- Mining stocks, ARM Holdings provide a lift
- Royal Mail drops on disappointing parcel performance, Tesco pulls back
- Gaza, Ukraine still in focus
techMARK 2,816.77 +0.56%
FTSE 100 6,782.04 +0.80%
FTSE 250 15,592.23 +0.69%
UK stocks rose strongly on Tuesday as a return of risk-on trading helped shares
in the heavyweight mining sector and ARM Holdings impressed with better-than-expected second-quarter results.
"Yet again this market is proving that geopolitical concerns have only a short-term impact on broader investor sentiment. Last week's Ukrainian news saw a gap between major earnings, and now that US companies are back in focus the emphasis, and with it risk appetite, has shifted," said Alastair McCaig, Market Analyst at IG.
Heightened tensions in both Ukraine and Gaza pushed the FTSE 100 0.3% lower on Monday. However, blue chips recovered strongly this morning with London's benchmark index up 0.8% at 6,782 by midday.
A wave of upbeat corporate earnings from the States is helping stocks higher this morning, with Netflix, United Technologies and Chipotle Mexican Grill.
The continued conflict in Gaza has led to the killing of dozens of Palestinians and Israeli soldiers in recent days, with the death toll said to have now exceeded 600 during the two weeks of clashes. At least five people were killed today by an Israeli strike on a hospital.
Meanwhile, in the latest development in the Ukraine-Russian conflict, pro-Moscow rebels have handed over the black boxes from flight MH17 and allowed the train carrying bodies of victims to go to Ukrainian government hands. That came after Russian President Vladimir Putin bowed to substantial pressure from global leaders and called on the separatists to allow investigators access to the crash site.
In economic news this morning, UK public-sector borrowing improved slightly in June but not as much as economists had expected, prompting concerns that the government is struggling to meet its fiscal targets. Net borrowing excluding financial interventions was £11.4bn last month, just £0.1bn below the £11.5bn borrowed in June 2013. Analysts had expected the deficit to fall to around £10.5bn.
ARM, miners gain; Royal Mail drops
Chip designer ARM Holdings was a high riser as it delivered a confident outlook, hailing a "healthy pipeline of opportunities" after strong licensing results helped profits beat expectations in the second quarter. The tech group, which makes processors for smartphones and tablets, said pre-tax profit in the six months to June 30th rose 9% year-on-year to £94.2m, ahead of the £91m estimated by analysts.
Mining stocks were on the rise this morning on the back of renewed risk appetite, as investors shrugged off declining metal prices. Antofagasta, Rio Tinto and BHP Billiton were making decent gains. Even Anglo American was in demand despite saying that the bulk of its iron ore division, which accounts for around half of group profits, saw underlying earnings drop 28% in the first half.
Heading the other way was Royal Mail after tougher competition in the corporate market in the first quarter resulted in a weaker-than-expected performance in UK parcels, meaning full-year revenues are likely to be lower than forecasts.
Supermarket giant Tesco was also in the red, completely erasing gains made on Monday after investors welcomed the resignation of its Chief Executive Philip Clarke. However, it appears that the market was finally reacting today to a simultaneous profit warning from the grocer on the back of a "challenging" second quarter. Rivals Wm Morrison and J Sainsbury were also lower.
IG Group, which provides financial spread betting, surged after hiking its final dividend by 28% as it reported a 2.4% rise in full-year trading revenue to £370.4m.
FTSE 100 - Risers
ARM Holdings (ARM) 876.00p +5.10%
Anglo American (AAL) 1,586.50p +2.65%
easyJet (EZJ) 1,379.00p +2.53%
Persimmon (PSN) 1,275.00p +2.33%
Barratt Developments (BDEV) 361.80p +2.15%
Antofagasta (ANTO) 833.00p +2.15%
St James's Place (STJ) 766.50p +2.13%
International Consolidated Airlines Group SA (CDI) (IAG) 329.70p +2.04%
British Land Co (BLND) 727.50p +2.03%
Fresnillo (FRES) 934.00p +2.02%
FTSE 100 - Fallers
Tesco (TSCO) 277.65p -3.81%
Morrison (Wm) Supermarkets (MRW) 171.10p -1.50%
Royal Mail (RMG) 459.50p -1.39%
Shire Plc (SHP) 4,904.00p -1.35%
Sainsbury (J) (SBRY) 315.00p -1.04%
Pearson (PSON) 1,101.00p -0.45%
GlaxoSmithKline (GSK) 1,550.50p -0.42%
Burberry Group (BRBY) 1,442.00p -0.14%
Kingfisher (KGF) 334.10p -0.12%
Mondi (MNDI) 1,033.00p -0.10%
FTSE 250 - Risers
IG Group Holdings (IGG) 623.50p +8.43%
Beazley (BEZ) 264.20p +6.10%
Hays (HAS) 124.20p +3.41%
Cable & Wireless Communications (CWC) 47.47p +2.99%
BlackRock World Mining Trust (BRWM) 504.00p +2.77%
Rathbone Brothers (RAT) 1,988.00p +2.69%
Telecity Group (TCY) 804.00p +2.55%
TalkTalk Telecom Group (TALK) 320.30p +2.43%
Hunting (HTG) 867.50p +2.42%
Entertainment One Limited (ETO) 340.00p +2.29%
FTSE 250 - Fallers
Tullett Prebon (TLPR) 245.80p -2.85%
Croda International (CRDA) 2,154.00p -2.71%
Ted Baker (TED) 1,668.00p -1.88%
Bodycote (BOY) 665.00p -1.63%
Spectris (SXS) 2,104.00p -1.59%
Exova Group (EXO) 235.10p -1.55%
Spirent Communications (SPT) 97.10p -1.52%
UBM (UBM) 645.50p -1.38%
Morgan Advanced Materials (MGAM) 296.00p -1.33%
JD Sports Fashion (JD.) 390.40p -1.19%