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(Alliance News) - Stocks in London ended higher on Wednesday continuing August's positive momentum, while the pound found support from positive UK services PMI data ahead of the Bank of England rate decision on Thursday.
The FTSE 100 index closed up 18.14 points, or 0.3%, at 7,123.86. The FTSE 250 ended up 58.08 points, or 0.3%, at 23,347.73. The AIM All-Share finished marginally lower at 1,258.48.
The Cboe UK 100 finished up 0.2% at 709.40, the Cboe UK 250 closed down 0.1% at 21,048.30, and the Cboe Small Companies ended up 0.4% at 15,294.10.
In Paris the CAC 40 ended up 0.3%, while the DAX 30 in Frankfurt ended up 0.9%.
"It's been another decent day for European markets today, with the Stoxx600 notching another new record high, along with the FTSE 250, with the DAX also bouncing back after a poor day yesterday. The FTSE 100 has continued to edge higher, notching another three-week high," said CMC Markets analyst Michael Hewson.
In the FTSE 100, gambling company Entain ended the best performer, up 6.1%, while peer Flutter Entertainment closed up 2.3%, following positive results from US peer Caesars Entertainment on Tuesday.
For the second quarter ended June 30, the Reno, Nevada-based firm posted net revenue of USD2.5 billion versus USD127 million on a GAAP basis the year before, and net income of USD71 million compared to a net loss of USD100 million for the same period.
In addition, Caesars - which owns bookmaker William Hill in the UK - announced a push to promote its new mobile sports betting app, which includes a nationwide advertising and social media campaign.
"Today's gainers have been led by Ladbrokes and Coral bookmakers' owner Entain whose shares have also hit record highs on speculation that MGM Resorts might return with a renewed bid for the firm, having freed up USD4.4bn in selling its Aria and Vdara resorts to Blackstone," Hewson added.
Legal & General closed up 2.9% after the 185-year old insurer revealed earnings "well above" pre-virus levels in a strong first half.
The London-based firm posted operating profit of GBP1.08 billion for the first half of 2021, up 14% on a year ago, and earnings per share of 17.78p, up sharply on the 4.89p achieved a year ago and 21% higher than the 2019 level of 14.74p.
In addition, L&G lifted its interim payout by 5.1% to 5.18p from 4.93p.
Taylor Wimpey ended up 1.9% after the housebuilder raised full-year guidance on a buoyant UK property market that saw it completing on a record number of homes.
Revenue for the first half of 2021 surged to GBP2.20 billion from GBP754.6 million a year ago, while the construction company swung to a pretax profit of GBP287.5 million from a loss of GBP39.8 million.
Forward indicators remain robust, it added, and build cost and supply chain pressure is being fully offset by "healthy" house price growth.
Taylor Wimpey now expects full-year operating profit to be GBP820 million, above the top end of consensus. This compares with just GBP300.3 million in 2020, and approaches the pre-pandemic level of GBP850.5 million in 2019.
In the FTSE 250, Ferrexpo ended the worst performer, down 9.3%, after the iron ore pellet producer warned that it expects demand for iron ore to decline in the second half from current record levels.
Ferrexpo said half-year revenue rose 74% from the same period last year, despite a 9% fall in sales volume, as iron ore prices doubled.
The London-based miner's revenue for the six months that ended June 30 nearly doubled to USD1.35 billion from USD775.8 million in the same period last year. Revenue for all of 2020 was USD1.70 billion.
Morgan Sindall ended 6.6% lower despite the housing regeneration specialist posting a surge in interim profit amid a "very strong" first half of 2021.
Pretax profit for the six months that ended June 30 was GBP52.4 million, multiplied year-on-year from GBP13.6 million. Profit also was up 48% from the 2019 level of GBP35.5 million.
Morgan Sindall declared an interim dividend of 30.0 pence per share, up 43% from 21.0 pence in both 2020 and 2019.
The pound was quoted at USD1.3905 at the London equities close, up slightly from USD1.3895 at the close Tuesday, as investors look ahead to the Bank of England's interest rate decision.
The BoE will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes and Monetary Policy Report, at midday on Thursday.
Policymakers on Threadneedle Street are expected to keep monetary policy unchanged with interest rates on hold at the record low 0.1% and the asset purchase programme steady at GBP895 billion to the year end.
The central bank's latest inflation forecasts will be closely watched even though analysts believe BoE Governor Andrew Bailey will continue to insist recent price pressures are temporary.
Investor attention will also be on the bank's quantitative easing programme.
Rate-setter Michael Saunders gave a speech last month in which he warned the BoE may need to halt its GBP895 billion bond-buying programme "fairly soon" to cool soaring inflation as the economic recovery gathers pace. He believes it is no longer clear that all the factors driving inflation higher are only temporary.
"The recent rise in Covid-19 uncertainty means we're unlikely to see a hawkish turn from the Bank of England on Thursday. We expect policymakers to avoid offering any new hints on when the first rate hike may come, and we also doubt we'll get the early end to QE that some BoE hawks have recently proposed," said analysts at ING.
On the economic front, the UK's services sector held up better than expected in July, even if momentum did slow from June due to staffing shortages and Covid-19 isolation rules, figures from IHS Markit showed.
The IHS Markit/CIPS UK services purchasing managers' index registered 59.6 points in July, down from 62.4 in June. However, the score remained above the no-change mark of 50.0 and also came in ahead of the flash reading of 57.8.
The euro stood at USD1.1747 at the European equities close, down sharply from USD1.1860 late Tuesday. Against the yen, the dollar was trading at JPY109.65, up from JPY109.02 late Tuesday.
Stocks in New York were lower at the London equities close amid global growth concerns and disappointing US private hiring figures.
The DJIA was down 0.7%, the S&P 500 index down 0.4% and the Nasdaq Composite down 0.1%.
Hiring by US private firms slowed sharply in July to 330,000, with dramatically lower gains in the construction and leisure and hospitality sectors, according to payroll services firm ADP.
The disappointing data come ahead of Friday's much-anticipated government employment report, which is expected to show a gain of as much as a million jobs.
The weak figures will foment the narrative that the US economy has reached "peak growth," said Briefing.com analyst Patrick O'Hare.
On the corporate front, General Motors Co said its revenue doubled in the second quarter of 2021, resulting in a swing to profit.
The stock was down 8.2% in New York.
The Detroit, Michigan-based automaker said it swung to a net income of USD2.84 billion in the three months to June 30 from a USD758 million loss reported a year ago, as revenue jumped to USD34.2 billion from USD16.8 billion year-on-year.
GM said it expects to report full-year net income of between USD7.7 billion and USD9.2 billion. It now expects full-year earnings before interest and tax-adjusted in the range of USD11.5 billion to USD13.5 billion, compared with USD10 billion to USD11 billion previously.
Brent oil was quoted at USD71.22 a barrel at the equities close, down from USD71.83 at the close Tuesday.
Gold was quoted at USD1,808.00 an ounce at the London equities close, marginally lower against USD1,809.00 late Tuesday.
The economic events calendar on Thursday has a UK construction PMI reading at 0930 BST and the latest US jobless claims figures at 1330 BST.
The UK corporate events calendar on Thursday has interim results from jet engine maker Rolls-Royce, commodities house Glencore, packaging firm Mondi and ad agency WPP.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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