London open: FTSE opens higher as IMF gives green light to Greek talks
London's top flight index was holding on to slight gains at the start of the session, as analysts continued to debate the the US central bank's policy statement issued last night.
FTSE 100
7,877.05
17:14 18/04/24
FTSE 250
19,450.67
17:14 18/04/24
FTSE 350
4,334.00
17:14 18/04/24
FTSE All-Share
4,290.02
16:54 18/04/24
Earlier, the Shanghai Stock Exchange Composite index reversed earlier gains in the final stretch of the session to close lower by 2.2% at 3,705.77 points.
On a more positive note, reports were indicating that the International Monetary Fund gave its backing for talks to begin with Greece over a new bailout programme.
As of 09:19 the Footsie was higher by 19.14 points to 6,650.14.
The US Federal Reserve kept the door 'open' to a possible first interest rate increase come September, despite the recent drop in commodity prices, although upcoming labour market reports may hold the key as to the timing of the first rate hike.
Investors seemed unfazed by that prospect, with the US dollar gaining slightly after the policy statement was issued and US 10-year Treasury yields unchanged in its wake.
Analysts on the other hand were left debating the significance of the word "some" into the following phrase from the Fed's post-meeting statement: "The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen SOME further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term."
Commenting on the Federal Open Market Commitee's decision, Barclays said comments on US labour markets and inflation suggested the committee did "not see much slippage in its inflation outlook and is closer to its objective on labor markets".
The bank said it believed "the data will support a September start to the hiking cycle and retain that as our baseline forecast. Should the data slip somewhat, or should international concerns rise to the fore, then the committee could choose caution and delay hikes".
Deutsche Bank's Jim Reid was a bit more circumspect, telling clients: "thousands of analysts around the globe will be spending hours debating the addition of a single word. For us there are still great risks in starting a hiking cycle with the great fragility in the global economy and financial system, however the Fed don't seem to share such a view and it's going to be a close call for September. Much probably depends on the two interim payroll reports and whether commodities stabilise."
Stateside, official estimates are due out today on second quarter GDP, including revisions to the statistics from 2012 to 2014, international trade and weekly unemployment claims.
No official economic statistics were scheduled to be published in the UK.
RBS smashes past forecasts
Royal Bank of Scotland saw profits decline in the second quarter, as a result of lower income at its corporate and institutional banking unit after it was downsized and higher restructuring costs, but nevertheless beat analysts' estimates by a wide margin.
As it revealed 6,500 job cuts, Royal Dutch Shell delivered a 35% decline in adjusted quarterly profits to $3.8bn though this was well ahead of consensus estimates of $3.4bn. The oil major also kept its dividend steady at $0.47 for both A and B shares.
Centrica also revealed a big swathe of job cuts, announcing that it will slash a net 4,000 jobs from its workforce, double the rumoured amount, as it also almost doubled its first-half profit. The company, which said it was aiming to cost cuts by £750m a year by 2020, will cut back investment in oil and gas production by more than half.
AstraZeneca’s second-quarter numbers came in better than expected, with revenue and earnings per share both ahead of analysts’ expectations as generic competition and the effects of a stronger US dollar were offset by the spinning off of assets. Earnings per share fell 8% to $1.21, but this was better than the $1.07 expected.
Industrial engineer Weir Group posted a 75% fall in first-half pre-tax profit due to a downturn in US oil and gas activity. Pre-tax profit in the 26 weeks to 3 July came in at £38.7m down from £157.7m in the same period a year ago, on revenue of £1bn, down 13% from £1.14bn.
Engine manufacturer Rolls-Royce stuck to its current full-year 2015 guidance and chose to emphasise the positive outlook for the year thanks to continued growth in its order book. Management however was still smarting after it was forced to downgrade its guidance for free cash-flow generation on 6 July.
Market Movers
techMARK 3,173.84 -0.10%
FTSE 100 6,639.03 +0.12%
FTSE 250 17,546.90 +0.19%
FTSE 100 - Risers
Royal Dutch Shell 'B' (RDSB) 1,820.00p +2.42%
BG Group (BG.) 1,064.50p +2.36%
Royal Dutch Shell 'A' (RDSA) 1,804.00p +2.24%
AstraZeneca (AZN) 4,279.50p +2.11%
Royal Bank of Scotland Group (RBS) 359.40p +1.76%
Smith & Nephew (SN.) 1,155.00p +1.76%
Taylor Wimpey (TW.) 188.10p +1.46%
Rolls-Royce Holdings (RR.) 740.00p +1.30%
Schroders (SDR) 3,127.00p +1.13%
Barclays (BARC) 287.65p +1.07%
FTSE 100 - Fallers
Babcock International Group (BAB) 1,010.00p -2.79%
BT Group (BT.A) 461.35p -2.57%
Centrica (CNA) 270.40p -1.74%
Shire Plc (SHP) 5,620.00p -1.40%
International Consolidated Airlines Group SA (CDI) (IAG) 544.00p -1.27%
InterContinental Hotels Group (IHG) 2,595.00p -1.07%
Carnival (CCL) 3,402.00p -0.90%
Mondi (MNDI) 1,531.00p -0.78%
Dixons Carphone (DC.) 452.00p -0.77%
Diageo (DGE) 1,826.00p -0.73%
FTSE 250 - Risers
Hellermanntyton Group (HTY) 470.50p +41.67%
Laird (LRD) 376.90p +7.75%
Inchcape (INCH) 806.50p +7.18%
Henderson Group (HGG) 273.70p +3.17%
Acacia Mining (ACA) 246.70p +2.54%
Barr (A.G.) (BAG) 593.00p +2.33%
Aldermore Group (ALD) 264.10p +2.01%
Jupiter Fund Management (JUP) 461.30p +1.94%
Pets at Home Group (PETS) 279.30p +1.90%
IP Group (IPO) 207.80p +1.86%
FTSE 250 - Fallers
Countrywide (CWD) 520.50p -5.88%
Investec (INVP) 583.00p -2.83%
Vedanta Resources (VED) 389.00p -2.38%
Premier Farnell (PFL) 136.90p -2.21%
Rentokil Initial (RTO) 143.50p -1.65%
Ocado Group (OCDO) 392.50p -1.58%
Thomas Cook Group (TCG) 124.50p -1.50%
Zoopla Property Group (WI) (ZPLA) 239.70p -1.44%
Kaz Minerals (KAZ) 170.30p -1.39%
Melrose Industries (MRO) 273.90p -1.26%