(Alliance News) - European stocks climbed, with London's FTSE 100 on track for a winning week, despite a volatile week in financial markets.
The blue-chip FTSE 100 has prospered despite a heavy US tech sell-off and poorly-received earnings in Europe and is up around 1% so far this week.
The FTSE 100 index traded up 58.40 points, or 0.7%, at 8,244.06. The FTSE 250 was up 221.33 points, 1.1%, at 21,105.17, while the AIM All-Share rose 3.17 points, 0.4%, at 776.20.
The Cboe UK 100 was up 0.8% at 823.02, the Cboe UK 250 rose 1.1% to 18,493.38, and the Cboe Small Companies advanced 0.7% to 17,132.07.
The CAC 40 in Paris jumped 1.0%, while Frankfurt's DAX 40 traded 0.3% higher.
"As we progress through the European session, there are signs that risk appetite is returning. The major European stock indices are mostly higher, US stock index futures are sharply higher, and the dollar is stabilizing," said Kathleen Brooks, research director at XTB.
Focus in the afternoon turns to US data, with the release of the Federal Reserve's preferred inflation gauge, just days before its next interest rate decision.
Brooks pointed out economists expect core PCE to rise 0.1% [on-month], and for the annual index to moderate to 2.4% from 2.6% in May.
Ahead of the data, in New York, the Dow Jones Industrial Average is called to open 0.6% higher, the S&P 500 up 0.8% and the Nasdaq Composite up 1.0%.
The Federal Reserve announces an interest rate decision next week Wednesday. It is expected to maintain the federal funds rate range at 5.25% to 5.50%.
"With encouraging inflation data and the labor market showing signs of moderation, we expect the [Federal Open Market Committee] to hint at a September rate cut. But with key data to come in the next several weeks and markets having already priced in a September cut, we see little upside for the FOMC to provide a strong signal," Barclays said.
The pound was quoted at USD1.2869 at Friday lunchtime, down from USD1.2882 at the time of the London equities close Thursday. The euro stood at USD1.0855, fading slightly from USD1.0857. Against the yen, the dollar was trading at JPY154.58, up from JPY153.44.
NatWest was the star performer in the FTSE 100, rising 5.9%, after raising annual guidance and buying a mortgage portfolio from Metro Bank.
The lender reported total income of GBP7.13 billion for the first-half of 2024, down 7.7% on-year from GBP7.73 billion. Net interest income alone dropped 5.6% to GBP5.41 billion.
Pretax profit declined 16% to GBP3.03 billion from GBP3.59 billion. In the second-quarter alone, total income fell 5.0% annually to GBP3.66 billion, but beat company-compiled consensus of GBP3.41 billion. Pretax profit, which declined 14% to GBP1.70 billion, beat consensus of GBP1.26 billion.
NatWest said the deal with Metro Bank will see it snap up a GBP2.5 billion portfolio of prime UK residential mortgages.
Chief Executive Paul Thwaite pointed to growth across the business.
"We have attracted over 200,000 new customers and our acquisition from Sainsbury's Bank is expected to add around one million customer accounts on completion," he noted.
He hailed "positive momentum and progress in the first half", and said customers are "beginning to feel more confident, with activity increasing and asset quality remaining strong."
"The combination of a high quality [second quarter] earnings beat, guidance upgraded ahead of consensus and what we consider conservative unchanged medium term targets should support continued stock outperformance," banking analysts at Bank of America remarked.
Metro Bank said the deal will "earnings, net interest margin and capital ratio accretive". Shares in the high street lender were 3.0% higher.
IMI rose 2.2% after what broker Peel Hunt called a "robust" set of interim results.
The Birmingham-based engineering firm declared a 10% improved interim dividend and announced a GBP100 million share buyback, following a rise in half-year profit.
IMI said pretax profit was GBP162.5 million, up 17% from GBP138.5 million a year before, as revenue inched up 1.3% to GBP1.10 billion from GBP1.08 billion.
The firm also said Chief Financial Officer Daniel Shook will leave next year, though no earlier than May, after nine years with the company.
Peel Hunt noted organic revenue growth of 5% compared to 4% in the first quarter, making IMI one of the few companies in the sector that has seen an acceleration.
Rightmove was up a more modest, 0.4%.
The property portal owner said that for the first six months of 2024, pretax profit rose 1.8% to GBP132.7 million from GBP130.3 million the year before. Basic earnings per share rose 2.5% to 12.4 pence from 12.1p.
Rightmove also said revenue increased by 7.1% to GBP192.1 million from GBP179.5 million "as both agents and new homes developers renewed contracts, upgraded their packages and invested in additional products".
Rightmove meanwhile declared an interim dividend of 3.7 pence per share for the half year, up 2.8% from 3.6p for the first half of 2023.
"We're pleased to deliver a strong set of H1 results, and to be progressing in executing our plan to build an even more valuable digital platform for the UK property industry," commented Chief Executive Officer Johan Svanstrom.
Miner Anglo American was also among those to climb, adding 4.3% after UBS raised it to 'buy' from 'neutral'.
Segro, however, fell 3.0%.
The London-based property investment company said its net asset value per share decreased slightly to 874 pence at June 30, from 886p at December 31.
Segro did however increase its dividend for the first half of 2024, by 4.6% to 9.1p per share from 8.7p the prior year.
In the FTSE 250, Drax powered 13% to the good as it announced a GBP300 million share buyback and predicted full-year adjusted earnings before interest, tax, depreciation and amortisation will hit the top end of a consensus range of GBP881 million to GBP996 million.
The electricity generator said its half-year revenue fell 19% to GBP3.16 billion from GBP3.89 billion. Pretax profit, however, shot up 37% to GBP463.2 million from GBP338.1 million.
Among London's small caps, Record rose 2.2%.
The currency and asset manager said it has made a "solid start to the year". Assets under management increased to USD102.7 billion at its June 30 first-quarter end, from USD102.2 billion in March. It suffered a total net outflow of USD500 million, but got a USD100 million boost from foreign exchange movements, and a USD900 million tailwind for movements in global stock and other markets.
On AIM, Brighton Pier Group fell 17% after stating footfall has suffered due to a wet start to the UK summer.
The leisure and entertainment business, which operates Brighton Palace Pier, said footfall for the four weeks to July 21 was down 29% on-year.
The group now anticipates that full year sales for the pier will be lower than previously expected.
Brent oil was quoted at USD81.90 a barrel at Friday lunchtime, climbing from USD81.75 at the time of the London equities close Thursday. Gold was quoted at USD2,373.42 an ounce, up from USD2,366.60.
By Jeremy Cutler, Alliance News reporter
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