London’s FTSE 100 rallied for the second successive day following Monday’s correction, climbing on hopes that central banks might maintain support for the global economy for longer given rising Covid infections as well as a number of positive corporate updates.
By the close, the blue chip benchmark finished 1.7% higher at 6,998.28 points, its recovery from a tough start to the week supported by a solid start to trading on Wall Street, where the S&P 500 was up 0.6% to 4,347.63.
UK shares were buoyed as official figures showed the Government borrowed less than expected with the budget deficit coming in at £69.5 billion in the three months to June, helped by the reopening of the economy.
The Office for Budget Responsibility had forecast the deficit to reach £92.7 billion in March.
NEXT IN VOGUE
Shares in fashion retailer Next (NXT) surged 8.2% higher to £80.02 after the company upgraded annual profit guidance and said it would pay special dividends, having enjoyed a stronger-than-expected sales performance so far in the second quarter.
Pre-tax profit for the year to January 2022 is now expected at £750 million at the central guidance level, up from previous guidance given in May of £720 million.
Full-price sales in the 11 weeks to 17 July were up 19% versus two years ago, beating previous mid-range guidance assuming an increase of 3%.
Next said it had raised its full-price sales guidance for the rest of the year to 6% growth, from 3%.
Parcels and letters company Royal Mail (RMG) said it saw strong growth for the quarter through June with group revenues up 12.5% year-on-year, while prospects for full year performance remained unchanged.
Parcel volumes decreased and letters increased compared with the exceptional period last year which encompassed the first lockdown.
The company reiterated full year guidance for GLS, expecting low single digit revenue growth and around 8% operating margins. The shares dropped 2.7% to 516.2p.
Mining company Rio Tinto (RIO) said it had agreed with community members in Bougainville, Papua New Guinea to assess the environmental and human rights impacts of the Panguna mine, which ceased operating in 1989.
A joint committee of stakeholders would be chaired by an independent facilitator, with representatives invited to join from Papua New Guinea, Bougainville Copper and other landowners and community representatives. The shares rose 2.6% to £59.89.
Copper production in the first six months of the year was 361,500 tonnes, in line with expectations and 2.8% lower than in the same period last year mainly because of lower grades, it added.
Gold production for the quarter increased by 3.9% to 61,400 ounces compared with Q1, and for the first six months increased by 8.5% to 120,500 ounces. The shares added 4.1% to £14.20.
STUNNING DEBUT FOR BRIDGEPOINT
One of the day’s other notable risers was private equity firm Bridgepoint (BPT), bid up the best part of 30% to 451p on its stock market debut, having raised £300 million of new money at 350p to help fund its growth plans and reduce debt.
The company said that JLA’s scale and service offering was complementary to its existing assurance-led proposition bringing enhanced service capabilities to leading fast moving consumer goods companies. The shares gained 1.4% to £54.50.
On a like-for-like basis sales growth had accelerated from 20% in the first quarter to 48% in the second. The shares added 2% to 252p.
Estate and lettings agent Foxtons (FOXT) firmed 7.2% to 50.1p after confirming it is reviewing strategic options for its mortgage broking arm Alexander Hall, which could include the potential sale of the business.
Shares in technology company Computacenter (CCC) skipped 5.5% higher to £25.94 after saying it expected ‘substantial growth’ for 2021 after forecasting first-half adjusted pre-tax profit to be about 50% ahead of the same period last year.
The company said it had seen strong organic growth in Technology Sourcing and Services across the UK, Germany and the US.