London midday: FTSE maintains gains amid heavy corporate flow; Fed in focus

dl city of london street bus tax black cab pedestrians transport for london tfl commuting travel working square mile financial district trading finance unsplash — Sharecast / Mariana Alves via Unsplash

London stocks were still in the black by midday on Wednesday, helped along by well-received updates from the likes of Smurfit and Reckitt, as investors looked ahead to the latest policy announcement from the US Federal Reserve.

The FTSE 100 was up 0.5% at 7,344.38.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 was higher on Wednesday morning, buoyed by some positive corporate results and news from the US overnight as Microsoft and Alphabet reported numbers which were not as bad as some may have feared.

"US stocks had fallen ahead of the tech giants’ earnings thanks to Walmart’s profit warning. Although Microsoft and Google-owner Alphabet were behind expectations, it turned out to be only modestly so.

"A lot of the headwinds facing Microsoft relate to the strong dollar and production shutdowns in China, these are external factors outside the firm’s control and which don’t say too much about the underlying health of the business.

"However, with Alphabet one of its engines of growth, in the form of ad sales on its Youtube platform, is starting to splutter and this could be a more serious long-term issue.

"All the focus tonight will be on the US Federal Reserve and whether it does or says anything to upset what remains a rather jittery market."

In equity markets, corrugated packaging company Smurfit Kappa was up after it reported a rise in first-half profit and revenue despite increasing input costs and supply chain issues. Peers Mondi and DS Smith also gained.

Consumer goods giant Reckitt Benckiser rallied as it lifted its full-year sales outlook following a "strong" first half. The group said second-quarter like-for-like revenue grew 11.9% at constant currency as it hiked prices by 9.7%. The company now expects LFL net revenue growth of 5% to 8%, up from previous guidance that it would be at the upper end of a range of 1% to 4%. It also expects growth in adjusted operating margins.

Lloyds Bank was also in the black as it lifted annual guidance after a rise in net income for the half-year due to rising interest rates, and despite a fall in pre-tax profits.

Wizz Air flew higher despite reporting wider first-quarter operating losses as it was hit by higher fuel costs, as it forecast a material operating profit as revenue and pricing momentum continue to improve, and said levels of disruption at airports had started to normalise. EasyJet also rose.

GlaxoSmithKline was little changed after lifting its full-year outlook and posting a jump in second-quarter sales.

On the downside, student accommodation provider Unite Group was down even as it reported a jump in interim profits and said reservations are now ahead of pre-pandemic levels.

Rio Tinto lost ground after the miner posted a decline in first-half profit and cut its dividend.

Provident Financial was weaker even as the subprime lender said it swung to an interim profit following the wind down of its consumer credit division.

Market Movers

FTSE 100 (UKX) 7,344.38 0.52%
FTSE 250 (MCX) 19,654.82 0.44%
techMARK (TASX) 4,369.25 0.56%

FTSE 100 - Risers

Smurfit Kappa Group (CDI) (SKG) 2,842.00p 5.18%
Mondi (MNDI) 1,482.50p 4.66%
Smith (DS) (SMDS) 278.50p 4.62%
Reckitt Benckiser Group (RKT) 6,658.00p 4.46%
International Consolidated Airlines Group SA (CDI) (IAG) 117.58p 3.91%
Lloyds Banking Group (LLOY) 45.18p 3.78%
Ocado Group (OCDO) 760.00p 3.26%
Entain (ENT) 1,181.00p 3.19%
Flutter Entertainment (CDI) (FLTR) 8,028.00p 3.16%
CRH (CDI) (CRH) 3,021.00p 2.93%