The FTSE followed through on Tuesday's earnings-driven gains thanks to strong results from insurer Legal and General (LGEN) and record half year completions from housebuilder Taylor Wimpey (TW.), which lifted the whole sector.

Asian markets bounced thanks largely to a recovery in technology stocks, including social media and gaming giant Tencent, which had been hit by intense regulatory scrutiny which now seems to be more accommodative towards the sector.

Hong Kong’s Hang Seng index jumped 0.9% to close at 26426.55.

At midday the benchmark FTSE 100 was up 27 points or 0.4% to 7,133, while the more domestically focused FTSE 250 rose 55 points or 0.2% to 23,345.

This followed a strong showing across major US indices overnight, led by 0.8% gains for both the Dow Jones and the S&P 500. The tech heavy Nasdaq Composite rallied 0.55% while small caps  edged higher, represented by the Russell 2000’s 0.25% rise.

Elsewhere, oil prices were steady with Brent crude largely unchanged at $72.41 a barrel, while the pound inched ahead versus the dollar at $1.393.

Gold traded up 0.13% at $1,813 an ounce, while cryptocurrency bitcoin fell 0.2% to $38,185.

CORPORATE NEWS MOVERS

Housebuilder Taylor Wimpey led the FTSE 100 leaderboard on Wednesday after the company upgraded guidance following a robust first half performance.

The shares rallied 3.7% to 171p after the company posted revenue of £2.2 billion for the six months to 4 July, an enormous jump on last year's pandemic hit £754.6 million. Pre-tax profits soared from a £39.8 million loss to £287.5 million profit and the company also reinstated its interim dividend, pitched at 4.14p per share.

Looking forward the group is targeting profit margins of 22% and expect to deliver 2021 full year group operating profit of £820 million, which is ahead of the top end of consensus estimates.

Also strong was insurer Legal and General (LGEN), which beat half year expectations. Pre-tax profit for the six months to 30 June increased to £1.4 billion from £342 million, while operating profit came in 8% ahead of market forecasts.

A dividend of 5.18p per share was declared, up 5% year-on-year. The shares rose 2.6% to 271p.

These consensus beating numbers were driven by a particularly robust performance in the group’s retirement and investment management businesses. The latter grew profits 4% to £204 million helped by strong external net flows of £27.4 billion. That leaves L&G with £1.3 trillion of assets under management.

Major FTSE fallers included food delivery platform Just Eat Takeaway.com (JET) and mining group Fresnillo (FRES), which  shared the lead at the top of the FTSE loser board with 2.5% declines.

PAYOUT JUMP FOR MORGAN SINDALL

Construction group Morgan Sindall (MGNS) recorded a significant rise in first half profits and announced a step change in its dividend to reflect this.

Pre-tax profits for the six months to June increased from £13.6 million to £52.4 million thanks to economic reopening, with revenues showing a 14% increase. This saw the company announce a 30p per share interim dividend,  up 43% year-on-year.

‘We continue to view Morgan Sindall as one of the highest-quality companies in the sector benefiting from growth in infrastructure and affordable housing,’ said Numis analyst Jonathan Coubrough. Shares dipped 2.7% to £23.75.

Aero-engineer Rolls-Royce (RR.) rose 1.5% to 104.72p after confirming the sale of its Bergen Engines business in a €63 million deal. The company hopes to generate at least £2 billion through asset disposals.

Budget airline Ryanair (RYA) nudged 0.5% higher to €16.73 as it reported that it carried 9.3 million passengers in July, 80% of its capacity, versus 4.4 million in the pandemic hit July 2020 period. Ryanair is hoping for a further lightening of travel restrictions by the UK government later this week in a bid to rescue its key August summer season.

Online health and beauty retailer THG (THG) unveiled plans to buy Cult Beauty in a £275 million deal. The company, which is in the process of spinning out its Ingenuity online sales platform, also upped sales growth guidance from between 30% and 35% to a range of 38% and 41% this year.

Ukraine-based iron ore miner Ferrexpo (FXPO) plunged nearly 4% to 476.2p despite unveiling a 74% jump in revenues and declaring an interim dividend of $0.396 per share.

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Issue Date: 04 Aug 2021