London midday: FTSE maintains gains as JD Sports surges

22nd Aug 2024 11:12

(Sharecast News) - London stocks were still in the black by midday on Thursday, with JD Sports surging ahead after a well-received update, as investors eyed a speech by Federal Reserve chair Jerome Powell.

The FTSE 100 was up 0.2% at 8,302.17.

Powell is due to make a speech in Jackson Hole, Wyoming, on Friday, at the Federal Reserve's annual conference of central bankers.

Philip Marey, senior US strategist at Rabobank said Powell is likely to signal a 25 basis points rate cut for September.

Marey said that with a full round of data between Jackson Hole and the September FOMC meeting, "it would be premature" for Powell to signal the exact size of a rate cut.

"However, he could indicate whether the baseline is 25 or 50 basis points. By expressing confidence in market stability and by indicating that the Fed is not behind the curve, he could indicate that 25 bps is the baseline scenario for September, rather than the 50 bps that some in the market want."

On home shores, a survey out earlier showed that activity in the private sector hit a four-month high in August.

The S&P Global flash PMI composite output index rose to 53.4 from 52.8 in July, hitting a four-month high and coming in above expectations for a reading of 52.9. A reading above 50.0 signals expansion, while a reading below indicates contraction.

Meanwhile, the services PMI printed at 53.3 in August versus 52.5 the month before. This was also a four-month high.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data.

"Both manufacturing and service sectors are reporting solid output growth and increased job gains as business confidence remains elevated by historical standards.

"Although GDP growth looks set to weaken in the third quarter compared to the impressive gains seen in the first half of the year, the PMI is indicative of the economy expanding at a reasonably solid quarterly rate of around 0.3%.

"Inflationary pressures have meanwhile moderated further in August, including notably in the service sector, which has been a key area of concern for the Bank of England.

"The latest survey data therefore help lower the bar for further interest rate cuts, although the still-elevated nature of inflation in the service sector suggests that policymakers will move cautiously."

In equity markets, sports apparel and footwear retailer JD Sports Fashion jumped to the top of the FTSE 100 after saying it saw a return to like-for-like growth in its second quarter, with its store rollout programme in North America and Europe providing a boost while the UK market remains subdued.

LFL sales were 2.4% higher than last year in the three months to 3 August, following a 0.7% year-on-year decline in the first quarter. The company maintained its profit guidance for the full year but said it "continues to be cautious on our outlook".

Sports Direct owner Frasers Group also gained.

Serco edged up after it was awarded a $320m contract by the US Army Corps of Engineers to modernise the backup electrical plant at the US Space Force's Pituffik Space Base in Greenland.

United Utilities was boosted by an upgrade to 'buy' from 'neutral' at UBS.

Hays reversed earlier losses even as the recruiter posted a decline in full-year profit as it highlighted "a clear slowdown" in challenging markets. In the year to the end of June, pre-tax profit slid 92% to £14.7m, while operating profit was down 46% at £105.1m. Net fees fell 12% to £1.1.bn.

Legal & General, Mondi, Schroders, Land Securities, Imperial Brands, Convatec, OSB Group, Just Group, Hammerson and Investec all fell as they traded without entitlement to the dividend.

Ithaca Energy also lost ground as the exploration and production company reported a drop in first-half profit.

Market Movers

FTSE 100 (UKX) 8,302.17 0.23%

FTSE 250 (MCX) 21,181.62 -0.03%

techMARK (TASX) 4,883.46 0.31%

FTSE 100 - Risers

JD Sports Fashion (JD.) 139.20p 8.62%

Frasers Group (FRAS) 859.50p 1.84%

Flutter Entertainment (DI) (FLTR) 16,195.00p 1.79%

United Utilities Group (UU.) 990.60p 1.79%

Unilever (ULVR) 4,815.00p 1.73%

CRH (CDI) (CRH) 6,696.00p 1.36%

Tesco (TSCO) 344.10p 1.27%

Sainsbury (J) (SBRY) 283.20p 1.22%

Smurfit Westrock (DI) (SWR) 3,355.00p 1.21%

International Consolidated Airlines Group SA (CDI) (IAG) 176.00p 1.15%

FTSE 100 - Fallers

Legal & General Group (LGEN) 226.50p -1.95%

Mondi (MNDI) 1,450.00p -1.56%

Glencore (GLEN) 407.00p -1.52%

Schroders (SDR) 341.60p -1.44%

Coca-Cola HBC AG (CDI) (CCH) 2,688.00p -1.32%

Antofagasta (ANTO) 1,826.50p -1.22%

Rio Tinto (RIO) 4,793.00p -0.88%

Beazley (BEZ) 750.50p -0.86%

Imperial Brands (IMB) 2,132.00p -0.79%

Anglo American (AAL) 2,261.50p -0.70%

FTSE 250 - Risers

North Atlantic Smaller Companies Inv Trust (NAS) 4,260.00p 4.41%

Derwent London (DLN) 2,380.00p 2.32%

Grainger (GRI) 248.00p 2.27%

Pagegroup (PAGE) 407.80p 1.90%

Hays (HAS) 96.70p 1.79%

Grafton Group Ut (CDI) (GFTU) 1,054.00p 1.72%

Bank of Georgia Group (BGEO) 4,385.00p 1.50%

Helios Towers (HTWS) 122.60p 1.49%

The European Smaller Companies Trust (ESCT) 180.20p 1.46%

Close Brothers Group (CBG) 498.40p 1.38%

FTSE 250 - Fallers

OSB Group (OSB) 385.20p -3.70%

Ithaca Energy (ITH) 126.20p -3.66%

XPS Pensions Group (XPS) 311.00p -2.81%

Investec (INVP) 572.00p -2.47%

Just Group (JUST) 148.20p -1.98%

Hochschild Mining (HOC) 189.20p -1.87%

Bridgepoint Group (Reg S) (BPT) 300.60p -1.70%

Jlen Environmental Assets Group Limited NPV (JLEN) 92.40p -1.60%

Bodycote (BOY) 655.00p -1.50%

Discoverie Group (DSCV) 634.00p -1.40%