UK banks gave leading stocks a push higher in early trade on Tuesday afternoon the Bank of England lifted dividend restrictions on the sector’s heavyweights but worries over rising coronavirus infections kept gains in check.
At 9am, the benchmark FTSE 100 was around 0.3% at 7,174.34, with NatWest (NATW) topping the leaderboard with gains just shy of 2% to 210.4p. HSBC (HSBA), Lloyds (LLOY) and Barclays (BARC) were also all in positive territory chalking-up gains of between 1.2% and 1.5%.
Mining stock were also firm early on with silver and gold miner Fresnillo (FRES) leading the pack wit a 1.5% rise at 802.55p, while UK commercial property firm British Land (BLND) jumped 1% after it said it had seen a notable improvement in activity across its businesses after the lifting of lockdowns.
Food delivery platform Just Eat Takeaway (JET) led the index loser board sliding 0.7% to £64.32.
Overnight, US markets continued to trade at record highs with the three major averages closing up as investors looked ahead to the quarterly earnings from major banks as a possible catalyst for further direction.
The S&P 500 climbed 0.4% to close at a record of 4,384.63, while the Dow Jones Industrial Average was up 0.4%, or 126 points to a record close, just shy of the 35,000 level. The tech-heavy Nasdaq Composite gained 0.2% to new closing record of 14,733.24.
A slew of major Wall Street banks are set to kick off the quarterly earnings season in earnest this week, with JPMorgan Chase and Goldman Sachs kicking off earnings events later on Tuesday.
TODAY’S COMPANY HIGHLIGHTS
Newspaper wholesaler Smiths News (SNWS) rallied 7.5% to 45.7p as it upgraded its annual profit expectations, citing a stabilisation in sales of newspapers and magazines.
Smiths News said trading for the year through 28 August would be 'ahead of market expectations' amid a 'strong' operational performance in the 43 weeks to 26 June.
Upmarket chocolate retailer Hotel Chocolat (HOTC:AIM) climbed 1.6% to 380.1p, having upgraded annual guidance after sales grew 34% in the 10 weeks through 27 June, compared with the same pre-pandemic period.
Hotel Chocolat now anticipated underlying pre-tax profit higher than its previous expectations, with revenue expected to be up 24% higher than the same pre-pandemic period in 2019, and 21% higher than in 2020.
Kitchens and joinery products maker Howden Joinery (HWDN) climbed 2.1% to 870p, announcing that its first-half performance exceeded its expectations, with full-year revenue expected to grow.
Annual revenue for 2021 was seen rising to almost £785 million, up from £465.0 million last year and £652.6 million in 2019, and pre-tax profit at around £300 million.
Insurance company Phoenix (PHNX) gained 0.4% to 695.8p after it agreed to sell Ark Life Assurance Company to Irish Life for €230 million (£197 million).
Phoenix said the deal would simplify its European operations and provide cash to invest into higher-return growth opportunities.
SMALLER COMPANY WRAP
Disease test kit supplier Omega Diagnostics (ODX:AIM) dropped 7.0% to 44.2p on posting a full-year loss, citing a fall in demand for allergy testing that it pinned on the pandemic.
Omega said it expected to see demand in the health and nutrition business continue to improve this year, though Covid-19 testing revenue was very much dependent on UK government decisions.
Computer and power component supplier Solid State (SOLI:AIM) slid 1.0% to 981p, even as it hiked its dividend 28% after it booked a 5% rise in annual profit, owing to stronger margins that offset weaker sales.
Solid State upped its dividend to 16p per share, up from 12.5p year-on-year.
Industrial chain and power product manufacturer Renold (RNO:AIM) gained 2.2% to 23p on news that it had won contract for the supply of flexible couplings for the second batch of the Royal Navy's Type 26 future frigate.
The contract was worth £11 million over the next eight years.
Pharmaceutical company Clinigen (CLIN:AIM) shed 0.1% to 619p after reporting a fall in core earnings as the pandemic impact weighed on demand.
On the positive side, Clinigen said it anticipated a return to double-digit growth in the current financial year.
Oil company Serica Energy (SQZ:AIM) firmed 4.4% to 155.77p on announcing that it achieved successful flow test results from the Columbus development well in the North Sea.
A stabilised flow rate of 38 million standard cubic feet per day of gas and 1,560 barrels per day of condensate was achieved through a 56/64-inch choke.
Pub and restaurant ordering device group Vianet (VNET:AIM) rose 5.3% to 109.5p on announcing that its profit in the first three months of its financial year was 'higher than anticipated'.
Both of Vianet's company's divisions were expected to return to more normal trading during the second half of 2022, Chairman James Dickson said in AGM speech notes.