A raft of well-received earnings reports from London-listed heavyweights sent the FTSE 100 index soaring almost 2.0% on Thursday to its highest level since the start of the year, bolstered by Wall Street also enjoying a year-high across the pond.
The FTSE 100 index gained 84.1 points to close at 4,631.6—its highest level since January 6, while the FTSE 250 index also rallied, adding 172.0 points or 2.2% to settle at 7,934.6. It was much the same situation on the continent, where investors in European indices celebrated a return to positive earnings news, and over in the US, the Dow Jones Industrial Average, S&P 500 and NASDAQ 100 all took on between 1.4% and 1.6% as earnings from both sides of the Atlantic buoyed sentiment.
Earnings news wasn’t the only rocket under the UK markets. The latest Nationwide Building Society report revealed house prices rose for the third consecutive month in July, up 1.3% this month, which trims the annual decline to just 6.2%.
Over in the US, a mixed labour report also offered some reason to be optimistic about the state of the economy: though weekly jobless claims rose a tad more than predicted, the number of people continuing to claim jobless benefits was at its lowest level in four months.
On the corporate front, news flow and equity movements were firmly focussed on earnings results and interim updates. BT was the top blue-chip performer with a share price jump of 12.6% after the telco’s first quarter numbers beat consensus expectations at every level.
Rolls Royce Group was another strong gainer, up 8.7%, after also exceeding market forecasts with a set of results that confirmed more than one analyst’s investment case. In fact, in addition to BT and Rolls, BSkyB, Antofagasta, British American Tobacco and AstraZeneca all rallied after surpassing analyst estimates. Click here for a round-up of today’s key earnings news, and for Morningstar’s take on Astra and BAT’s numbers click here and here, respectively.
Miners were the main sector behind the FTSE 100’s rise, with Lonmin, Eurasian Natural Resources and Antofagasta each climbing 7.6%-8.4% after the latter outdid the forecaster with a drop of just 6.6% in copper production in the first half.
And banks also gave the broader index a fillip as HSBC, Barclays and Royal Bank of Scotland ticked up 2.8%-4.3% apiece.
Not all earnings releases met with applaud today, however. Those of Anglo-Dutch publisher Reed Elsevier were overshadowed, despite adhering to the trend of beating estimates, by a downgrade to management guidance. Reed had previously indicated it expected EPS growth in the full year but today the company said it sees EPS under pressure both this year and next. Shares in the group slumped 12.6%.
Another Anglo-Dutch firm, Royal Dutch Shell, shed 0.2% after its own forecast-beating figures could not hide severe earnings erosion and volume weakness.
And BAE Systems was another casualty, down 4.9%, after a worrying 30% rise in its pension deficit offset top-of-the-range first-half numbers.
On the second line, Travis Perkins stood out with a surge of 13.6%--the usual culprit, that of beating the analysts, was to thank for the outperformance, while on the flip side RPS Group slumped 9.8% as investors struggled to find further reasons to buy into the stock following an in-line set of numbers.
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