London midday: Stocks pop higher as banks rally; Fed announcement eyed

(Sharecast News) - London stocks had popped into the black by midday on Monday, but gains were muted as investors eyed the latest policy announcement from the US Federal Reserve later in the week and a raft of corporate updates. The FTSE 100 was up 0.3% at 7,299.72, with US stock futures on the rise.

Richard Hunter, head of markets at Interactive Investor, said: "The latest Federal Reserve decision on interest rates will be announced on Wednesday, with the likelihood of a further 0.75% hike very much baked into the cake. There is also the release of the second-quarter US GDP number, which could show another negative reading.

"With a packed corporate calendar ahead, including results from the likes of Apple, Amazon, Meta Platforms, Microsoft and Alphabet, the indices have been unable to shake off recessionary fears. In the year to date, the Dow Jones is down by 12%, the S&P500 by 17% and the Nasdaq by 24%.

"Nor is the earnings reporting pace slowing in the UK, with numbers expected from the likes of Shell and Unilever, as well as updates from Lloyds Banking, Barclays, Standard Chartered and NatWest. For the banks, eyes will be on whether any credit quality deterioration is being experienced and, of equal importance, whether the banks will be setting aside further cautionary provisions after beginning a new trend at the firs-quarter numbers. More positively, the banks are expected to remain awash with capital, providing the possibility of further shareholder returns either through buybacks or additional dividend payments."

Investors were mulling over the latest survey from the Confederation of British Industry, which showed that industrial output grew at the slowest pace in more than a year in the three months to July, reflecting softer demand domestically and internationally.

The CBI's industrial trends survey revealed that its output balance dropped to +6 for July from +19 in April.

"The manufacturing sector has been an economic bright spot in recent months, but output and orders have softened amid ongoing cost pressures, supply challenges and a generalised weakening in economic conditions both in the UK and globally," CBI deputy chief economist Anna Leach said.

In equity markets, banks were among the top performers, with Standard Chartered, NatWest, HSBC and Lloyds all up ahead of trading updates later in the week.

Molten metal flow engineer Vesuvius surged after saying that full-year trading profit was set to be towards to the top of the range of analyst expectations following better-than-expected trading in May and June.

Ferrexpo was boosted by an upgrade to 'outperform' at Credit Suisse, while Oxo and Mr Kipling owner Premier Foods rallied after agreeing to buy Asian meal kits and accompaniments brand The Spice Tailor for an initial £43.8m in cash.

Elsewhere, telecoms group Vodafone was little changed as it reported a rise in first-quarter revenues, driven by growth in the UK, but reported a fall in Germany, its biggest market.

Market Movers

FTSE 100 (UKX) 7,299.72 0.32% FTSE 250 (MCX) 19,846.40 0.11% techMARK (TASX) 4,394.73 0.09%

FTSE 100 - Risers

Standard Chartered (STAN) 588.00p 2.65% BT Group (BT.A) 181.55p 2.45% Airtel Africa (AAF) 168.40p 2.25% NATWEST GROUP PLC ORD 100P (NWG) 229.60p 2.00% HSBC Holdings (HSBA) 524.80p 1.86% Anglo American (AAL) 2,707.00p 1.56% Burberry Group (BRBY) 1,751.00p 1.48% Rio Tinto (RIO) 4,837.00p 1.36% Lloyds Banking Group (LLOY) 43.79p 1.31% Avast (AVST) 509.40p 1.27%

FTSE 100 - Fallers

Ocado Group (OCDO) 772.60p -2.40% JD Sports Fashion (JD.) 138.90p -2.11% Endeavour Mining (EDV) 1,589.00p -1.85% Scottish Mortgage Inv Trust (SMT) 816.00p -1.85% Entain (ENT) 1,158.50p -1.82% Flutter Entertainment (CDI) (FLTR) 8,146.00p -1.57% RS Group (RS1) 1,001.00p -1.28% BAE Systems (BA.) 770.00p -1.28% Prudential (PRU) 990.00p -1.25% Hargreaves Lansdown (HL.) 846.40p -1.21%

FTSE 250 - Risers

Ferrexpo (FXPO) 148.70p 12.14% Vesuvius (VSVS) 347.80p 7.68% 4Imprint Group (FOUR) 3,245.00p 4.17% Premier Foods (PFD) 117.20p 3.72% Auction Technology Group (ATG) 1,022.00p 3.34% TBC Bank Group (TBCG) 1,288.00p 3.21% Volution Group (FAN) 398.50p 2.97% Tullow Oil (TLW) 46.22p 2.85% Beazley (BEZ) 536.00p 2.68% Mitchells & Butlers (MAB) 178.60p 2.47%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 230.00p -3.20% Carnival (CCL) 671.80p -2.92% Darktrace (DARK) 368.00p -2.65% 888 Holdings (DI) (888) 152.60p -2.30% Schroder Oriental Income Fund Ltd. (SOI) 256.00p -2.29% Rathbones Group (RAT) 1,876.00p -1.99% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 507.00p -1.93% Chrysalis Investments Limited NPV (CHRY) 102.00p -1.92% Jupiter Fund Management (JUP) 140.00p -1.89% Ashmore Group (ASHM) 204.00p -1.83%