The FTSE 100 surged in early trading on Wednesday as expectations grew that the White House and Democrats in the US would strike a new stimulus deal.
It comes as the price of gold topped $2,000 per ounce for the first time ever. The precious metal is currently trading around $2,035 per ounce.
The further US stimulus measures come after a rapid rise in coronavirus cases in the country, which has led states to delay reopening, pressuring investors to prepare themselves for a potential pick-up in inflation.
The UK’s benchmark index had surged 1.2% higher to 6,076.76 by 9am.
HASTINGS SOARS ON TAKEOVER BID
In company news, motor insurer Hastings Group (HSTG) jumped 18% to 253p after it agreed to a bid from Sampo of 250p per share. The share-price rally above the bid price includes the interim dividend of 4.5p per share.
Hastings also reported a higher first-half profit as a rise in premiums and an improved loss ratio offset the impact of claims inflation owing to the pandemic.
For the six months to 30 June, pre-tax profit rose to £63.5 million from £46.1 million on-year as gross written premiums rose 3% to £514.9 million.
LEGAL & GENERAL KEEPS DIVIDEND INTACT
Fellow insurance company Legal & General (LGEN) was the biggest faller in the FTSE 100 with its shares down 1.8% to 216p, after it reported a plunge in first-half profit as increased claims related to Covid-19 and lower interest rates weighed on performance. However the company held its dividend steady.
For the six months ended 30 June, pre-tax profit fell 73% to £285 million on-year, with the company estimating coronavirus related events reduced operating profit by £129 million.
However the interim dividend was left unchanged at 4.93p per share.
WILLIAM HILL SCRAPS DIVIDEND
Gambling company William Hill (WMH) gained 4.7% to 122p despite scrapping its interim dividend after it posted an underlying loss for the first-half, as sales plunged amid the cancellation of sporting events due to the pandemic.
Reported pre-tax profit for the six months through June actually rose to £141.1 million, compared to losses of £63.5 million the previous year, but this was thanks to a one-off value-added tax refund of £201.6 million.
Revenue slumped 32% to £554.4 million and adjusted pre-tax losses amounted to £14.2 million, compared with a profit of £50.8 a year ago.
William Hill's bottom line was also dented by a £81.9 million non-cash intangible impairment of its UK retail estate, which it said reflected the revised outlook for the high street.
COCA-COLA HBC SEES RECOVERY
Coca-Cola bottler Coca-Cola Hellenic Bottling Company (CCH) increased 4% to £21.15 despite reporting a drop in first-half profit due to coronavirus-led closures of restaurants, cinemas and other public places.
Operating profit fell 35.8% to €208.8 million for the six months to 26 June, as it said out-of-home volumes - which include sales at hotels, restaurants and cafes and make up 40% of revenues - fell by 70%-90% during the initial weeks of lockdown.
The company said this eased to declines of 25%-50% in May and June and 10%-40% in July, and it saw ‘encouraging signs’ as markets reopen.
OTHER COMPANY NEWS
Challenger bank Metro Bank (MTRO) tumbled 13% to 99.43p as it posted hefty first-half losses after booking expected credit losses of £112 million due to the coronavirus pandemic’s impact on borrowers’ ability to pay back loans.
Music rights investor Hipgnosis Songs Fund (SONG) fell 0.8% to 118p on announcing that it had acquired Blondie co-founders Debbie Harry and Chris Stein’s writers' share and neighbouring rights royalties in their catalogues, comprising 197 songs.
Recruitment company Page (PAGE) gained 3.5% to 382p even as it swung to a small first-half loss and scrapped its interim dividend after the economic fallout from the coronavirus crisis crunched the jobs market.
Page’s headcount had dropped by 713, or 9.3%, to 6,985 at the end of June after it chose to ‘lose recent joiners or those on performance reviews.’
The company did however reinstate its annual guidance for a pre-tax profit of between £50 million and £60 million, citing better visibility as lockdowns eased.