UK stocks recovered some poise on Friday, despite an overnight fall on Wall Street amid fresh concerns over the pandemic and disappointing results from content streaming firm Netflix, with company earnings coming to the rescue.

In early trading the FTSE 100 index added 0.2% to 6,261 as defensive sectors such as healthcare and tobacco offsett losses in financial and energy stocks.

Sterling was unchanged against the dollar at $1.255 while gold prices continued to hover just below $1,800 per ounce and Brent crude oil futures softened slightly to $43.10.

NEW HIGHS

Home repair and improvement business Homeserve (HSV) was the best performing stock in the FTSE, gaining 4.5% to a new 12-month high of £13.61 after it reported business as usual in its trading update for the period from April to mid-July with ‘no impact’ on policy renewals or cancellations.

In addition, its heating and air conditioning (HVAC) unit has been buying up smaller competitors with four ‘profitable’ deals in May and June, one of them adding 38,000 new customers, and a ‘strong pipeline of attractive targets.’

Shares in precision measurement firm Renishaw (RSW) also hit a new 12-month high up 3.5% to £45.83 despite a forecast of an 11% drop in full year revenues to the end of June and a drop of more than 50% in adjusted pre-tax profits due to restructuring costs and losses on financial instruments.

The firm sees revenues at £510 million against £574 million last year, which represented a 7% fall on the year before that, while adjusted pre-tax profits are seen at £50 million against £103.9 million (a fall of 28% on 2018’s profits). However market forecasts were for an even steeper fall, which spurred buying.

Mining giant Rio Tinto (RIO) reported steady progress in production last quarter with iron ore output up 4% and shipments up 1% while mined copper was marginally lower than last year.

Chinese demand for iron ore is steady with the construction and infrastructure sectors ‘performing well’, and the global automotive sector is showing ‘initial signs of recovery from a very low base’ which is supportive for its aluminium operations. Shares added 0.9% to £48.67, approaching a new year-high.

ALSO RANS

Fuel supply and distribution group DCC (DCC) delivered an upbeat report on trading since the start of April, with demand still down on last year but ahead of management expectations thanks to strong demand from the agricultural sector and from households looking to build supplies during lockdown.

Its healthcare business also performed ‘strongly’ last quarter with operating profit ‘well ahead of the prior year’ as demand for nutritional products and Covid-19 related items. Despite the good news, shares eased 0.6% to £70.19

Freight management firm Xpediator (XPD:AIM) said that trading in the first six months of the year had gathered momentum, and by the end of the period was ‘only marginally behind management’s original expectations.’

The firm said that, while it is still too early to predict how quickly markets return to normal, it is financially stable with a net cash position and cash collection has improved during the first half. Shares, which have halved over the last 12 months, jumped 6.7% to 24p.

 

FOR A FULL LIST OF FTSE WINNERS AND LOSERS SEE HERE

 

 

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Issue Date: 17 Jul 2020