London close: Stocks finish firmer after tsunami of earnings

London's stock markets closed firmer on Thursday, backed by a slew of corporate earnings and a substantial policy decision by the US Federal Reserve.

The Fed's overnight announcement saw interest rates reach their highest levels in 22 years, after a hike was widely anticipated by markets.

At the close, the FTSE 100 was up 0.21% at 7,692.76, while the FTSE 250 saw a more substantial rise of 0.45% to 19,273.37.

On the currency front, sterling was last down 0.78% against the dollar to trade at $1.2840, while it strengthened 0.03% on the euro to change hands at €1.1678.

“While the FTSE’s surge has slowed this week, the overall picture remains firmly bullish,” said IG chief market analyst Chris Beauchamp.

“Shell and Barclays have been the big detractors this afternoon, but despite this the index seems to have more upside ahead.

“Looking ahead, the Bank of England seems set to follow the Fed and ECB’s lead on rates, and a dovish tone next week should help UK stocks to make up some lost ground.”

Significant drop in UK retail sales while US job market shows strength

In economic news, the British retail sector saw a rapid contraction in sales in the year to July, experiencing the fastest decline rate since April 2022, based on the latest data from the Confederation of British Industry (CBI).

The CBI’s distributive trades survey for the month recorded a sharp fall in the retail sales balance to -25, down from -9 in June.

That downward trajectory was projected to continue, with expectations for the upcoming month plummeting to -32 from a neutral zero.

Moreover, the measurement for orders placed with suppliers saw a steep drop, at the quickest rate since January 2021, slumping to -39% from -10% the previous month.

“Firms remain cautious about the retail sector’s near-term outlook as they pare back on orders and brace themselves for another sales contraction in the year to August,” said CBI principal economist Martin Sartorius.

“Cost pressures, a tight labour market, and rising interest rates, alongside uncertain demand conditions, make the current environment difficult to navigate for retailers.

“Now more than ever, business rates reform would go a long way to alleviate cost pressures in the retail sector, which burden them disproportionately compared to other businesses.”

Across the pond, the US job market demonstrated surprising fortitude in data released on Thursday afternoon.

Figures from the Department of Labor showed a decrease of 7,000 in initial unemployment claims in the week ended 22 July, bringing the total to 221,000.

That defied the expectations of economists surveyed by Dow Jones Newswires, who had anticipated a reading of 235,000.

Further emphasising the trend, the four-week moving average - designed to level weekly data fluctuations - also declined by 3,750, settling at 233,750.

Energy giant Centrica leads London equities rise, St James’s Place suffers setback

On London’s equity markets, Centrica, the parent company of British Gas, surged 7.54% following an impressive leap in interim profits.

In the six months ended 30 June, its adjusted operating profit skyrocketed to £2.1bn, up from £1.3bn in the same period last year.

Earnings per share followed suit, rising to 25.8p from 11p.

Notably, the company turned a statutory operating profit of £6.5bn - a significant turnaround from a £1.1bn loss a year earlier.

Its subsidiary British Gas Energy saw adjusted operating profits soar 889% to £969m, driven by changes to the energy price cap allowing cost recovery amid climbing energy prices.

Other major risers included Informa, Relx, Airtel Africa, Jupiter Fund Management, Inchcape, Elementis, and ITV, which all posted gains following their results, rising by 4.08%, 4.68%, 3.56%, 6.38%, 8.59%, 2.03%, and 4.14%, respectively.

On the downside, St James’s Place shares took a steep tumble, dropping by 16.03%.

The asset manager disclosed falling interim profits due to market volatility, though it still managed £3.4bn in net inflows.

Barclays shares dipped 5.28% despite the bank revealing a 22% increase in pre-tax profits for the six months to 30 June to £4.5bn, alongside elevated provisions for bad loans.

The bank's bad loan charges soared to £900m - a sharp rise from £341m.

Meanwhile, Shell's shares declined 1.63% after the energy giant reported a substantial fall in second-quarter profits.

The reduction was attributed to the drop in oil and gas prices, marking a contrast to the price surge seen last year after Russia's invasion of Ukraine.

Shares in Mobico Group, Indivior, and Drax Group also fell on earnings results, declining by 11.13%, 2.61%, and 2.48% respectively.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,692.76 0.21%
FTSE 250 (MCX) 19,273.37 0.45%
techMARK (TASX) 4,456.69 0.34%

FTSE 100 - Risers

Centrica (CNA) 133.35p 7.54%
Relx plc (REL) 2,661.00p 4.68%
Informa (INF) 776.00p 4.08%
Airtel Africa (AAF) 114.20p 3.56%
Burberry Group (BRBY) 2,248.00p 3.02%
Frasers Group (FRAS) 801.00p 2.82%
Smith (DS) (SMDS) 308.90p 2.62%
Flutter Entertainment (CDI) (FLTR) 15,340.00p 2.54%
Melrose Industries (MRO) 526.40p 2.49%
Rolls-Royce Holdings (RR.) 189.60p 2.49%

FTSE 100 - Fallers

St James's Place (STJ) 993.40p -16.03%
SSE (SSE) 1,701.00p -5.87%
Barclays (BARC) 155.40p -5.28%
Endeavour Mining (EDV) 1,861.00p -3.63%
BT Group (BT.A) 123.90p -2.06%
Vodafone Group (VOD) 76.16p -1.77%
SEGRO (SGRO) 772.40p -1.73%
Unite Group (UTG) 963.00p -1.68%
Persimmon (PSN) 1,185.00p -1.54%
Fresnillo (FRES) 614.20p -1.41%

FTSE 250 - Risers

Inchcape (INCH) 847.00p 8.59%
Mitchells & Butlers (MAB) 233.00p 8.27%
Carnival (CCL) 1,310.00p 6.94%
Jupiter Fund Management (JUP) 115.80p 6.38%
Aston Martin Lagonda Global Holdings (AML) 372.20p 6.34%
Bakkavor Group (BAKK) 107.00p 5.94%
Ferrexpo (FXPO) 94.65p 4.45%
ITV (ITV) 72.46p 4.14%
Vesuvius (VSVS) 454.20p 4.03%
Future (FUTR) 798.00p 4.03%

FTSE 250 - Fallers

Mobico Group (MCG) 95.00p -11.13%
Quilter (QLT) 78.30p -5.09%
Synthomer (SYNT) 81.60p -4.45%
Centamin (DI) (CEY) 94.80p -2.92%
Bridgepoint Group (Reg S) (BPT) 190.90p -2.70%
Molten Ventures (GROW) 274.20p -2.63%
Indivior (INDV) 1,826.00p -2.61%
Rathbones Group (RAT) 1,802.00p -2.49%
Drax Group (DRX) 604.40p -2.48%
IG Group Holdings (IGG) 724.00p -2.43%