Wednesday, 05 August 2015 19:18
LONDON: Britain’s top share index rose on Wednesday, boosted by better than expected results from London Stock Exchange and Legal & General, and by a rebound in the mining sector.
London Stock Exchange Group gained 2.2 percent after beating expectations as profit after tax rose 21 percent.
“(Earnings) benefited from both better cost control and a lower tax rate than anticipated,” Peter Lenardos, analyst at RBC Capital Markets, said in a note, adding that earnings per share came in 5 percent ahead of RBC’s forecast.
British insurer Legal & General was up 1.7 percent, also topping forecasts with an 18 percent jump in operating profit, helped by a strong performance in the bulk annuity market.
So far this earnings season, 58 percent of FTSE 100 companies have beaten or met expectations, according to Thomson Reuters StarMine data.
Some earnings reports were more mixed, however. Standard Chartered was up 2 percent after a volatile morning, slightly lower than before it released results in mid-morning trade.
The Asia-focused bank fell sharply before rising as much as 6.5 percent as investors digested the update. The bank halved its dividend in a move that traders said was necessary to bolster its capital position.
The FTSE 100 was up 32.95 points, or 0.5 percent, at 6,719.52 by 1050 GMT, nearly 6 percent off all-time highs hit in April.
The index has been hindered in recent weeks by falls in mining stocks. However, FTSE 350 mining shares rose 2.6 percent, recovering from near six-year lows.
With copper also pinned near six-year lows, hit by concerns over demand from China and the prospect of a U.S. rate rise later this year, traders were not optimistic on the outlook for the sector.
“Miners have been hit quite hard, and must’ve reached a level where some see them as attractively valued,” said Mark Priest, sales trader at ETX Capital.
“But we’re not seeing a rebound in metal prices, there is talk the U.S. will raise rates and China is still a concern globally.”
Among fallers, building materials group Travis Perkins dropped 2 percent after a downgrade from Citi to “neutral” from “buy”.
It has dropped nearly 4 percent over the last two sessions after an update that reported results in line with expectations but gave little clarity on the outlook.
Chip designer ARM was also weak, and is down 6.2 percent this week as Apple, which uses ARM’s chip designs in its products, hit a six-month low.
