Market report

Inflation drops | Persimmon profits leap | Balfour Beatty


5pm: Markets await Fed report

Britain’s blue-chip FTSE 100 index closed 11,.79 points, or 0.16%, lower at 7,169 as the mood was muted on both sides of the Atlantic ahead of the publication of the Federal Reserve minutes.

House builders Persimmon, Barratt Developments, Taylor Wimpey and Berkeley closed up 1.5%, 2.3%, 2.2% and 1.5% respectively following positive housing industry data. UK house prices rose by 13% over the year to June, faster than at any point since November 2004.

BHP Group ended the session as the worst performer, down 5%, following the miner’s decision to withdraw its London dual listing on Tuesday and move its primary listing to Sydney.

Among mid-caps, Balfour Beatty closed 7% lower despite posting a half-year pretax profit of £35 million, compared to a £26m loss a year before. However, pretax profit remained 44% below the £63m reported in the corresponding period in 2019.

12.30pm: Whisky recovery

Scotch whisky exports in the first half of 2021 rose strongly compared to last year, though they remain below pre-pandemic levels.

Full story here

10.30am: Ocean Terminal plan

A £100 million plan to open up the waterfront at Ocean Terminal will see demolition of a multi-storey car park and the former Debenhams department store.

Full story here

10am: Change at top of Highland Spring

Highland Spring Group, has announced that chief executive Les Montgomery will retire as chief executive and will become a non-executive director of the company from the end of this year.

Full story here

9.45am: Deficit soars

Scotland’s deficit over the past year has ballooned to a record £36.3 billion, representing 22.4% of GDP.

Full story here

9am: Shares edge down

After an initial gain shares in London fell back despite a sharper slowdown in inflation.

Ocado was 1.63% higher, and British Airways owner International Consolidated Airlines was up 0.94%, recovering some of its losses caused by concerns about the spread of the Delta variant.

But after making gains on Tuesday, miner BHP was the biggest faller, down 0.95%.

The FTSE 100 was trading 15 points lower at 7,166.06.

7.10am: Inflation falls

UK inflation fell to 2% in July, a sharper slowdown than expected, as retailers sought to stimulate demand by slashing prices, according to the Office for National Statistics.

The cost of living is down from 2.5% in June. Economists had forecast a July figure of 2.3%.

7am: Persimmon profits leap

Persimmon homes

House builder Persimmon posted a leap in profit before tax to £480.1m for the half year to the end of June from £292.4m last year.

As announced in March, the board intends to revert to the pre-Covid profile of capital return of two payments a year, with the payment of the regular annual distribution of 125p per share being made in early July 2022.

Group chief executive Dean Finch said: “We anticipate successfully delivering c. 10% growth in sales completions this year. The Group has a great platform and good momentum to deliver further disciplined growth into the medium term, creating value for all.”

7am: Balfour Beatty

Construction and civil engineering group Balfour Beatty was back in the black at the interim stage, posting underlying profit from operations at £60 million (2020: £14 million loss).

It has declared an interim dividend of 3p which is 43% higher than pre-pandemic level (2020: Nil; 2019: 2.1p).

Leo Quinn, group chief executive, said: “We continue to reshape Balfour Beatty to play to its strengths. These include leading capability in markets where governments are committed to long-term infrastructure programmes.

“It means choosing to exclude regions and sectors which cannot provide profitable, low risk growth, in favour of those that can.  Our priority is on executing our already strong order book which will drive attractive cash generation and returns.

“Today, we are substantially increasing our interim dividend on the pre-pandemic level and raising margin targets in Support Services.”

7am: Good Energy offer

The board of Good Energy, the 100% renewable electricity supplier, has rejected a hostile offer of 340 pence per share from Ecotricity, reaffirming its previous statements that the offer significantly undervalues Good Energy and its future prospects.

Global markets

The FTSE 100 was expected to open 18 points higher ahead of UK inflation data.

Michael Hewson at CMC Markets said: “The Bank of England already expects that UK CPI could well head towards 4% by the end of the year, even if most MPC members appear to think it will be temporary in nature, and while today’s numbers aren’t expected to see an increase, that doesn’t mean it won’t happen.”

Traders in Asia-Pacific pushed shares higher. The Shanghai Composite in China gained 0.75% and Hong Kong’s Hang Seng index surged 0.84%

In Japan, the Nikkei 225 rose 0.71% while South Korea’s Kospi leapt 0.83%.

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