The FTSE 100 soared in early trading on Wednesday despite the overnight sell-off in the US, as more upbeat company updates boosted investor sentiment.
The UK’s benchmark index defied expectations as it was actually seen opening lower following yesterday’s big tech sell-off in the US, which dragged all three major stock markets – the S&P 500, Dow Jones and Nasdaq – more than 2% lower, with Apple the biggest loser as it fell 6.7%.
However the FTSE instead jumped 1.16% to 5,999, with sentiment buoyed by some more positive earnings updates and dividend revivals, while it was also helped by a fall in the pound as investors grow concerned a no-deal Brexit is becoming more and more likely.
BIFFA MAINTAINS OUTLOOK
In company news, waste management business Biffa (BIFF) gained 0.5% to 214p as it maintained its full-year outlook, with performance ‘slightly ahead’ of expectations amid an ongoing recovery in sales.
During August, revenue recovered to 90% of levels seen in its last financial year, while underlying profit contribution was also continuing to ‘steadily improve month on month’, with Biffa adding that it expects to bring back its staff on furlough by the end of September.
Ongoing pressure on plastic prices, however, would impact trading at its Seaham plant until it starts to produce food grade recycled materials in April 2021, the company said.
COMPUTACENTER RESUMES DIVIDENDS
Computer services company Computacenter (CCC) rose 3.2% to £22.50 as it resumed dividend payments after reporting that first-half profit jumped on Covid-19 related cost cuts and an uptick in revenue.
For the six months to 30 June, pre-tax profit rose 42.5% to £72.4 million as revenue increased 1.5% to £2.46 billion.
The company attributed the rise in profit to Covid-19 related cost reductions and improving services and technology sourcing margins. It also announced an interim dividend of 12.3p per share, up from 10.1p a share last year.
ASTRAZENECA PAUSES COVID VACCINE TRIAL
Pharmaceutical giant AstraZeneca (AZN) dipped 0.37% to £83.17 after it was revealed that its final clinical trials for a coronavirus vaccine, developed in partnership with Oxford University, have been put on hold after a participant suffered a suspected adverse reaction.
AstraZeneca described the pause as a ‘routine action’ in the case of ‘an unexplained illness’, and said it would expedite the review to minimise any potential impact on the trial timeline.
OTHER COMPANY NEWS
Logistics provider Wincanton (WIN) jumped 9.2% to 196.5p after it raised its earnings guidance as the boom in online shopping increased demand for its services.
The company said full-year profits are likely to be ‘materially ahead’ of expectations thanks to booming demand for online retail during the pandemic, adding that revenue in its Digital and eFulfilment arms was ‘significantly ahead’ of pre-pandemic levels, with elevated numbers of two-person home deliveries throughout the summer months.
Military equipment supplier Avon Rubber (AVON) firmed 5.5% to £39.20 on news that it had agreed to acquire helmet group Team Wendy for $130 million, while reaffirming earnings guidance.
Advertising company S4 Capital (SFOR), founded by former WPP boss Sir Martin Sorrell, gained 1.67% to 366p after it swung to a modest first-half profit after acquisitions helped it build its client base and boost revenue.
Pre-tax profit for the six months through June amounted to $0.12 million, compared to a loss of $8.5 million in the same period a year ago, as revenue jumped 60% to £141.3 million and rose by 6.9% on a like-for-like basis.
Oil company Tullow Oil (TLW) was having a tougher day, tumbling 15% to 16.6p, as it swung to a deep first-half loss after output and crude prices both fell and it wrote down the value of its assets.
Tullow's pre-tax losses for the six months through June amounted to $1.44 billion, compared to a profit of $268.4 million a year ago, as net debt climbed to $3.02 billion.