MARKET REPORT: FTSE ends its two-day losing streak as oil stocks rally on the back of higher Brent Crude prices

By John Abiona

Published: 17:09 EDT, 9 August 2023 | Updated: 17:09 EDT, 9 August 2023

The London stock market ended its two-day losing streak as heavyweight oil stocks rallied on the back of higher Brent Crude prices.

On a steady day of gains, the FTSE 100 rose 0.8 per cent, or 59.88 points, to 7587.30 while the FTSE 250 was up 0.51 per cent, or 95.66 points, to 18937.20.

It came as the price of Brent Crude added almost 2.5 per cent to reach more than $87 a barrel, its highest level since April.

That helped BP rise 2.6 per cent, or 12.65p, to 492.65p while Shell added 2.4 per cent, or 56.5p, to 2428.5p.

The oil market has remained tight due to production cuts led by Opec and its allies alongside concerns over Russian shipments. 

Gushing gains: The price of Brent Crude added nearly 1% to reach almost $87 a barrel, its highest level since April

Ukrainian president Volodymyr Zelensky yesterday vowed to fight back if Russia blocked its ports, sparking fears that supply in the Black Sea could be disrupted.

Michael Hewson, chief market analyst at CMC Markets, said: ‘With US inventory levels seeing large declines in recent weeks, the outlook for prices appears to be tilted more to the upside, unless fresh supply comes to market.’

Hill & Smith, the safety barrier maker, delivered a record set of half-year results following strong trading across its US businesses. 

Revenue of £420.8million in six months to the end of June were 20 per cent higher than the year before while profit surged 43 per cent to £62.5million.

It said its US businesses now made up 73 per cent of group profit, which is now likely to beat market expectations of £111.8million for 2023.

The shares rose 7 per cent, or 110p, to 1680p. But Hiscox headed in the other direction after the insurer sounded a note of caution regarding growth in its retail division. 

Stock Watch -RM

RM, which provides technology and resources to the education sector, fell 20.2 per cent, or 14.2p, to 56p after it said profit will be lower than hoped.

Consortium, its UK classroom supplies business, was hit by delays in launching an ecommerce platform and smaller school budgets, affecting results, as revenues of £87.6million in the six months to the end of May were down 11 per cent  against the same period a year ago.

It made a loss of £4.5million. Profit for the year should be ‘on or around break-even’.

The unit, which is made up of businesses in the UK, Europe, USA and Asia, reported a 5.5 per cent increase in insurance contract written premiums to £996million in the six months to the end of June.

But overall retail growth was hindered amid increased competition. Its insurance revenues of £1.5billion were 3 per cent higher than the same period last year while profits rose from £19.9million to £207.8million. Shares sank 6 per cent, or 67p, to 1046p.

Intercontinental Hotels Group rose 2.5 per cent, or 144p, to 5934p after target price upgrades from Morgan Stanley and JP Morgan, a day after the Holiday Inn and Crowne Plaza owner’s profits surged as travel demand rebounded.

The feel-good factor at IWG accelerated as investors made a dash towards the office space provider’s stock on the back of its positive sets. 

Yesterday it said revenue rose to £1.5billion in the first six months of this year, up 15 per cent on the £1.3billion it recorded in the same period of last year. Shares soared 9.8 per cent, or 14.8p, to 166.3p.

TP ICAP, the world’s largest interdealer broker, cashed in on higher oil and gas prices.

Profits of £91million in the first six months of this year were more than a quarter above the same period a year earlier while revenue rose 5 per cent to £1.13billion. 

It also launched a share buyback worth up to £30million, alongside freeing up £100million of cash to pay down debt six months ahead of schedule.

The shares climbed by 7 per cent, or 10.8p, to 165.3p.

Office space landlord CLS Holdings warned the property market will remain challenging until interest rates have peaked.

The bleak outlook came as the group swung to a loss of £106.4million in the first six months of 2023, having made a £21.3million profit the year before.

And the value of its portfolio at the end of June was 5.5 per cent lower than the same period last year.

CLS failed to make any acquisitions during the first half because of the tough market conditions and said it did not expect to for at least the rest of 2023. Shares slumped 8.5 per cent or 12.2p, to 131.2p.

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Mining stocks pressed higher amid reports that China could unveil a major stimulus package to turbocharge its economy.

The Chinese government is considering new measures to prop up its faltering property market.

Actions could include cutting the down payment for a mortgage in some neighbourhoods, reducing agent commissions on deals, and relaxing restrictions for residential purchases, Bloomberg reported.

It comes as the world’s second-largest economy could provide further policy support as part of its post-pandemic recovery.

Such hopes lifted China-exposed stocks, with Anglo American adding 5.2 per cent, or 118.5p, to 2418p, while Antofagasta was up 5.5 per cent, or 76.5p, to 1459.5p, Glencore gained 4.1 per cent, or 17p, to 433.9p and Rio Tinto climbed by 3.8 per cent, or 184p, to 5070p.

Digging deep: The world’s second-largest economy could provide extensive policy support as part of its post-pandemic recovery, boosting China-exposed stocks such as miners

There were also gains for Prudential, the insurer, which increased by 5.7 per cent, or 62p, to 1153p, while banking giant Standard Chartered rose 3.8 per cent, or 22.4p, to 664p.

The London stock market ended the week in positive territory, with the FTSE 100 up 1.6 per cent, or 117.01 points, to 7607.28, while the FTSE 250 climbed 1.7 per cent, or 321.55 points, to 19,149.31.

There was a double dose of major news across the Atlantic after the US debt ceiling deal passed through the Senate.

This paved the way for the government to suspend its self-imposed limit on borrowing until January 1, 2025, and avoid defaulting on its debt.

And the world’s largest economy surpassed forecasts by adding 339,000 jobs last month – way ahead of the 190,000 economists had expected.

Oil prices rose 2 per cent as Brent crude hit $76 a barrel. Oil producers at Opec and its allies are set to meet on Sunday.

In April, Opec announced plans to slash supply by nearly 1.2m barrels a day.

Michael Hewson, chief market analyst at CMC Markets, said that there was an ‘outside risk that oil ministers could surprise the markets with another production cut, given the recent weakness seen in prices’.

Aviva added 2.6 per cent, or 10.5p, to 409.1p after the insurer completed a £300m share buy-back programme.

The repurchase scheme, which began in March, saw the group buy nearly 73m shares at an average price of 412p a share.

Shareholders at Purplebricks overwhelmingly voted in favour for the embattled online estate agent to be snapped up by one of its rivals for £1.

At a general meeting, 91.15 per cent of participating investors backed the bid from Strike.

Shares in Purplebricks, which are expected to be cancelled from AIM on June 16, tumbled 17.1 per cent, or 0.09p, to 0.42p.

Revolution Beauty hailed the ‘important step’ that it had made towards lifting the suspension on its shares after the cosmetics group posted its delayed results for the six months to the end of August 2022.

It stopped trading in September last year after its auditor BDO identified ‘serious concerns’ over the annual accounts, causing it to miss its deadline for reporting the numbers and triggering the suspension of its shares. The company posted a loss of £13.4m in the six months to August 31, compared with a £28.9m loss the year before.

Pelatro, the marketing software company, won a recurring contract worth around £519,000 every year to provide its platform to a Middle East telecommunications group. Shares rose 19.2 per cent, or 1.25p, to 7.75p.

Oil stocks sank amid fears over the future of North Sea projects.

North Sea producer Harbour Energy shed 3.5 per cent, or 8.2p, to 226.7p, and global giants BP and Shell fell 2.2 per cent, or 10.3p, to 466.6p and 3 per cent, or 70.5p, to 2282p respectively amid reports that a future Labour government would block new North Sea oil projects.

There also remains uncertainty over whether Opec+, the group made up of 13 oil-exporting nations such as Iran, Saudi Arabia and Iraq, and allies including Russia, would increase their output cuts at its meeting on June 4.

There remains uncertainty over whether Opec+ would increase their output cuts next month

Last month it announced plans to slash supply by nearly 1.2million barrels a day. The price of Brent crude sank more than 3 per cent to hover below $75 a barrel.

The London stock market reopened from the bank holiday weekend on a mixed footing, with the FTSE 100 down 1.4 per cent, or 105.13 points, to 7522.07 and the FTSE 250 gained 0.1 per cent, or 13.28 points, to 18807.37.

There was good news for Greencore after the supermarket sandwich maker increased its revenue despite a seasonally quieter first half of the year. Sales rose by a fifth to £925.8m in the six months to the end of March.

But it swung to a loss of £6.2million, having made a £1million profit the year before, amid higher costs and soaring interest rates.

The group also cut costs by axing 25 jobs at the end of March. It also launched a share buyback yesterday worth up to £10million as part of a wider £50million repurchase programme. Shares grew 4.3 per cent, or 3.25p, to 79.05p.

Heading in the other direction was Dr Martens as analysts painted a bleak picture ahead of its results on Thursday. RBC lowered the boot maker’s rating to ‘sector perform’ from ‘outperform’ and cut target price to 180p from 230p. 

The broker flagged concerns over challenges the group faces in the US which makes up 37 per cent of revenues. Shares sank 5.1 per cent, or 8.2p, to 153.1p.

Lloyd’s of London insurer Hiscox has appointed the former boss of Prudential (flat at 1125p) to become its next chairman.

Jonathan Bloomer, who led the former M&G (down 0.03 per cent, or 0.05p, to 198.3p) parent company from 2000 to 2005, is set to join the group on Thursday and replace Robert Childs who will retire on July 1. Shares rose 1 per cent, or 12p, to 1182p.

The boss of Hochschild Mining is to step down after 13 years. Ignacio Bustamante will leave his job at the gold and silver miner on August 26 to move to London and take up a new position at another company.

He will be replaced by Hochschild’s chief operating officer Eduardo Landin, who has held the role for 10 years. Shares rose 1 per cent, or 0.7p, to 72.75p.

Rolls-Royce fell 3.1 per cent, or 4.65p, to 144.4p and BAE Systems dropped 0.8 per cent, or 8p, to 943.4p after the British defence giants were accused by India’s investigative agency of engaging in a ‘criminal conspiracy’ over the supply of fighter jets to the country between 2003 and 2012.

RHI Magnesita stormed to the top of the mid-cap index after the group, which makes heat resistant materials for the steel industry, received an offer for 20 per cent of its shares at 2850p.

The bid, which was tabled by the investment holding group Ignite Luxembourg, represented a 39 per cent premium to the company’s previous closing price.

Shares jumped 23.6 per cent, or 484p, to 2534p.

It was also a positive session for Hunting after the energy services firm increased its profit forecast for 2023 on the back of winning its biggest contract to date worth £73m with India’s Cairn Oil and Gas.

Shares soared 13.4 per cent, or 27p, to 228.5p yesterday.

Sharp sell-off in bank stocks expected as jittery markets prepare for fallout from First Republic collapse

By Mark Shapland For The Daily Mail

Published: 16:50 EDT, 1 May 2023 | Updated: 16:50 EDT, 1 May 2023

All eyes will be on the markets today amid what is expected to be a sharp sell-off in bank stocks around the globe.

In London, traders and bankers spent the weekend assessing exposure to the fallout of First Republic in what was described by some as a ‘marathon.’

Fears are mounting of contagion, which could expose other lenders. While many investors say that this is not a ‘Lehman’s moment’, others believe that other banks could also now be in trouble.

Aftermath: In London, traders and bankers spent the weekend assessing exposure to the fallout of First Republic in what was described by some as a ‘marathon’

Traders are particularly nervous that central banks are continuing to raise rates in a banking crisis. Nevertheless many experts stressed that First Republic’s travails were a delayed reaction to the turmoil in March rather than the opening of a new phase in the crisis.

Analysts anticipate HSBC, Lloyds, Barclays, NatWest and Standard Chartered will all be sold off after having billions wiped off their share prices already this year.

Last week NatWest posted strong profits but investors were disappointed by the deposit figures which showed billions leaving the bank.

Mid-tier lenders such as Metro Bank will also be monitored, as well as challenger banks such as Monzo, Revolut and Starling Bank.

One trader told the Daily Mail: ‘It was a marathon weekend for many in the City. There is real fear going into the first trading session of the week. There will be a lot of nerves.’

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