MARKET REPORT: Late flurry boosts FTSE as first half disappoints

The London stock market ended a disappointing first half year on a high.

As a welcome boost for investors after months of turbulence, the FTSE 100 index rose 0.8 percent or 59.84 points to 7531.53, while the FTSE 250 also rose 0.8 percent or 146.03 points to 18,416 .76.

But the blue-chip Footsie is up just 1.1 percent since the start of the year, making it somewhat of a laggard on the international stage.

By contrast, the Nikkei is up 27 percent in Tokyo, while the Dax is up 16 percent in Frankfurt and the Cac is up about 14 percent in Paris.

On Wall Street, the S&P 500 is up about 15.8 percent, while the Nasdaq is up more than 30 percent as US technology stocks bounced back from last year’s pullback.

Analysts said a lack of heavyweight tech companies, the drop in oil prices and stubbornly high inflation held London back.

“At the end of the first half of 2023, investors are taking stock of the markets and what may happen next,” said Russ Mold, director of investment at AJ Bell. Essentially, last year’s losers have become this year’s winners, with the US recovering quickly. The S&P 500 is on track to post a 15 percent improvement in the first half thanks to a handful of technology stocks that accounted for most of the gains.

The UK, on ​​the other hand, has been unable to keep its crown after last year’s decent performance. In the first six months of 2023, it has done nothing for investors’ portfolios, excluding dividends.”

Of the second half, he said: ‘It could be like racing through the mud – there’s plenty coming to the end, but the journey will be challenging.

The prospect of longer interest rates does not create the easiest environment for consumers and businesses.

“Expect further cost cuts from companies that could lead to job losses and reduced consumer confidence, but that could also boost profit margins.”

Oil prices posted losses for the fourth quarter in a row on concerns about the health of the global economy. Brent crude traded at about $115 a barrel a year ago and is now below $75.

With rising interest rates driving up the cost of mortgages, homebuilders have been in trouble in recent months.

Barratt Developments has agreed to sell 604 homes to Citra Living, a private rental subsidiary of lender Lloyds, for £168.4 million.

About 500 homes will be transferred to Citra by June 2024, with the rest to be transferred the following year, Barratt said.

Lloyds, the UK’s largest mortgage lender, launched Citra Living in 2021. ‘Our aim is to bring much-needed, high-quality homes onto the rental market. Our partnership with Barratt helps us achieve that,” said Citra President Andy Hutchinson.

Barratt rose 0.3 percent, or 1.1 pence, to 413.5 pence, while Lloyds shares rose 1.9 percent, or 0.82 pence, to 43.59 pence.

Amid concerns about the future of Thames Water and the wider sector, utilities were once again sliding. Severn Trent fell 1 per cent, or 27p, to 2566p, while United Utilities fell 1.5 per cent, or 14.6p, to 961.6p and South West Water owner Pennon fell 0.8 per cent, or 6p, to 711p.

Petrofac rose 7.4 percent, or 5.45 pence, to 79 pence after the oilfield services company won a £555 million contract from Abu Dhabi National Oil Company.

Carnival rose 5.9 percent, or 72.5 pence, to 1300.5 pence after Jefferies upgraded the cruise line’s shares from “buy” to “hold.”

Finally, the Vanquis Banking Group, formerly known as Provident Financial, appointed former acting chief financial officer at Barclays Sir Peter Estlin as chairman, to succeed Patrick Snowball.

Estlin joined the subprime lender’s board of directors in April. Vanquis fell 0.6 percent, or 1.2 pence, to 190.2 pence.