FTSE 100 higher at midday, investors await New York open

6 Aug 2024

London's stock prices were up at midday on Tuesday, following positive news for the construction industry in the UK. Investors are eagerly anticipating the market performance in New York.

Global markets experienced a decline on Monday as investors processed the recent economic information from the United States.

The FTSE 100 index increased by 9.13 points to reach 8,017.36, a rise of 0.1%. The FTSE 250 also saw growth, gaining 84.80 points to reach 20,321.54, an increase of 0.4%. Additionally, the AIM All-Share index went up by 7.01 points, reaching 755.63, which represents a 0.9% increase.

The Cboe UK 100 increased by 0.2% to reach 800.30, while the Cboe UK 250 rose by 0.4% to 17,808.24, and the Cboe Small Companies index went up by 0.1% to 16,539.65.

In European stocks on Tuesday, the CAC 40 in Paris increased by 0.6%, while the DAX 40 in Frankfurt rose by 0.2%.

AJ Bell investment director Russ Mould said that there is some relief this morning as the FTSE 100 and other European indices were able to stop the recent market decline and make some solid gains after stocks bounced back in Asia.

Concerns about a severe economic downturn in the US, caused by poor employment numbers, persist and the unraveling of the yen carry trade could still be unfolding. It is uncertain whether the current market fluctuations are worsened by the absence of many traders due to vacation season.

The market will face another important test when the US opens this afternoon. Futures prices indicate that there will likely be a rebound in the stock market on Wall Street as well.

Stocks in New York were expected to start the day with gains. The Dow Jones Industrial Average and the Nasdaq Composite were forecasted to increase by 0.2%, while the S&P 500 index was predicted to rise by 0.3%.

Yesterday, the stock market in Wall Street closed with losses. The Dow Jones Industrial Average dropped by 2.6%, the S&P 500 decreased by 3.0%, and the Nasdaq Composite went down by 3.4%.

The recent drop in stock markets around the world on Monday has led to increased pressure on the US Federal Reserve to quickly and firmly decrease interest rates. Some experts are even suggesting that the Fed should make an immediate cut before its scheduled rate decision in September.

Federal Reserve Chair Jerome Powell indicated last week that the initial interest rate reduction may happen as early as September.

However, some experts are concerned that this may take longer than expected, as the financial markets reacted strongly to the recent US jobs report falling below expectations. This has sparked worries that the US economy could be heading towards a recession.

The pound was valued at $1.2685 at noon on Tuesday in London, which was less than the $1.2753 it closed at on Monday. The euro was at $1.0905, also lower than the $1.0946 it was at before.

The dollar was worth JP¥144.85, which was an increase from JP¥142.41 when exchanged for yen.

Some positive developments were seen in the construction industry in the UK.

The title for the S&P Global UK construction purchasing managers' index increased to 55.3 in July from 52.2 in June. This exceeded the predictions from FXStreet, as the markets were anticipating a reading of 52.7.

Continuing to stay above the 50.0 threshold indicating no change, the most recent data shows a consistent increase in construction activity in the UK for the fifth month in a row.

Additionally, S&P stated that the pace of growth was the most rapid since May 2022.

Andrew Harker, who is the economics director at S&P Global Market Intelligence, said that the slow growth in June, which was related to the election, didn't last long. In July, the rate of growth increased significantly. Companies experienced the highest growth in new orders and activity since 2022, as projects that had been put on hold were resumed. This was due to reports of better customer confidence.

The increased demand pushed the industry closer to its limit, ending a previous period of better supplier performance. There were also indications of rising inflationary pressures, which will need to be monitored closely if demand remains strong in the coming months.

In the top 100 companies in the London Stock Exchange, InterContinental Hotels increased by 1.4%.

The hotel company located in Berkshire, England announced that its earnings for the first six months of the year were $2.32 billion, which is a 4.3% increase compared to the $2.23 billion generated the previous year. Despite this growth, its pre-tax profits decreased by 17% to $472 million from $567 million.

IHG stated that before-tax profit includes a decrease in the system fund and reimbursables of $10 million from a $87 million profit last year. This decrease was due to a planned reduction in the surplus from the previous system fund.

Meanwhile, Rightmove’s value decreased by 4.8%.

The online property website in Milton Keynes, England stated that the rental market is constantly changing. They also mentioned that they will not be renewing their contract with the letting agent OpenRent.

Rightmove announced that their partnership with OpenRent will come to an end at the beginning of September due to their inability to reach an agreement on renewal terms.

In July, Rightmove reported that OpenRent made up less than 8% of the listings for rental properties on their platform.

Panmure Liberum analyst Sean Kealey stated that this development may increase concerns that Rightmove's ability to set prices is diminishing.

In the second-tier FTSE 250 index, Keller's stock price soared by 10%.

The company in London that specializes in geotechnical engineering reported that their profit before taxes more than doubled to £95.3 million in the first six months of 2024, compared to £43.1 million in the same period the year before.

Income increased by 1.6% to £1.49 billion from £1.47 billion. Keller's backlog of orders slightly rose to £1.6 billion from £1.5 billion.

The company announced a temporary dividend of 16.6 pence per share, which is 19% higher than the 13.9p dividend from the previous year.

CEO Michael Speakman announced that Keller's projected performance for 2024 is expected to exceed current market predictions by a significant margin.

The stock price of Domino’s Pizza dropped by 7.1%.

Domino's Pizza reported a 35% decrease in profit before tax, dropping to £59.4 million in the first half of 2024 from £91.5 million the year before. However, the underlying pre-tax profit saw a slight increase of 0.8% to £51.3 million from £50.9 million.

The business increased its temporary dividend payment by 6.1% to 3.5 pence per share from 3.3p the previous year.

Additionally, Domino's disclosed a new plan to repurchase £20 million worth of shares, with the goal of diminishing the company's share capital.

YouGov saw a 17% increase on the AIM market in London.

According to the market research and data analytics firm, they anticipate that the financial results for 2024 will be slightly better than initially predicted.

The company predicts that their earnings will be between £327 million and £330 million, an increase from the £258.3 million they earned in the previous financial year. They anticipate that their adjusted operating profit will fall between £43 million and £46 million, a decrease from the £48.3 million they made previously.

Brent crude oil was priced at $76.60 per barrel around noon on Tuesday in London, which was an increase from $75.60 the previous day.

The price of gold dropped to $2,413.90 per ounce from $2,418.90.

Up next on Tuesday's schedule of economic events, there will be information released on the US trade balance at 1:30 PM BST.

Publication Date: August 06, 2024