London close: Stocks rise on back of well-received earnings

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Standard Chartered

972.00p

16:34 20/12/24

-1.18%

-11.60p

London’s stocks finished with gains on Thursday, fuelled by strong performances from key players like Standard Chartered and Smurfit Kappa.

TI Fluid Systems

193.20p

17:15 20/12/24

0.00%

0.00p

Investors were also focussed on the overnight policy update from the US Federal Reserve, which opted to maintain interest rates.

The FTSE 100 rose 0.63% to reach 8,172.15 points by the end of trading, while the FTSE 250 saw an uptick of 0.63% as well, to 20,052.33.

In currency markets, sterling was last down 0.18% on the dollar, trading at $1.2505, while it decreased 0.09% against the euro to change hands at €1.1682.

“The FTSE 100 once again rules the roost in Europe, with mainland European markets returning to action with a largely downbeat tone,” said Scope Markets chief market analyst Joshua Mahony earlier.

“Financials and commodity-focused stocks remain at the forefront of the FTSE’s push higher, with Standard Chartered standing out as the morning’s big outperformer thanks to a healthy 6% gain for the Asia-focused bank.

“While markets have spent much of their time concerned over the implications of a higher for longer approach to interest rates, today’s Standard Chartered earnings serve to highlight the potential benefits for those financial institutions whose businesses have benefited from improved margins.”

UK growth forecast downgraded, US jobless claims steady

In economic news, the OECD said it now expected UK GDP growth to remain sluggish, influenced by restrictive monetary policies.

The latest forecast predicted a 0.4% growth rate for 2024, lower than previous estimates, with a slight uptick to 1.0% in 2025.

That downgrade reflected a “waning drag from past monetary tightening”.

Inflation was expected to moderate, although persistent service price pressures could keep it above the Bank of England's target, at 3.3% in 2024 and 2.5% in 2025.

“The fiscal and monetary policy mix is adequately restrictive, and should remain so until inflation returns durably to target,” the OECD said.

“Fiscal policy should remain prudent and focus on productivity-enhancing public investment when the monetary stance normalises.

“Reforming property taxation can help rebuild fiscal buffers and promote both efficiency and progressivity.”

Across the Atlantic, the US Labor Department reported that the number of Americans filing for unemployment benefits remained steady at 208,000, the lowest level in two months and below market expectations.

It marked the fourth consecutive week of stronger-than-expected results, indicating ongoing tightness in the labour market.

Notable declines were seen in California and Massachusetts.

Meanwhile, America's trade deficit saw minimal change in March, with both exports and imports experiencing significant declines.

The trade deficit in goods and services reached $69.4 billion, with exports shrinking by 2.0% and imports down by 1.6%.

Economists had forecast a similar deficit.

Elsewhere, Germany’s manufacturing sector showed slight signs of improvement, with the country’s manufacturing purchasing managers' index (PMI) rising to 42.5 in April, up from 41.9 in March.

While remaining in contraction territory, the output index strengthened to 45.2, supported by improvements in the intermediate goods category.

Standard Chartered, Smurfit Kappa shine in London trading

On London’s equity markets, Standard Chartered rose 8.78% after it affirmed its full-year guidance and surpassed expectations with its first-quarter profits.

The bank reported a 6% increase in pre-tax profit to $1.9bn, surpassing expectations by a significant margin.

Similarly, net profit surged 5% to $1.22bn, comfortably exceeding forecasts.

Smurfit Kappa Group also experienced a notable uptick, rising 5.76% after reporting a “very strong” first quarter.

The company highlighted improved box demand, especially in Europe and the Americas.

Oil and gas giant Shell advanced 2.31% following a 15% increase in earnings for the first quarter.

Higher margins from crude and oil products trading contributed to the positive performance, and the company announced a new $3.5bn share buyback.

Fluid engineering specialist TI Fluid Systems saw its shares climb by 4.25%, maintaining guidance despite a slight decline in first-quarter revenues, which was in line with expectations.

On the downside, Relx, Glencore, Inchcape, and IWG all experienced declines as they traded ex-dividend.

Melrose Industries lost 2.93% despite reporting revenue growth and reaffirming its guidance for the year.

Hiscox shares fell 3.45% even after the company reported a rise in first-quarter written premiums, driven by accelerated growth in the retail segment.

Endeavour Mining slipped 0.24% after it reported a drop in production and selling volumes in the first quarter, along with increased costs, although adjusted profits aligned with expectations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,172.15 0.63%
FTSE 250 (MCX) 20,052.33 0.63%
techMARK (TASX) 4,600.98 0.31%

FTSE 100 - Risers

Standard Chartered (STAN) 756.00p 8.78%
Smurfit Kappa Group (CDI) (SKG) 3,674.00p 5.76%
Prudential (PRU) 728.60p 3.35%
International Consolidated Airlines Group SA (CDI) (IAG) 178.30p 3.03%
Scottish Mortgage Inv Trust (SMT) 857.60p 2.85%
Diploma (DPLM) 3,710.00p 2.54%
Flutter Entertainment (DI) (FLTR) 15,265.00p 2.45%
London Stock Exchange Group (LSEG) 9,056.00p 2.44%
Taylor Wimpey (TW.) 133.70p 2.41%
Intermediate Capital Group (ICG) 2,130.00p 2.40%