London midday: FTSE 100 starts August on the front foot

London shares were modestly higher shortly after midday with the buying seen across July having carried over into the start of the month.

Some analysts in the City credited "solid" company earnings and a weaker US dollar, as a function of lowered expectations for interest rate hikes by the Federal Reserve, for the continued buying appetite - although there was underlying cautious.

On that note, Neil Wilson, chief market analyst at Markets.com, was telling clients: "Solid earnings, easing around inflation worries and some repricing around the Fed, plus a weaker dollar, has enabled a strong bear market rally.

"The S&P 500 can probably still hit 4,200, but I wouldn’t give it too much beyond that, even though the market could be happy to ride this bear market rally narrative for the summer. No one cares if it’s a technical recession or not.

"The market is way too complacent still because the Fed is not done yet."

Against that backdrop, as of 1310 BST, the FTSE 100 was ahead by 0.46% or 33.79 points to 7,457.22, alongside a 0.53% advance for the pound to 1.2235.

US European and US markets recorded their best monthly performance in July since November 2020.

Key Chinese factory sector surveys released overnight had underlined the near-term challenges that the global economy was facing.

Survey compiler Caixin reported a decline in its China Purchasing Managers' Index for manufacturing covering the month of July from a reading of 51.7 for June to 50.4 (consensus: 51.5), mirroring a drop seen in the 'official' PMI that was released at the weekend.

"This marks the start of the H2 weakness we expected, as the data normalises after waves of disruption tied to the Omicron wave and related restrictions," said Craig Botham, China+ economist at Pantheon Macroeconomics.

For its part, S&P Global revised its UK manufacturing PMI for July from 52.2 to 52.1 (consensus: 52.2), which was down from 52.8 in June.

A rival gauge for the euro area on the other hand was marked up from a preliminary reading of 49.6 to 49.8, but remained down from 52.1 in June.

Nonetheless, S&P global cautioned that the rate of decline in new orders in the single currency bloc was the "sharpest since the debt crisis in 2012, with worse likely to come."

Still on the economic calendar for later, the US ISM Institute's own manufacturing PMI was set for release at 1500 BST.

Pearson and HSBC please investors

Publishing company Pearson said on Monday that it had delivered a "strong financial performance" in the six months ended 30 June, leading the group to reiterate guidance for the full year. Pearson said underlying sales had grown 6% to £1.78bn during the first half of the year, while adjusted operating profits surged £33.0m to £160.0m, principally driven by an "encouraging" trading performance, FX benefits and property savings.

HSBC reported a fall in first-half profits on Monday but pledged to resume quarterly dividends next year as its annual outlook remained positive. The banking giant posted a pre-tax profit of $9.17bn, down more than 15% year-on-year, despite reporting a modest 2% uptick in interim revenues to $12.8bn.

Food producer Cranswick said on Monday that revenues had grown 7.6% year-on-year in the 13 weeks ended 25 June. Cranswick said like-for-like revenues were 5.8% higher, with strong growth in its core UK market partly offset by expected lower export revenue. Far East export sales were lower than in the same quarter a year earlier due to market prices falling from elevated levels experienced over the previous two years.

Market Movers

FTSE 100 (UKX) 7,457.00 0.45%
FTSE 250 (MCX) 20,137.94 -0.13%
techMARK (TASX) 4,357.23 -0.47%

FTSE 100 - Risers

Pearson (PSON) 836.40p 10.55%
HSBC Holdings (HSBA) 552.90p 7.63%
Standard Chartered (STAN) 580.80p 2.94%
Barclays (BARC) 161.18p 2.54%
NATWEST GROUP PLC ORD 100P (NWG) 254.80p 2.49%
BAE Systems (BA.) 789.20p 2.49%
Centrica (CNA) 89.84p 2.44%
Rightmove (RMV) 650.40p 1.69%
Ocado Group (OCDO) 853.40p 1.67%
Berkeley Group Holdings (The) (BKG) 4,305.00p 1.58%

FTSE 100 - Fallers

Intertek Group (ITRK) 4,242.00p -3.06%
Smith & Nephew (SN.) 1,031.00p -1.58%
Ashtead Group (AHT) 4,531.00p -1.31%
AstraZeneca (AZN) 10,728.00p -1.07%
GSK (GSK) 1,709.20p -1.07%
RS Group (RS1) 1,023.00p -0.97%
Coca-Cola HBC AG (CDI) (CCH) 1,994.00p -0.89%
Smiths Group (SMIN) 1,529.50p -0.84%
DCC (CDI) (DCC) 5,308.00p -0.79%
Halma (HLMA) 2,281.00p -0.78%

FTSE 250 - Risers

Quilter (QLT) 120.40p 14.67%
Jupiter Fund Management (JUP) 133.50p 6.46%
Rathbones Group (RAT) 1,888.00p 4.31%
Aston Martin Lagonda Global Holdings (AML) 499.00p 4.31%
Shaftesbury (SHB) 518.00p 3.19%
Polymetal International (POLY) 201.00p 3.08%
Babcock International Group (BAB) 352.60p 2.98%
Mitchells & Butlers (MAB) 177.90p 2.65%
Virgin Money UK (VMUK) 147.00p 2.65%
Currys (CURY) 68.20p 2.40%

FTSE 250 - Fallers

Ascential (ASCL) 254.80p -12.74%
XP Power Ltd. (DI) (XPP) 2,660.00p -12.50%
Spectris (SXS) 2,946.00p -5.24%
RHI Magnesita N.V. (DI) (RHIM) 2,166.00p -3.82%
Vesuvius (VSVS) 348.80p -3.06%
Clarkson (CKN) 3,330.00p -3.06%
Darktrace (DARK) 364.30p -2.83%
Indivior (INDV) 312.40p -2.74%
CMC Markets (CMCX) 251.00p -2.52%
Chrysalis Investments Limited NPV (CHRY) 102.60p -2.47%