Autonomy slips on missed forecasts but banks lift FTSE
UPBEAT results from JP Morgan boosted banks while energy and pharmaceutical stocks also gained, leading Britain’s top share index to close at a one-month high, up for a fourth session yesterday.
The index was trading in slightly negative territory in early trade but the JP Morgan results which were announced around mid-session lifted the FTSE 100 which closed 0.35 per cent, or 15.38 points up at 4,361.84.
The index shrugged off weak US factory activity data which hit stocks on Wall Street; the FTSE 100 is up 5.7 per cent on the week and is set for its best weekly performance in four months.
Investors will look to second-quarter results from IBM and Google after US markets close for more clues on the corporate outlook and whether shares can continue their upward trajectory. “It all depends on how good the results from IBM and Google are,” said Nick Serff, analyst from City Index. “The results this week have been good and more positive results should see consolidation of the gains.”
Citigroup, General Electric and Bank of America report today. Banks were the biggest driver of gains, continuing the bull run from the last couple of sessions following the results from JP Morgan. HSBC, Barclays and Lloyds Banking Group added between 0.6 and 1.7 per cent.
Among other financials, Schroders climbed 3.3 per cent, after Citigroup raised the fund firm to “buy” from “sell”. Energy stocks were also among stocks in positive ground, with crude oil stable above $61 per barrel. Heavyweights Royal Dutch Shell and BP added 0.5 and 0.9 per cent respectively.
Oil services company Petrofac was the top riser, gaining 5.3 per cent after it said its Petrofac Emirates unit, in partnership with GS E&C, was awarded a $2.1bn Abu Dhabi integrated gas development contract.
But mining firms took the most points off the index as doubts still hovered over the demand outlook for metals. Anglo American, Kazakhmys and Rio Tinto lost between 0.6 and 2.3 per cent.
UK software firm Autonomy was the biggest faller on the index, down 8.6 per cent, as analysts said although the firm reported second-quarter revenue which was in line with expectations, it missed a number of top-end estimates, and the market expected more from its outlook.
Risk appetite, while slightly improved, was still fragile, leading investors to move into defensive pharmaceutical and tobacco stocks.