Spreadex Market Update
Strong earnings can’t help FTSE as cable hits Fed-aided 10 month high
"Like the pound, the euro has greatly benefited from the dollar’s sour summer, hitting a fresh 2 and a half year high in the aftermath of the Fed announcement"
The news helped cable briefly surge above $1.315 for the first time since September last year, before settling slightly below that landmark level. This led to a muted start from the FTSE, though the weight of the pound’s gains is being somewhat negated by a largely positive morning for the index’s reporting companies.
Guinness-owner Diageo rose 5% as it revealed a £1.5 billion share buyback programme; Anglo American jumped 3.3% after restarting its dividend 6 months ahead of schedule; and Rentokil Initial was up just shy of 4% thanks to an absurd 637% increase in pre-tax profit. There were also positive statements from Shell, RELX, Schroders, Smith & Nephew and a currency tailwinds-boosted British American Tobacco.
It wasn’t all good news, however. Even though it posted its best half year profit in 8 years, Lloyds fell around 1.5% after revealing it had to set aside another £700 billion to cover the latest round of PPI claims. AstraZeneca, meanwhile, dove off a cliff, plunging a stomach-churning 16% following the failure of a key lung cancer trial.
Like the pound, the euro has greatly benefited from the dollar’s sour summer, hitting a fresh 2 and a half year high in the aftermath of the Fed announcement, only to dip back under $1.175. The currency’s muscular showing continues to be a problem for the DAX, which slipped 0.2%, but less so for the CAC, the French index rising 0.5%.
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