London open: NatWest and StanChart pacing early gains

London stocks were trading higher shortly after the session of the session as investors digested a raft of corporate earnings announcements.

As of 0856 BST, the FTSE 100 was up by 22.32 points to 7,367.54, alongside a 0.98% gain for the second-tier index to 20,049.91.

In parallel, futures for the US Nasdaq-100 were climbing by 164.25 points to 12,901.75, as investors cheered the latest quarterly results out of Amazon.com and Apple released overnight.

Shares of the former ran up by nearly 14% in after-hours trading in New York.

Regarding the market backdrop, investors and analysts were still getting their heads around data published the day before, showing that the US economy slipped into a so-called 'technical recession' after gross domestic product shrank for a second quarter running over the three months to June.

"With that in mind markets have started to price out the prospect of more aggressive action by central banks when it comes to raising rates, pushing yields lower and giving a boost to equity markets," said Michael Hewson, chief market analyst at CMC Markets UK.

"In that context we can expect to see a higher European open, as German 2-year yields hit two month lows."

On the economic calendar for Friday, at 0930 BST the Bank of England was scheduled to release consumer credit and mortgage lending figures for the month of June.

Across the Channel meanwhile, at 1000 BST, preliminary figures from Eurostat were expected to reveal a slight increase in the annual rate of euro area consumer price inflation from 8.6% for June to 8.7% in July.

Another report from Eurostat at that same hour was expected to show that the rate of gross domestic product growth in the single currency bloc slowed from a 0.6% quarter-on-quarter pace over the first three months of 2022 to only 0.1% in the three months to June.

However, earlier figures released in Spain showed the economy bounded ahead at a quarter-on-quarter pace of 1.1% in the second quarter (consensus: 0.4%), while in France it expanded at a clip of 0.5% (consensus: 0.2%).

And in the US, a slew of inflation indicators were due out, including the second quarter employment cost index and price deflators for personal consumption expenditures in June, both at 1330 BST.

Courtesy of the University of Michigan, gauges of consumers' inflation expectations for the month of July would follow at 1500 BST.

Lenders pace early gains

NatWest beat analysts' estimates for both operating pre-tax proit and total income for its second quarter. The lender posted pretax profits of £1.4bn on £3.21bn of revenues while net profit came in at £1.05bn. Net interest margins meanwhile improved by 26 basis points against the prior quarter to 2.72%. A dividend payout of 3.5p per share was declared for the quarter.

StanChart shares jumped at the end of the week after delivering what the lender itself labelled a "strong" set of first half figures, announced a new $500m share buyback programme and expressed confidence on its full-year targets. Commenting on the group's performance, chief executive officer, Bill Winters, highlighted the "continued positive" momentum seen during the quarter, discipline on expenses and significant savings. Income for the half was ahead by 8% to $8.2bn or by 10% at constant currencies and during the second quarter it was 11% higher at constant currencies. That saw a 10% jump in statutory pre-tax profits for the latest six months to $2.8bn.

Drugmaker AstraZeneca raised full-year revenue guidance on Friday as it provided details of its "strong" first trading half and announced that Michel Demaré would take over as the group's chairman in April 2023. Astra-Zeneca, which reported a 48% increase in interim revenues to $22.16bn, said total revenues were now expected to increase by "a low twenties percentage", up from previous estimates in the "high teens".

IAG returned to profit in the second quarter as its Iberia and Vueling airlines were boosted by post-Covid pandemic demand. The company on Friday said operating profits for the three months to June 30 came in at €293m, compared with a loss of €967m a year earlier. IAG, which also owns British Airways, posted an operating loss for the half year of €438m, significantly lower than 2021’s €2.03bn.

Chemicals company Croda International said on Friday that profits had surged in the six months ended 30 June, driven by improved interim sales and margins. Croda said interim pre-tax profits were up 211% at £636.5m, operating profits were 32.1% higher at £288.6m, and basic earnings per share had grown 254% to 389.6p, driven by a 20.7% increase in revenues to £1.12bn.

UK luxury sportscar maker Aston Martin said first-half losses had widened as supply chain constraints hit production. The company reported a pre-tax loss of £285.4m in the six months to June 30, compared with a loss of £90.7m a year ago. It sold 2,676 vehicles wholesale, compared with 2,901 a year earlier. Aston Martin, which is pinning its hopes on the lucrative Chinese market, said it expected the supply chain issues to unwind in the second half and forecast higher sales after ramping up production of its DBX707 and the V12 Vantage.

Market Movers

FTSE 100 (UKX) 7,382.06 0.50%
FTSE 250 (MCX) 20,049.94 0.98%
techMARK (TASX) 4,352.46 0.40%

FTSE 100 - Risers

NATWEST GROUP PLC ORD 100P (NWG) 246.60p 7.22%
Ocado Group (OCDO) 818.00p 4.10%
Aveva Group (AVV) 2,317.00p 3.85%
Rolls-Royce Holdings (RR.) 89.50p 3.54%
Barclays (BARC) 155.34p 3.33%
Fresnillo (FRES) 718.40p 2.95%
Standard Chartered (STAN) 583.20p 2.89%
Anglo American (AAL) 2,926.50p 2.88%
Scottish Mortgage Inv Trust (SMT) 858.60p 2.75%
Antofagasta (ANTO) 1,145.50p 2.69%

FTSE 100 - Fallers

Intertek Group (ITRK) 4,287.00p -3.97%
AstraZeneca (AZN) 10,586.00p -2.61%
Avast (AVST) 473.00p -2.43%
British American Tobacco (BATS) 3,303.50p -2.05%
BAE Systems (BA.) 763.80p -2.00%
Imperial Brands (IMB) 1,799.00p -1.83%
Pearson (PSON) 754.40p -1.49%
Compass Group (CPG) 1,928.50p -1.25%
Centrica (CNA) 87.94p -1.01%
Airtel Africa (AAF) 156.90p -0.88%

FTSE 250 - Risers

Ferrexpo (FXPO) 151.80p 6.30%
Vesuvius (VSVS) 344.60p 6.03%
Hochschild Mining (HOC) 81.55p 4.35%
Countryside Partnerships (CSP) 293.60p 4.34%
Indivior (INDV) 328.00p 4.19%
Morgan Advanced Materials (MGAM) 315.00p 3.96%
Carnival (CCL) 669.40p 3.72%
Kainos Group (KNOS) 1,323.00p 3.68%
CMC Markets (CMCX) 255.50p 3.65%
National Express Group (NEX) 182.60p 3.63%

FTSE 250 - Fallers

Jupiter Fund Management (JUP) 120.80p -5.99%
Babcock International Group (BAB) 337.00p -2.60%
Bankers Inv Trust (BNKR) 103.20p -1.71%
Baillie Gifford Japan Trust (BGFD) 751.00p -0.92%
Templeton Emerging Markets Inv Trust (TEM) 148.80p -0.80%
Fidelity China Special Situations (FCSS) 259.00p -0.77%
Moneysupermarket.com Group (MONY) 208.00p -0.67%
BH Macro Ltd. GBP Shares (BHMG) 4,570.00p -0.65%
Plus500 Ltd (DI) (PLUS) 1,643.00p -0.60%
Caledonia Investments (CLDN) 3,730.00p -0.53%