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FTSE 100 Live: Taylor Wimpey upgrades profit guidance, OPEC meets

·11-min read
 (Evening Standard)
(Evening Standard)

OPEC members approved a tiny increase in oil output today in a move some saw as a snub to US President Joe Biden.

Housebuilder Taylor Wimpey today upgraded profits guidance amid signs of continued resilience in the UK property market.

The FTSE 100-listed company reported a 16% rise in interim profits to £334.5 million and said it expects a full-year performance around the top end of current City forecasts.

Chief executive Jennie Daly said housing market fundamentals remain positive: “Demand for our homes remains strong.”

FTSE 100 Live Wednesday

  • Taylor Wimpey raises FY guidance, shares rise

  • Opec+ agrees tiny oil output increase

  • Avast shares surge on CMA clearance

FTSE 100 picks up as US stocks move higher after robust economic data

16:01 , Michael Hunter

The FTSE 100 was positive in afternoon trade, helped by the demise of a two-day losing streak on Wall Street, where investors took heart from re-assuring data from the services sector.

After a muted morning, London’s main stock index was up 26 points at 7,436.0. Housebuilder Taylor Wimpey made one of the best gains, up almost 5% to 126p, after it stayed upbeat on the UK home market and reported bumper profits. There were gains of around 2% apiece for sector peers Persimmon and Barratt Developments.

Rolls-Royce, the globally famous engine maker, was up over 2% at 90p ahead of its half-year. results due out tomorrow.

The S&P 500 was up 36 points at 4,126.0 in New York, after the purchasing managers’ index reading for non-manufacturing sectors in the US unexpectedly rose, sending a soothing signal on the performance of the world’s biggest economy.

OPEC snubs Biden after agreeing tiny oil production increase

15:30 , Simon Hunt

OPEC members approved a tiny increase in oil output today in a move some saw as a snub to US President Joe Biden.

The organisation agreed to ramp up production by 100,000 barrels a day, one of the smallest increases in its history.

It’s thought the US had urged for a greater increase in a bid to counter Russian energy supply restrictions and aid the global economy, but a desire by Saudi Arabia to maintain ties with Russia prevented a bigger rise.

Brent crude rose 1.5% to $102 a barrel following the announcement.

14:41 , Michael Hunter

New York’s S&P 500 ends two-day losing streak ahead of economic data

14:41 , Michael Hunter

Wall Street snapped a two-session run of declines in opening trade, as investors took in more earnings reports and looked ahead to more data for insight into the health of the world’s biggest economy.

Numbers from the Institute of Supply Management on activity outside the manufacturing sector are expected to reveal the fourth consecutive month of a slowdown in the rate of growth, without registering an overall decline. The number will play into expectations for the pace of the Federal Reserve’s ongoing series of interest rate rises at the central bank seeks to tame inflation while protecting economic growth.

The S&P 500 started the session up 0.8% at 4122.69.

Moderna’s quarterly earnings beat Wall Street forecasts

14:11 , Michael Hunter

Moderna became the latest big-name US biotech company to beat earnings expectations, reporting $4.7 billion (£3.9 billion) in sales, a rise of 9% in the second quarter.

The Boston-based company left its guidance for sales of its Covid-19 vaccine steady at $21 billion, but it wrote off stocks of the shot worth almost $500 million that expired before use, or will not be used before expiration.

Its shares rose almost 3% in pre-market trade in New York, ahead of the start of full Wall Street trade at 2.0pm London time.

BMW shares go into reverse as sales of luxury cars slow

13:57 , Michael Hunter

Shares in BMW, the iconic German carmaker, fell after it said “inflation and interest rate hikes” would “impact demand” as it reported headline earnings of €3.4 billion (£2.8 billion), ahead of City forecasts.

In afternoon Frankfurt trade, BMW’s shares were down 6% to €76.28.

Corporate news from the sector has been mixed lately. BMW’s words came after its Italian rival, Ferrari, reported record quarterly profit on Tuesday and raised its revenue guidance after record sales. In the UK, Aston Martin reported sell-out demand for some of its models last week, but also revealed that hundreds of supercars remain unfinished due to supply chain problems relating to Covid lockdowns in China and the war in Ukraine.

BMW said it expected its order book to “normalise” from higher-than-average levels “towards the end of the year”. Its compatriot, Mercedes, was more upbeat last week, when it raised earnings forecasts.

Chips shortage cuts Nintendo switch sales

12:18 , Simon Hunt

The global chip crisis has hit sales of Nintendo’s flagship Switch gaming console.

The Japanese gaming giant said bottlenecks led to sales of the platform falling almost 25% from 4.45 million to 3.43 million in the second quarter.

Profit and revenues both missed market forecasts.

The disappointing results follow those of fellow console maker Sony, which cut the profit outlook for its PlayStation arm by 16% last week.

Quarterly sales of the standard Nintendo Switch fell 60% to 1.32 million units and sales of the Switch Lite dived nearly 50% to 590,000.

Robinhood crypto app sacks nearly one in four staffers

11:36 , Simon Hunt

The boss of US trading app Robinhood has fired almost a quarter of its workforce as retail investors quit the platform amid falling crypto prices.

The value of assets held by the California-based business plummeted 31% in the three months to June, as almost two million users left the app.

Robinhood boss Vlad Tenev wrote in a blog post: “We have seen additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.

“In this new environment, we are operating with more staffing than appropriate.” The company employed 3900 people as recently as March.

Bitcoin has fallen 46% since January.

It comes after cyber criminals stole $200 million of digital assets from two crypto firms in 24 hours, leaving customers’ crypto wallets empty. One of the companies, Solana, urged customers to abandon compromised wallets.

Hiscox shares dive as insurer falls to £88m loss

11:11 , Simon Hunt

Shares in insurer Hiscox slumped 8% in early trading today after it posted a $107 million (£88 million) loss for the first half of the year.

The company — one of the biggest players in the London market — made a $133.4 million pre-tax profit in the same period last year.

The Bermuda-headquartered business said that its investments were running at a loss of $214.1 million, down from a $61.9 million profit during in the first half of 2021.

Nevertheless boss Aki Hussain stated he was “pleased” with the group’s performance despite the shares being the biggest fallers in the FTSE 250 index .

He said: “Our strategy and diverse portfolio of businesses continues to create opportunity, and we are well positioned to generate high quality growth and earnings.”

However, international insurance group RSA pulled itself back into the black, reporting a profit of £107 million in its half-year results.

The bounce-back compared with a £249 million loss for the six months to the end of June last year.

FTSE 100 flat, Rolls-Royce shares up 4%

10:34 , Graeme Evans

Just Eat Takeaway shares continued their recent improvement today, despite the delivery firm taking a £2.5 billion hit on its Grubhub acquisition.

A balance sheet write-down on last year’s landmark all-share deal in the United States triggered losses of 3.5 billion euros (£2.9 billion) in half-year results. However, losses at an underlying level narrowed to 134 million euros (£112 million).

Shares rocketed last year as orders surged due to pandemic lockdowns, only to fall back 60% this year as trading returned to normal and the company digested the Grubhub deal.

The ex-FTSE 100-listed stock has shown signs of improvement in the past fortnight, with shares up a further 2% or 27.6p to 1585.2p after today’s results.

Chief executive Jitse Groen remains optimistic about prospects and said the Amsterdam-based company had made “significant progress” towards profitability in the half year.

Groen pointed out Just Eat is now two times larger than it was pre-pandemic. He added: “Whilst this growth required significant investment, we have continued to focus on executing our strategy to build and operate highly profitable food delivery businesses.”

In the FTSE 100 index, cyber security firm Avast surged more than 40% or 204.1p to 682p after the Competition and Markets Authority cleared its takeover by NortonLifeLock. The deal, which was unveiled in August 2021, should complete by mid-September.

There was also relief for Rolls-Royce investors after the engines giant said the Spanish government had approved the company’s sale of ITP Aero to a private equity consortium.

The sale was first announced in September and completes a disposal programme worth £2 billion. Shares rose 4% or 3.5p to 91.3p in an otherwise lacklustre session for the London market as the FTSE 100 index drifted 2.86 points to 7406.03.

The sideways movement came despite heavyweight BP shares adding another 5.1p to 408.45p after Goldman Sachs upped its price target to 640p in the wake of yesterday’s second quarter results.

The FTSE 250 index was 10.67 points higher at 19,884.56, with gambling group 888 Holdings the biggest riser after a gain of 4.1p to 145.9p.

FTSE 100 lower, Avast surges 40%

09:06 , Graeme Evans

Taylor Wimpey shares are 4% higher after its improved guidance in half-year results, although its valuation remains considerably lower over the year to date.

In line with others in the sector, the FTSE 100-listed stock has lost more than a quarter of its value as worries mount over the house market outlook and removal of government incentives.

Shares rose 4.3p to 124p in a session when London’s FTSE 100 retreated 27.33 points to 7381.78.

Cyber security firm Avast was the biggest top flight riser, with its shares surging more than 40% after the Competition and Markets Authority cleared its takeover by NortonLifeLock. The deal, which was unveiled in August 2021, should complete by mid-September.

BP shares added another 2p to 405.3p as yesterday’s bumper second quarter results and higher dividend led analysts at Goldman Sachs to up their price target to 640p.

British Gas owner Centrica gave up some of its recent strength, declining 2p to 87.2p after Citigroup cut its price target to 97p from 105p.

The FTSE 250 index was 11.67 points lower at 19,862.40, with road safety barriers business Hill & Smith the biggest faller after half-year results sent shares down 9% or 120p to 1,150p.

OPEC+ set to leave output unchanged

08:24 , Graeme Evans

OPEC+ oil producing countries are not expected to increase levels of crude supply when they hold a meeting by video call today.

Some nations are struggling to meet their production quotas and forecasts of slower demand will also influence their decision to keep existing targets in place.

The Brent crude oil price has fallen back towards $100 a barrel in recent weeks as recession fears offset ongoing supply challenges.

Callum Macpherson, Investec’s head of commodities, said: “It seems unlikely OPEC+ will do anything when it meets today. If it did decide to increase output in any form, this could come as quite a surprise and lead to Brent crude testing levels further under $100 a barrel.”

FTSE 100 lower ahead of OPEC meeting

07:56 , Graeme Evans

Heightened tensions between the US and China following House Speaker Nancy Pelosi’s visit to Taiwan contributed to a poor session for Wall Street last night.

Investors were also unnerved by some Federal Reserve policymakers signalling that further aggressive interest rate hikes may still be necessary to tackle high inflation.

The Dow Jones Industrial Average fell 1.2%, although the decline for the Nasdaq was limited to 0.2% as the tech-focused index continued its recent outperformance.

In extended hours trading, PayPal shares soared 11% on the back of robust second quarter results and positive guidance for the rest of the year. But shares in Airbnb fell 8% after its results disappointed on the revenues front.

US futures markets are pointing to a mixed session on Wall Street later, while CMC Markets expects the FTSE 100 index to open 10 points lower at 7399.

At the latest OPEC meeting, the weaker demand outlook is set to mean ministers stick to existing production plans. Brent crude stayed close to $100 a barrel today.

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