London open: Stocks gain ahead of Fed announcement

31st Jul 2024 07:55

(Sharecast News) - London stocks rose sharply in early trade on Wednesday, underpinned by strength in the mining and energy sectors, as investors eyed the latest policy announcement from the US Federal Reserve.

At 0855 BST, the FTSE 100 was up 1.2% at 8,377.25.

Ahead of the BoE announcement on Thursday and after the Bank of Japan hiked rates by 15 basis points, all eyes were on the Fed decision due at 1900 BST.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The Fed is not expected to make a change to its rates today, but is widely and wildly expected to hint at a September rate cut. Activity on Fed funds futures doesn't only hint at a 100% chance for a rate cut to happen in September but it also shows that the doves are getting ahead of themselves with the assessment of a nearly 15% chance that the Fed could cut 50bp or more in September - which will obviously not happen unless there is a big crisis or stress on the financial markets.

"Therefore, the stretched Fed pricing is a sign that the Fed cut expectations went too far and that we shall see a correction even though the Fed hints strongly at a September cut today - with the risk of hardly upsetting the market if it does not."

In UK equity markets, heavily-weighted miners were among the top performers, with Antofagasta, Anglo American and Glencore all up. Rio Tinto was also in focus after it reported a 1.8% jump in first-half profit.

Oil giants BP and Shell gushed higher as oil prices rose amid escalating tensions in the Middle East.

HSBC gained as it said it would start a $3bn share buyback after the Asia-focused bank reported estimate-busting interim profits in its final set of results under chief executive Noel Quinn. Pre-tax profits surged to $8.9bn from $8.8bn a year earlier and smashed analysts' forecasts of $7.8bn.

Quinn, who has been CEO for five years, will be succeeded by finance chief Georges Elhedery.

The bank announced that financial controller Jon Bingham would take on the chief financial officer role on an interim basis.

Taylor Wimpey was in the black as the housebuilder said profits fell by more than a fifth in the first half as residual build cost inflation and weaker pricing hit margins, but that it now expects full-year completions to be at the top end of guidance after a solid operational performance.

Shaftesbury was also up after interim results, while Just Eat surged after backing its guidance for 2024 as it posted a more than 40% increase in first-half core profit and announced a new €150m share buyback programme.

On the downside, GSK fell despite raising annual forecasts after better-than-expected second-quarter results, driven by a strong performance from its cancer and HIV treatments.

Market Movers

FTSE 100 (UKX) 8,377.25 1.24%

FTSE 250 (MCX) 21,564.18 0.61%

techMARK (TASX) 4,812.75 0.43%

FTSE 100 - Risers

Antofagasta (ANTO) 1,996.50p 3.37%

Anglo American (AAL) 2,349.00p 3.16%

HSBC Holdings (HSBA) 697.80p 3.09%

Glencore (GLEN) 428.70p 2.90%

Shell (SHEL) 2,835.00p 2.48%

Ashtead Group (AHT) 5,554.00p 2.47%

BP (BP.) 462.35p 2.37%

Taylor Wimpey (TW.) 162.25p 2.33%

Croda International (CRDA) 4,062.00p 2.19%

LondonMetric Property (LMP) 203.60p 2.16%

FTSE 100 - Fallers

GSK (GSK) 1,508.00p -2.24%

Smurfit Westrock (DI) (SWR) 3,540.00p -1.94%

Convatec Group (CTEC) 236.00p -0.51%

Pershing Square Holdings Ltd NPV (PSH) 3,766.00p -0.37%

Relx plc (REL) 3,687.00p -0.03%

RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%

Smith (DS) (SMDS) 454.00p 0.00%

easyJet (EZJ) 459.30p 0.11%

CRH (CDI) (CRH) 6,554.00p 0.18%

NATWEST GROUP (NWG) 367.50p 0.22%

FTSE 250 - Risers

Indivior (INDV) 1,053.00p 4.05%

Spectris (SXS) 3,050.00p 3.25%

Target Healthcare Reit Ltd (THRL) 83.50p 2.96%

JPMorgan Japanese Inv Trust (JFJ) 550.00p 2.42%

Trainline (TRN) 337.20p 2.12%

Workspace Group (WKP) 633.00p 2.10%

Ashmore Group (ASHM) 175.70p 2.09%

Close Brothers Group (CBG) 520.00p 2.06%

Shaftesbury Capital (SHC) 154.90p 2.04%

Petershill Partners (PHLL) 225.00p 2.04%

FTSE 250 - Fallers

AO World (AO.) 114.20p -3.22%

Inchcape (INCH) 839.50p -2.33%

Tyman (TYMN) 389.50p -2.26%

SSP Group (SSPG) 174.90p -1.58%

Ithaca Energy (ITH) 125.00p -1.11%

ICG Enterprise Trust (ICGT) 1,324.00p -1.05%

TR Property Inv Trust (TRY) 333.00p -1.04%

Endeavour Mining (EDV) 1,724.00p -0.92%

W.A.G Payment Solutions (WPS) 65.80p -0.90%

Spirent Communications (SPT) 171.00p -0.87%