barratt headed the FTSE loser board, sliding a little shy of 6% to 502.8p, while grocery technology and delivery business Ocado was also weak, falling more than 3% to £20.37, albeit, after a stunning rally of late.

Popular online fashion seller Boohoo managed to nip any run on its share price in the bud after launching a staunch defence of its financials and operating model.

Shares in the business fell 9% on Tuesday after coming under attack from short seller Shadowlands. The stock nudged 1% lower on Wednesday to 334.9p, having more than doubled since March.

Elsewhere, soft drinks maker Britvic rose 6% higher to 763.5p as cost cutting helped it post a rise in first-half profit.

The maker of Robinsons and Tango drinks deferred a decision on paying a dividend until later in the year.

Subprime lender Provident Financial jumped 6% to 194.4p, even as it reported a fall in new customer numbers, having tightened its lending standards in the wake of the Covid-19 crisis.

Provident Financial also touted the strength of its balance sheet and said it was holding regulatory capital some 33% above the minimum regulatory requirement.

Property developer British Land rallied more than 7% to 408p despite it reporting wider losses on lower rental income, as the Covid-19 pandemic heaped further pressure on struggling retailers.

Shopping centre owner Hammerson stayed largely flat at 74.32p after David Atkins decided to step down as chief executive after a 10 year stint in the hot seat.

Wealth manager St. James’s Place jumped more than 8% to 950p on announcing that it had boosted its funds under management during the month of April on-year, assisted by positive net inflows.

Services provider to the housing sector Mears rose nearly 3% to 170p as it swung to a full-year loss, having written down the value of discontinued domiciliary care operations.

Normalised profit at Mears edged up 1%, on the back of higher revenue.

Pawnbroker Ramsdens saw earlier big gains eroded somewhat but still ended the session more than 3% higher at 146p after it reported a 30% rise in annual profit as it boosted foreign exchange, jewellery and pawnbroking revenue.

Ramsdens didn’t declare a final dividend, citing Covid-19 pressures that have forced the closure of its stores.

Petropavlovsk plunged 6% lower to 23.7p as the Russia-focused gold producer booked a modest fall in annual profit after higher sales were offset by one-off expenses.

Detection technology supplier Kromek soared 15% to 23.25p, having won a $5.2m contract extension from the US Department of Defence to detect and identify pathogens in an urban environment.

Compliance and energy services group Sureserve reversed earlier losses to rally close on 5% to 44.5p despite posting a rise in first half profit, as higher sales at its compliance division offset a weaker energy performance.

Luxury furniture retailer Walker Greenbank jumped 10% to 38.5p, having moved to restart manufacturing at its two UK factories.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Leave a Reply

12 − 9 =