4th Aug 2021 08:57
(Alliance News) -Â Taylor Wimpey early Wednesday was leading the FTSE 100 higher into a closely watched UK services PMI release for July.
The FTSE 100 index was up 30.97 points, or 0.4%, at 7,136.69 early Wednesday. The mid-cap FTSE 250 index was up 68.38 points, or 0.3%, at 23,358.03 as it continues to trade at record highs. The AIM All-Share index was up 0.2% at 1,260.56.
The Cboe UK 100 index was up 0.4% at 711.00. The Cboe 250 was up 0.3% at 21,126.22, and the Cboe Small Companies up 0.1% at 15,252.93.
In mainland Europe, the CAC 40 in Paris was up 0.5% while the DAX 30 in Frankfurt was 0.8% higher.
"Final services PMIs for July will be released across a number of European countries and the US. With the end of lockdowns many euro area countries are seeing an accelerating service sector recovery, but with the spreading of the Delta variant, some headwind on tourism, travel and hospitality sectors will likely remain," said Danske Bank.
The economic events calendar on Wednesday has services purchasing managers' index readings from Germany, the eurozone and UK at 0855 BST, 0900 BST and 0930 BST respectively, with the US Markit PMI print at 1445 BST and the ISM report at 1500 BST.
Sterling was quoted at USD1.3927 early Wednesday, higher than USD1.3895 at the London equities close on Tuesday. The euro traded at USD1.1873, firm on USD1.1860 late Tuesday. Against the yen, the dollar edged up to JPY109.11 versus JPY109.02.
Outside of PMIs on Wednesday, US ADP employment is due at 1315 BST, a precursor to the key US non-farm payrolls report on Friday.
"The US economy is expected to have added close to 700,000 new private jobs during the month of July, near the amount added a month earlier. We know that the actual print could be significantly lower or higher than the estimate figure, but as long as we see a figure above 500-600,000, investors should walk confident into Friday's NFP data," said Ipek Ozkardeskaya, senior analyst at Swissquote.
Released overnight was a mixed set of PMIs in Asia, with the Chinese service sector rebounding in July but Japan's contraction worsening.
The Chinese Caixin headline seasonally adjusted services PMI came in at 54.9 points in July, rebounding from June's 14-month low of 50.3. Underpinning the sharper upturn in activity was a further rise in new business.
The seasonally adjusted Japan services PMI dipped in July to 47.4 points from 48.0 in June, both indicating shrinking activity.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.2%. In China, the Shanghai Composite ended up 0.9%, while the Hang Seng index in Hong Kong was up 0.9% in late trade. The S&P/ASX 200 in Sydney closed up 0.4%.
In London, Taylor Wimpey shares rallied 3.6%. The housebuilder raised full-year guidance as the UK property market continues to boom.
Revenue for the first half of 2021 surged to GBP2.20 billion from GBP754.6 million a year ago, while the construction company swung to a pretax profit of GBP287.5 million from a loss of GBP39.8 million.
"The UK housing market has continued to perform strongly across all our geographies in the first half of the year. Having entered 2021 with an excellent order book, we have delivered a strong first half performance, benefiting, as anticipated, from delayed Q4 2020 completions and the continuing strength in the housing market," said Taylor Wimpey.
Forward indicators remain robust, it added, and build cost and supply chain pressure is being fully offset by "healthy" house price growth.
Taylor Wimpey now expects full-year operating profit to be GBP820 million, above the top end of consensus. This compares with just GBP300.3 million in 2020, and approaches the pre-pandemic level of GBP850.5 million in 2019.
Legal & General rose 1.8% as it flagged earnings "well above" pre-virus levels in a strong first half.
The 185-year old insurer posted operating profit of GBP1.08 billion for the first half of 2021, up 14% on a year ago, and earnings per share of 17.78p, up sharply on the 4.89p achieved a year ago and 21% higher than 2019.
"We remain confident in achieving our five-year cumulative financial ambitions. In the first half of 2021, we continued to build on the good start we made in 2020. We expect to deliver double-digit growth in operating profit at the full year," the company said.
L&G lifted its interim payout by 5% to 5.18p.
Shore Capital said L&G's operating profit before tax was 8% ahead of market consensus and the interim dividend also slightly ahead of expectations.
Rolls-Royce rose 1.7% after agreeing to sell its Bergen Engines medium speed liquid fuel and gas engines business to Langley Holdings for an enterprise value of EUR63 million.
"Sale proceeds of EUR70m from the transaction together with EUR40m of cash currently held within Bergen Engines which is to be retained by Rolls-Royce, will be used to help rebuild the Rolls-Royce balance sheet," it said.
This follows an aborted deal earlier in the year after the Norwegian government put the brakes on the proposed sale of the Bergen unit to TMH Group, a privately owned company headquartered in Russia that makes locomotives and rail equipment. Rolls-Royce had planned to sell Bergen to TMH for EUR150 million before the Norwegian government blocked the sale on national security grounds.
Rolls-Royce on Wednesday said it has notified the Norwegian government of the agreed sale. Bergen Engines will be operated by Langley Group as a stand-alone business.
Gold was quoted at USD1,814.55 an ounce early Wednesday, higher than USD1,809.00 on Tuesday. Brent oil was trading at USD72.29 a barrel, up from USD71.83 late Tuesday.
By Lucy Heming;Â [email protected]
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