Being in the teeth of summer holidays season was has always led to low volume and limited corporate news and the UK’s major stocks seem to be set adrift in early trading on Wednesday with no real concerted direction. That investors may be keeping their powder dry ahead of the latest Federal Reserve pronouncements at this week's Jackson Hole get-together only added to the subdued mood.
At 9.30am, the benchmark FTSE 100 managed to edge higher, nudging up 0.14% to 7,135.96, with British Airways-owner International Consolidated Airlines (IAG) among the top risers on optimism on the reopening of travel, especially with the US approval of the Pfizer vaccine.
The airline, up nearly 1.5% to 167p, may also benefit from Ryanair (RYA) pulling out of routes from Belfast.
London’s start echoes the mildly positive opening in Europe, reacting to a decent handover from Asia, while Wall Street again registered fresh all-time highs overnight. The S&P 500 hit a record, advancing 0.15% for a fourth-straight day of gains, led oil, and big banks as 10-year yields hit 1.3%.
The Nasdaq Composite also broke intraday and closing highs, rallying 0.5% to end at 15,019.80.
Meme stocks were the talk of Wall Street, where AMC surged 20% and GameStop rallied 27% on heavy volume as the frenzy made a comeback on Tuesday.
MAJOR STOCKS ON THE MOVE
Real estate and consumer cyclicals led the FTSE 100 higher with the biggest contributors to the early gains from AstraZeneca (AZN) and Diageo (DGE), while Weir (WEIR) topped the leaderboard with a 2.5% gain at £16.865.
‘In play’ supermarket chain Sainsbury’s was among the worst as the glow from takeover rumours faded for a second day.
Morrison’s (MRW) shares held at 290.91p despite the company’s pension trustees warning that both the CD&R and Fortress offers would weaken the schemes. ‘The intervention suggests there is an increased risk of intervention by regulators whatever bid is successful,’ said Markets.com’s Neil Wilson.
Just Eat Takeaway (JET) defied the prospective gloom of being kicked out of the FTSE 100, up 0.5% at £69.69. FTSE Russell has reclassified the company as Dutch not British, making it ineligible for inclusion in UK indices.
Shares in UK rival Deliveroo (ROO) bounced off an initial 11% tumble but remain 2.5% off at 380p.
ELSEWHERE ON THE MARKET
Building materials distributor Grafton (GFTU) rose 2.3% to £13.39 after it reported a jump in first-half profit amid a recovery in housebuilding that underpinned a 46% surge in revenue.
Grafton reinstated its interim dividend at 8.5p per share.
Waste recycling firm Augean (AUG:AIM) jumped 17% to 333p after agreeing to be taken over in a 325p per share cash deal. Investment managers Ancala and Fiera Infrastructure of Canada have teamed up as Eleia to make the offer that values the UK company at £341.2 million.
This trumps the previous agreed bid of 280p a share from Morgan Stanley Infrastructure. Augean is now recommending the Eleia deal.
Leeds-based goods transporter Clipper Logistics (CLG) advanced 1.0% to 820p, having hiked its final dividend after profit jumped by a third in the first half, driven by 'high' demand for e-fulfilment services.
Clipper Logistics recommended a final dividend of 7.1p per share, bringing the total annual payout to 11.1p, up 14% year-on-year.
Marketing company Next Fifteen Communications (NFC:AIM) rallied 4.1% to 978.55p after it reported 31% growth in first-half revenue, beating its expectations, and upgraded its annual guidance.
Next Fifteen said organic growth was expected to moderate in the second half, given a relatively strong comparator, but was still anticipated to be higher than previously envisioned.
Bingo and casinos outfit Rank (RNK) climbed 1.5% to 175.2p on noting that UK tax authorities had decided to not to appeal a tribunal decision regarding value-added tax on slot machine income.
Rank said the tribunal had agreed a 60-day extension to allow Her Majesty's Revenue and Customers to agree the exact quantum of the claim with Rank, still expected to be around £80 million.