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Morning Report - 30 July 2021

Yesterday’s UK 100 Leaders	Price (p)	% Chg
RENTOKIL INITIAL PLC	563.0	6.8%
INFORMA PLC	511.8	5.7%
ANGLO AMERICAN PLC	3,293.0	5.4%
ROYAL DUTCH SHELL PLC-B SHS	1,438.0	3.9%
ROYAL DUTCH SHELL PLC-A SHS	1,458.6	3.8%

Yesterday’s UK 100 Laggards	Price (p)	% Chg
BT GROUP PLC	171.9	-6.6%
SMITH & NEPHEW PLC	1464.5	-6.3%
WEIR GROUP PLC/THE	1790.0	-6.0%
ITV PLC	114.2	-3.1%
SMURFIT KAPPA GROUP PLC	4030.0	-2.3%

Major World Indices	Price	% Chg	1 YEAR
UK 100 INDEX	7,078	0.9%	15.4%
DOW JONES INDUS. AVG	35,085	0.4%	32.2%
DAX INDEX	15,640	0.5%	22.0%
NIKKEI 225	27,782	0.7%	24.4%
S&P/ASX 200 INDEX	7,417	0.5%	22.6%

Commodities	Units	Price	% Chg
WTI Crude Oil (Nymex)	USD/bbl.	73.62	1.70%
Brent Crude (ICE)	USD/bbl.	75.94	1.61%
Gold Spot	USD/t oz.	1,828	0.0%
Copper (Comex)	USd/lb.	452	0.9%

The UK 100 is called to open -56 points today at 7026.

1 day; 5 Months

Click graph to enlarge

Markets Overview:

The UK 100 is called to open -56 points today at 7026. Calls for a lower open to end the week come as European markets take lead from another tough session in Asia overnight. Japan’s Nikkei 225 was 450 points lower at 27,333 following disturbing trends in the number of COVID cases while in Hong Kong the Hang Seng was down 600 points at 25,715. U.S. stocks rose to record levels on Thursday as investor sentiment was seemingly not affected by data pointing to slower-than-expected growth. The Dow Jones added 153.60 points, or 0.4%, to close at 35,084.53, while the S&P climbed 0.4% to settle at 4,419.15, both hitting their intraday records during the session. The tech-heavy Nasdaq underperformed with a 0.1% gain to end at 14,778.26 amid a drop in Facebook and PayPal shares.

Company News & Broker Comments:

Company News:

Babcock reported a bigger annual loss after taking charges and impairments of £2bn following a review of its contracts and balance sheet. They state that higher COVID-19 costs and uncertainty over new variants mean it does not expect easing restrictions to boost its profitability.

Glencore raised its expectations for its trading division to the top end of guidance for the year, but posted lower production figures for nickel, lead and coal in H1. They expect FY marketing EBIT to be at the top end of its annual range between $2.2-3.2bn, due to improved market conditions. Copper production +2%, cobalt +3% while lead, coal and nickel output fell.

International Consolidated Airlines have said that summer capacity would rise to 45% from 22% in the previous quarter, although the group said uncertainty remained. They reported an underlying loss of 1.045bn euros, in line with a consensus forecast for 1.036bn euros loss.

Natwest restored dividends and announced a share buyback in their latest results. They posted a H1 pre-tax profit of £2.5bn, well above analyst average forecasts of £1.8bn (2020: £770m loss). They are to pay an interim dividend of 3p per share and a share buyback of £750m. They also freed up £707m of its own credit provisions in response to the improved economic picture.

Pearson reported better than expected rebound in H1 profit and a 17% jump in underlying sales driven by demand for online learning, helping it to lift its dividend. They reported an adjusted operating profit of £127m, ahead of analysts' forecasts of £100-120m. They have increased their interim dividend by 5% and reiterated their outlook.

Rightmove expect the strong market activity to continue for the rest of the year after its HY profit jumped above pre-pandemic levels as the estate agent portal reversed discounts offered during the crisis in 2020. H1 operating profit came in at £114.9m, compared with £61.7m in 2020 and £108.2m in 2019.

Broker Comments:

Barclays Upgrades Croda to Equal weight from Underweight (6 Buys / 8 Holds / 1 Sell)

Credit Suisse Upgrades Next to Neutral from Underperform (5 Buys / 8 Holds / 1 Sell)

Reporting Today:

Aveva Group

Essentra

Glencore

International Consolidated Airlines

Jupiter Fund Management

Natwest Group

Pearson

Rightmove

Reporting Monday:

HSBC

XP Power

In Focus Today:

German GDP QoQ

EU Consumer Price Index YoY

EU GDP QoQ

Chinese Non-Manufacturing PMI

Japanese Unemployment

Japanese Trade

EU Unemployment Rate

Next Week's Ex-Dividends:

FTSE 100:

Lloyds Banking Group

Reckitt Benckiser Group

Unilever

RELX

Rentokil Initial

FTSE 250:

CMC Markets

Man Group

GCP Infrastructure Investments

FDM Group (Holdings)

City of London Investment Trust

Vesuvius

Tyman

Tritax Big Box REIT

Inchcape

Aberforth Smaller Companies Trust

Schroder Oriental Income Fund

Lancashire Holdings

Avon Protection

Games Workshop Group

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