The FTSE 100 hit a fresh intraday record high on Wednesday as investors focused on earnings from heavyweight constituents, which overshadowed the latest flare-up in the Middle East.
London’s earnings season is in full swing and much of the gains on an index level over the past few days can be attributed to stronger-than-expected results from some of the FTSE 100’s heavyweights.
– Advertisement –
On Wednesday, we had positive surprises from Reckitt and Standard Chartered that helped propel the index towards the 11,000 mark and a fresh intraday record high of 10,951.
Such was the strength of the results from FTSE 100 companies on Wednesday, even the latest bout of concern from the Middle East wasn’t enough to derail its ascent. That said, gains have started to fade as the session progressed.
‘Tensions have flared again in the Iran conflict, just as hopes had been mounting that fresh negotiations would lead to a resolution,” explained Susannah Streeter, Chief Investment Strategist, Wealth Club.
“But instead of steps forward there’s been a series of setbacks raising fresh concerns about the flow of energy supplies from the Middle East. Brent crude, a gauge of worry, has crept up again as traders digest the latest twists in the fractious saga. However, the FTSE 100 has largely shrugged off events, with energy giants gaining ground on higher oil prices offering support.”
In London, investors were poring over results from Rio Tinto, Weir Group, Standard Chartered, Reckitt Benckiser, and Sage, all of which were higher on the session.
Weir Group was the best performer at the time of writing, jumping 6%, as the group reiterated guidance as revenue and the order book increased.
Standard Chartered produced an eye-catching set of results that beat expectations, meaning it’s performed much better than peer Barclays did after releasing results yesterday. Standard Chartered shares were 3% higher at the time of writing and trading very near all-time record highs.
“Standard Chartered delivered a stronger-than-expected second quarter, with the result underpinned by broad-based revenue growth, disciplined cost control and lower-than-feared credit losses,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“The earnings beat was driven by more than just higher interest income, with strong momentum across fee-generating businesses powering the result. Wealth Solutions continued to stand out, while Global Banking and Markets also contributed to a quarter that showed the benefits of Standard Chartered’s increasingly diversified business mix. Just as importantly, management felt confident enough to upgrade its income outlook for the year and announce a fresh $1bn share buyback, signalling confidence that the momentum seen in the first half can continue.”
Reckitt Benckiser did its best to match Unilever’s positive surprise with results that also showed positive volume growth. The company had a tough Q1, so today’s numbers will help steady the ship, and shares rose 4.2%.
“Organic sales growth of 4.2% from the company’s core operations comfortably beat consensus forecasts and represented a big step up from the 1.3% year-on-year increase generated between January and March,” explained AJ Bell investment director Russ Mould.
“A price increase of 2.2% year-on-year was in keeping with the first quarter, so the upside surprise came from volume growth, which accelerated to 2.0% after the woeful 1.0% year-on-year drop in the first three months.”