23rd Feb 2024 08:47
(Alliance News) - Stock prices in London opened mixed on Friday, with the FTSE 100 lifted by well-received results from Standard Chartered.
The FTSE 100 index opened up 5.43 points, 0.1%, at 7,689.92. The FTSE 250 was down 65.21 points, 0.3%, at 19,198.29, and the AIM All-Share was down 0.97 of a point, 0.1%, at 748.99.
The Cboe UK 100 was up 0.1% at 770.16, the Cboe UK 250 was down 0.4% at 16,604.51, and the Cboe Small Companies was down 0.1% at 14,474.52.
In European equities, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was flat.
In the FTSE 100, Standard Chartered jumped 6.0%, after it announced a new USD1 billion share buyback, as it reported a double-digit profit rise for 2023.
The London-based, Asia-focused bank brought in operating income of USD18.02 billion, a 10% increase from USD16.32 billion a year before. Net interest income increased 2.4% to USD7.77 billion from USD7.59 billion, while non NII jumped 17% to USD10.25 billion from USD8.73 billion. Pretax profit increased 19% to USD5.09 billion from USD4.29 billion.
StanChart proposed a final dividend of USD0.21 per share, bringing the full-year total to USD0.27 - a 50% increase from the prior year's 18-cent payout. It also announced plans for a USD1 billion share buyback to start "imminently".
Looking ahead, the firm guided for operating income to increase between 5% and 7% in the period from 2024 to 2026, and around the top of this range in 2024. Net interest income for 2024 is forecast to be between USD10 and USD10.25 billion at constant currency.
It plans to return "at least" USD5 billion to shareholders over 2024 to 2026, with its RoTE to "increase steadily" from 10% towards a 12% target by 2026.
"The outlook for 2024 is a smidge lower than analysts had priced in but the medium-term guidance out to 2026 shows promising signs. Volume growth, cost cuts and a benefit from the structural hedge are expected to help deliver a return on tangible equity of 12% in 2026 (10% 2023). If delivered, that should provide a material tailwind to the current valuation," said Matt Britzman, equity analyst at Hargreaves Lansdown.
HSBC added 1.1% in a positive read-across.
In the FTSE 250, Breedon added 1.8%, as Barclays raised the stock to 'overweight' from 'equal weight'. Domino's Pizza fell 3.2% as Barclays cut the stock to 'equal weight' from 'overweight'.
Among London's small-caps, City of London Investment rose 4.7%.
The investor in London-listed equities said its net asset value increased to 401.7 pence at December 31, from 385.2p at the end of June. Its NAV total return of 6.5% beat the FTSE All-Share index's return of 5.2%.
On AIM, Empyrean Energy and Coro Energy rose 17% and 32% respectively, after noting the receipt of approval for the gas price and volume allocation for the Mako field project from the Indonesian Minister of Energy & Natural Resources.
"This is a significant milestone that allows Conrad, the operator of the Duyung PSC, to finalise fully termed gas sales agreements," Coro explained.
In bad news for UK retailers, consumer confidence has stalled after months of positivity as stubborn inflation led households to limit their spending, figures suggest.
GfK's long-running Consumer Confidence Index fell two points to minus 21 in February, although the forecast for personal finances over the next 12 months remained unchanged and is 18 points higher than this time last year.
In the US on Thursday, Wall Street rallied, with the Dow Jones Industrial Average up 1.2%, the S&P 500 2.1% - both notching new record highs - and the Nasdaq Composite jumped 3.0%, closing just shy of its all-time high.
Following an impressive set of results, Nvidia shares soared 16%, adding about USD250 billion to its market capitalisation, setting a new daily record increase.
"While a lot of the excitement might be justified, we are entering the realms of frothiness, which of course increases risk. Latest figures show that the US market remains tight, which further muddies the picture for the Federal Reserve. Those banking on swift rate cuts are likely going to be disappointed," commented Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
The AI-fuelled optimism helped stocks shake off hawkish comments from several US Federal Reserve officials.
Three Fed officials called for patience on interest rate cuts Thursday, with one of them suggesting they wanted to see "at least another couple more months of inflation data" before deciding when to start lowering rates.
The dollar was mixed against major currencies in early exchanges in Europe.
Sterling was quoted at USD1.2670 early Friday, higher than USD1.2641 at the London equities close on Thursday. The euro traded at USD1.0828, higher than USD1.0817. Against the yen, the dollar was quoted at JPY150.63, up versus JPY150.53.
"The Fed rate cut expectations are being scaled back, yet the dollar doesn't gain the attraction that it deserves. That's a good thing, mind you, to prevent the US inflation from spilling to the rest of the world, but it's not fully rational," observed Ipek Ozkardeskata, senior analyst at Swissquote Bank.
Meanwhile, in Asia on Friday, financial markets in Japan were closed for a public holiday. In China, the Shanghai Composite closed up 0.6%, while the Hang Seng index in Hong Kong was up 0.1%. The S&P/ASX 200 in Sydney closed up 0.4%.
In commodities, gold was quoted at USD2,020.20 an ounce early Friday, a touch lower than USD2,022.91 on Thursday. Brent oil was trading at USD83.28 a barrel, down slightly from USD83.33.
By Elizabeth Winter, Alliance News deputy news editor
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