London close: Stocks rally as traders assess earnings and data

London stocks gained on Tuesday as traders waded through corporate earnings and mixed economic data.

Standard Life shares jumped after it reported an 18% increase in operating profit before tax for the first half thanks to diversification, as its assets under management grew. The insurer and asset manager declared an interim dividend of 6.47p per share, up 7.5% on the first half of last year.

Worldpay rallied after it posted a rise in first-half underlying earnings and pre-tax profit amid strength in all its businesses, as it declared a maiden interim dividend of 0.65p per share.

Legal & General shares headed in the opposite direction as the company painted a gloomy outlook due to uncertainty on the economy, financial markets and politics post Brexit. The FTSE 100 firm posted a mixed set of half year results, which included a slowdown in new client funds at the investment arm.

Meanwhile, banks were in the black as the Competition and Markets Authority ordered UK high street lenders to launch an open banking digital system for the customers by early 2018 to boost competition. Barclays and Royal Bank of Scotland were among the risers.

EasyJet flew higher after Cantor Fitzgerald upgraded the stock to ‘buy’ from ‘hold’ and lifted the price target to 1,300p from 1,200p.

Morrison Supermarket and Ocado gained on a new deal between the two. Morrison's has agreed to take 30% capacity of Ocado new customer fulfilment centre in Erith by 2018, bought a new 'store pick' software licence and eased previous restrictions on the online specialist working with other UK supermarkets.

On the macro-economic data front, the UK trade deficit widened in June as imports outpaced exports. The Office for National Statistics said the UK’s deficit in goods trade widened to £12.4bn in July from £11.5bn in June. Economists had pencilled in a deficit of £10.1bn.

The ONS also revealed that UK industrial production remained stable on a month-to-month basis in the run-up to the Brexit vote. Industrial production in June rose by a slight 0.1%, in line with estimates and rebounding from the revised previous 0.6% decline the month before. On the year production increased 0.9% in June, missing forecasts for 1.3% growth and slowing from the previous month’s 1.5% gain.

Since the ONS data largely covered the pre-EU referendum period, analysts took more interest in the July Retail Sales Monitor from the British Retail Consortium. The BRC-KPMG measure of like-for-like retail sales values rebounded to 1.1% year-over-year in July, thrashing the consensus forecast for a 0.7% decline.

“Although the month’s warmer weather may have provided some support, the main takeaway was that, despite last week’s gloomy consumer confidence data, thus far Brexit doesn’t appear to have had a material impact on retail sales,” said Martin Beck, senior economic advisor to the EY ITEM Club.

The latest estimates on UK gross domestic product (GDP) from the National Institute of Economic and Social Research (NIESR) were also in focus as they showed economic growth halved in the last three months, adding credence to predictions that the economy will contract in the third quarter and then fall into recession.

The NIESR calculated that GDP grew by 0.3% in the three months ending in July, down from 0.6% in the three months to end-June and short of consensus City forecasts for a 0.4% increase.

In the US, wholesale inventories rose a revised 0.3% in June, up from the initial estimate for no change, the Commerce Department said. May was also revised to a 0.2% gain from the previous estimate of a 0.1% increase.

The Labor Department said US productivity fell 0.5% in the second quarter, well below forecasts for a 0.4% increase and following a 0.6% drop the previous quarter.

The National Federation of Independent Business index on US small business optimism rose slightly to 94.6 in July from 94.5 in June, beating expectations for an unchanged reading.

In commodities, oil prices rose with Brent crude up 0.02% to $45.40 per barrel and West Texas Intermediate up 0.2% to $43.14 per barrel at 1641 BST.

Market Movers

FTSE 100 (UKX) 6,852.79 0.64%
FTSE 250 (MCX) 17,679.79 0.70%
techMARK (TASX) 3,519.60 0.48%

FTSE 100 - Risers

Standard Life (SL.) 340.10p 6.78%
Royal Bank of Scotland Group (RBS) 193.00p 4.49%
easyJet (EZJ) 1,078.00p 3.75%
TUI AG Reg Shs (DI) (TUI) 1,016.00p 3.73%
Standard Chartered (STAN) 669.00p 3.02%
Worldpay Group (WI) (WPG) 309.00p 2.52%
Marks & Spencer Group (MKS) 338.70p 2.51%
Smiths Group (SMIN) 1,322.00p 2.48%
Barclays (BARC) 161.20p 2.41%
Tesco (TSCO) 158.10p 2.26%

FTSE 100 - Fallers

Legal & General Group (LGEN) 206.70p -5.23%
Carnival (CCL) 3,600.00p -2.07%
Sky (SKY) 898.00p -1.10%
Aviva (AV.) 418.50p -1.06%
Antofagasta (ANTO) 525.50p -1.04%
Paddy Power Betfair (PPB) 9,180.00p -0.60%
3i Group (III) 631.00p -0.47%
Travis Perkins (TPK) 1,558.00p -0.45%
Direct Line Insurance Group (DLG) 392.30p -0.38%
ITV (ITV) 198.80p -0.35%

FTSE 250 - Risers

Amec Foster Wheeler (AMFW) 521.00p 11.71%
Entertainment One Limited (ETO) 217.50p 9.90%
Ocado Group (OCDO) 293.00p 6.04%
Spirax-Sarco Engineering (SPX) 4,348.00p 6.00%
Tullow Oil (TLW) 220.20p 4.61%
Debenhams (DEB) 58.45p 4.56%
Petrofac Ltd. (PFC) 820.00p 4.33%
Marshalls (MSLH) 283.60p 4.00%
Polypipe Group (PLP) 265.20p 3.23%
Restaurant Group (RTN) 371.90p 3.13%

FTSE 250 - Fallers

SIG (SHI) 100.60p -6.07%
PayPoint (PAY) 989.00p -3.51%
JRP Group (JRP) 99.15p -2.51%
Sophos Group (SOPH) 226.30p -2.50%
Hastings Group Holdings (HSTG) 200.00p -2.44%
Galliford Try (GFRD) 988.00p -2.27%
Aberdeen Asset Management (ADN) 328.20p -2.21%
Tullett Prebon (TLPR) 351.50p -2.01%
Pendragon (PDG) 32.92p -1.99%
Genus (GNS) 1,901.00p -1.91%