The FTSE 100 was holding its position above 4900 this morning, after closing yesterday’s trading above that mark (4916.8) for the first time since early October 2008.
London’s leading index fluctuated in early trading, but by 11.00am (London time) had resolved to stay above the 4900 barrier just recently breached, and was only marginally down (0.1%) on Tuesday’s close. Early trading was characterised by swinging gains and losses, as several reporting companies released dramatic half-year profits (Serco) and losses (Tullow Oil, WPP), prompting action either way by traders.
Energy companies were on the defensive this morning, with Antofagasta, Tullow Oil and Cairn Energy leading the retreat. By 11.00am (London time) Antofagasta was down 3.67% to 760.50, Tullow Oil had dropped 3.01% to 1,062.00 and Cairn Energy was also reeling at 2,510.00 ( a drop of 2.94%).
Advertising giant WPP incurred the heaviest losses of the morning, though – down 3.75% to 500.50 – after reporting a 47% drop in pre-tax profits for the first half of 2009. The company forecast that the latter half of 2009 would see an upturn in profitability, with its management citing a marked improvement in the overall economic climate as grounds for optimism. Many of the advertising company’s redundancies came in Western Europe, where severance payments are generally greater, denting profits further.
Banks were fighting the good fight, though, with both RBS and Lloyds among the morning’s biggest winners. RBS was up 3.44% to 55.60 and Lloyds 2.94% to 111.00. The morning’s strongest gainer, however, on the back of better-than-expected first-half sales figures, was services company Serco, jumping 5.45% up to 479.80 (11.00am London time). Diageo also enjoyed the morning session, rising 2.78% to 998.50.
New home sales figures for July will be released in the US this afternoon. New home purchases for July rose by 1.6% and Bloomberg’s median estimate is that sales figures will have increased as well. This follows on better-than-expected S&P/Case-Shiller home price index figures released yesterday. Economists have attributed this expected increase to policy efforts such as tax credits for first-time buyers and maintaining near-zero interest rates.
Staying stateside, the weekly crude oil inventories are scheduled to be released, along with only a couple of quarterly releases from Novell and Tiffany & Co later in the week.
