The FTSE 100 ground out a 0.3% gain to 7,436 early afternoon trading on Wednesday, as the market’s eyes turned to US House Speaker Nancy Pelosi’s recent return from Taiwan and the meeting of OPEC+.
“Investors already have more than enough on their plate. Now they find themselves having to make room for one more worry, as tensions build between the US and China,” said AJ Bell investment director Russ Mould.
“So far the response has been to hold military drills and step up sanctions on a country it regards as a breakaway province.”
US markets remained steady, with pre-open trading seeing a 0.4% rise in Dow Jones future to 32,497, a 0.4% gain in the S&P 500 to 4,111.2 and a 0.4% uptick in the NASDAQ to 12,978.
Asian markets seemed to trend in split directions, with a 0.4% climb in the Hang Seng to 19,767 and a 0.7% fall in the Shanghai SSE to 3,163.6.
Meanwhile, the price of Brent Crude oil cracked the $100 per barrel mark after dipping to $99 in earlier trading following reports that OPEC would be increasing output by a mere 100,000 barrels per day from September.
Experts described the miniscule rise as an “insult” to US President Biden, with the increase covering an equivalent of 86 seconds of worldwide demand.
OPEC’s refusal to raise its output was linked to its lack of spare capacity among parties to add more barrels, along with a necessity to ensure cooperation with Russia as part of the extended OPEC+ collaboration.
Interestingly, current supply fears have actually been met with reverse concerns over demand, following weaker than projected economic data from China in Q2 2022 reported last week.
FTSE 100
Avast shares surged to the top of the FTSE 100 with an absolutely outstanding 42.7% spike of 42.7% to 682.4p after the Competition and Markets Authority (CMA) reported its provisional green light for the company’s acquisition by NortonLifeLock.
The £6 billion agreement had been under investigation by the institution for possible competition violations, however it confirmed the merged company would still face credible competition, including from major rival McAfee.
Taylor Wimpey shares gained 5.1% to 126.2p, defying concerns of a housing market slowdown with a revised operating profit guidance at the top end of market expectations for FY 2022.
The company announced completions slightly ahead of expectations at 6,790, falling below its 7,219 completions in HY1 2021.
Taylor Wimpey confirmed rising cost inflation of 9% to 10%, however it commented the inflation would be offset by house price increases of 4% to 5% in the coming year.
“First half results from Taylor Wimpey were impressive, no question about it. To be guiding toward profit at the top end of consensus forecasts, despite facing challenges around surging raw material costs, shortages of skilled workers and lingering supply chain issues, is no mean feat,” said AJ Bell investment director Russ Mould.
“Unlike some of its peers, Taylor Wimpey is on track to hit volume targets and, like a gazelle eluding a hungry lion, house price growth somehow continues to outpace inflationary and interest rate pressures for now.”
“Taylor Wimpey is not alone in having a strong balance sheet and it has invested in land at attractive prices. This, plus the long-standing supply and demand imbalance in the UK housing market, provides at least some confidence in the long-term outlook.”
Entain shares rose 2.4% to 1,234.5p following the successful extension of its community sports investment-based partnership with the Trident Leagues.
The gambling firm commented the multi-year extension would provide essential funding for the company in the years ahead.
Rolls Royce shares climbed 2.2% to 8,978.5p following its reported approval from the Spanish government to sell its ITP Aero subsidy for £1.5 billion to a consortium of investors led by Bain Capital Private Equity.
The sale is scheduled to close in the coming weeks, now that all the relevant regulatory authorities have approved the transaction.
“ITP Aero will remain a key strategic supplier and partner for Rolls-Royce across both Civil Aerospace and Defence programmes,” said Rolls Royce in a statement.
