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Shares are reluctant to jump despite strong quarterly results

The FTSE 100 crept above 7,000 as UK markets opened on Wednesday, with strength among UK-facing banks offset by weakness in miners and pharma stocks.

“Barclays topped the FTSE risers after its quarterly numbers sounded the right notes with news on dividends, share buybacks and a greater than expected release of provisions set aside to cover any potential loan losses relating to Covid,” says Danni Hewson, financial analyst at AJ Bell.

“The second quarter earnings season is proving to be a mixed bag for markets, with investors looking past many impressive top line figures and digging deeper into the numbers to find anything they can to worry about.”

“It says a lot when a big-name stock like Apple doesn’t see a share price jump on better-than-expected quarterly earnings,” says Hewson said.

Microsoft also beat expectations, yet its shares barely moved in after-hours trading as good headline news on earnings was offset by concerns about a slowdown in the rate of growth for its Azure cloud computing operations.

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All eyes will be on the US Federal Reserve which is in the middle of its two-day policy meeting.

“As always, investors will want to know the central bank’s latest view on the outlook for the US economy and whether it is time to tinker with policy support measures.”

The spread of the Delta virus variant in recent weeks and months could give the Fed reason to make no changes to its policy.

FTSE 100 Top Movers

St James’s Place (5.32%), Fresnillo (4.68%) and IAG (4.12%), each making strong gains, led the way on the FTSE 100 during the morning session on Wednesday.

HSBC (-1.79%), BHP (-1.58%) and Reckitt (-1.43%) are Wednesday’s three biggest losers heading into the second half of the week.

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