LONDON (SHARECAST) - UK investors were in the mood to accentuate the positive on Wednesday, focusing on some solid trading updates and shrugging off disappointing manufacturing data.
techMARK 2,094.84 +1.24%
FTSE 100 5,712.82 +1.38%
FTSE 250 11,186.19 +0.44%
UK manufacturing production fell at its fastest pace in over two years in July, recording substantial declines in output and new orders.
The market also wasted little time worrying about a downbeat house price report from the Nationwide building society. The price of a typical UK house fell by 0.7% in July to a level 2.6% lower than one year ago.
The lender´s chief economist, Robert Gardner, points out that “with the Eurozone situation deteriorating again in recent weeks and few signs of a recovery in domestic demand, we continue to expect only a modest recovery in the quarters ahead, both for the UK economy and the housing market.”
In particular, Gardner is worried by the risk that the resiliency of the UK´s labour market could give way should the economy continue to contract.
The housing data did not prevent Rightmove advancing strongly after a sparkling trading update from the property web site operator.
Lastly, mention must made of remarks from German economy minister Philip Rosler to the effect that the entire government is united in opposing granting the European Stability Mechanism a banking licence. That seems to fly in the face of other reports out in the last few days but is, nevertheless, impossible to ignore.
Setting the standard
The assertion from Peter Sands, the Chief Executive Officer of banking giant Standard Chartered, that there is "some virtue in being boring" received several nods of approval from an investment community tired of bankers "living in interesting times" (as the old Chinese proverb has it).
The emerging markets focused bank saw profit before tax for the six months to the end of June was up 9% to $3,636m from $3,139m the year before, in line with operating income, which improved to $9,511m from $8.764m in the first half of 2011.
Fashion firm Next continues to march to a different drum in the retail sector, with its online and catalogue sales coming to the rescue in a period when umbrellas were the must-have accessory to any outfit.
Total sales for the first half of 2012 were up 4.5% against last year, the firm said, topping its prediction of growth between 1% and 4%.
Like-for-like sales came in at 2%, beating some analysts' expectations of a rise of just 1%.
Sales at its online and catalogue Next Directory arm were up 13.3% on last year making up for high street retail sales which crept up just 0.2%.
Pharmaceuticals firm Shire published its second quarter figures at noon to enable US early birds to scan the report at the same time as European investors, and the numbers were well worth a look.
Non-GAAP (generally accepted accounting principles) operating income rose 23% to $420m, while US GAAP operating income increased by 7.0% to $302m compared to the same period in 2011.
"For the full year we now expect product sales growth to be in the low teens. This reflects the fact that foreign exchange movements are impacting the reported growth of some of our products, but also our expectation that ADDERALL XR will remain competitive in the US market following the approval of a generic competitor," said Angus Russell, Chief Executive Officer of Shire.
Platinum miner Aquarius reported that an armed attack had forced the closure of the Kwezi shaft at its Kroondal mine.
The report said that three people died and at least 20 were injured in clashes between security staff and a group of at least 200 people who trespassed on to company property. The interlopers are believed to be workers who had been dismissed by the contracting company at the mine after an illegal strike earlier this year.
On a more civilised note, West African gold miner Avocet was wanted as the market applauded its decision to suspend its dividend payment after a profits slump in the second quarter.
Cape, the support services firm focused on the energy sector, got a rough ride after a profit warning. The group is unlikely to meet previous expectations for 2012, with problems likely to continue into 2013, despite a restructure of the Australian part of its business.
Gilts in the shade
The benchmark 10-year gilt lost ground as investors focus on equities. The yield has moved up from its openign level of 1.47% to 1.52%.
The most widely traded contract for Brent Crude reversed its earlier fall and ended the afternoon trading session up $1.28 at $106.20 a barrel.
FTSE 100 - Risers
Next (NXT) 3,427.00p +6.46%
Shire Plc (SHP) 1,937.00p +4.82%
Admiral Group (ADM) 1,136.00p +4.03%
Aggreko (AGK) 2,120.00p +3.82%
Standard Chartered (STAN) 1,517.50p +3.62%
Vodafone Group (VOD) 188.70p +3.34%
SABMiller (SAB) 2,837.50p +2.92%
Pearson (PSON) 1,230.00p +2.84%
Aviva (AV.) 299.30p +2.64%
Reed Elsevier (REL) 552.00p +2.60%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 5,680.00p -2.07%
Whitbread (WTB) 2,103.00p -1.54%
Eurasian Natural Resources Corp. (ENRC) 388.80p -1.07%
United Utilities Group (UU.) 677.00p -0.88%
Johnson Matthey (JMAT) 2,162.00p -0.83%
Severn Trent (SVT) 1,712.00p -0.75%
Fresnillo (FRES) 1,446.00p -0.69%
Pennon Group (PNN) 763.50p -0.59%
Vedanta Resources (VED) 970.50p -0.56%
Tullow Oil (TLW) 1,285.00p -0.39%
FTSE 250 - Risers
Avocet Mining (AVM) 84.60p +12.80%
Rightmove (RMV) 1,645.00p +10.25%
Filtrona PLC (FLTR) 500.00p +7.53%
Taylor Wimpey (TW.) 46.35p +4.98%
Barratt Developments (BDEV) 138.00p +4.39%
Laird (LRD) 225.20p +3.78%
Berkeley Group Holdings (The) (BKG) 1,410.00p +3.07%
FirstGroup (FGP) 230.20p +3.04%
Lonmin (LMI) 719.00p +3.01%
Fidessa Group (FDSA) 1,444.00p +3.00%
FTSE 250 - Fallers
Cape (CIU) 187.00p -35.49%
Atkins (WS) (ATK) 672.00p -9.19%
Bwin.party Digital Entertainment (BPTY) 95.90p -6.71%
BTG (BTG) 355.00p -5.03%
SEGRO (SGRO) 226.80p -4.18%
Aquarius Platinum Ltd. (AQP) 37.30p -3.57%
Daejan Holdings (DJAN) 2,900.00p -3.37%
Gem Diamonds Ltd. (DI) (GEMD) 190.80p -3.20%
Ultra Electronics Holdings (ULE) 1,424.00p -3.06%
Talvivaara Mining Company (TALV) 145.70p -2.80%