FTSE Flatlines Ahead Of U.S. Federal Reserve Rate Announcement -

FTSE Flatlines Ahead Of U.S. Federal Reserve Rate Announcement

May 02, 2024Jeremy ParkinsonFinance, No picture0

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On Thursday, Britain’s top stock index saw an increase in value as Shell and Standard Chartered shares surged following positive financial results. Additionally, investors found reassurance in the Federal Reserve’s decision to rule out further interest rate hikes. The FTSE 100, comprising leading companies, experienced a 0.85% rise. The direction of the market will depend on upcoming data, and this will have an impact on whether the Fed decides to cut rates this year. Money markets have already factored in a rate cut by the Bank of England (BoE) in September following the Fed’s meeting.Standard Chartered’s shares on the London stock exchange rose by approximately 7%, making it the top percentage gainer on the FTSE 100 index. This increase follows the bank’s Q1 profit beat, with a 5.5% rise in pretax profit driven by higher interest rates and strong performance in its markets trading business, despite a surge in credit losses. The bank, which generates the majority of its revenue and profits in Asia, also saw a 13% increase in profit at its investment banking unit during the quarter. Rival banks with significant exposure to Asia, such as HSBC Holdings Plc and Prudential Plc, also experienced gains of 1.3% and 1.6% respectively. Analysts at Hargreaves Lansdown highlighted the resilience of credit quality metrics for Standard Chartered, emphasising its importance for Asian-focused banks like Standard Chartered and HSBC, both of which had previously written down the value of Chinese assets in past quarters. Standard Chartered’s stock reached its highest level since October 27, 2023, and as of the last close, it was up approximately 4% year-to-date.Smurfit Kappa, Europe’s largest paper packaging producer, saw a 3.8% increase in its London-listed shares, making it one of the top gainers on the FTSE 100 index. Although the company’s Q1 core profit declined significantly compared to the previous year, it showed improvement from the final quarter of 2023, indicating a rebound in demand for packaging. Q1 volumes also increased, with a 3% growth in Europe and 2% in the Americas. The CEO noted an improving pricing environment, which also had a positive impact on the results of Smurfit Kappa’s London-listed peer, Mondi, which saw a 1.4% increase. Smurfit Kappa’s shares have risen by approximately 16% in 2024 so far.Shell’s stock rises by 1.3% after beating market expectations with an adjusted profit of $7.7 billion in Q1. The company also announces a $3.5 billion share repurchase. The better-than-expected results are attributed to strong oil trading and higher refining margins. Despite the positive performance, the company maintains its dividend unchanged from the last quarter. Prior to this, the stock had already risen by 9.6% since the beginning of the year.On the negative side of the ledger Melrose Industries, a UK-based company, has maintained its annual forecasts despite experiencing a 2% drop in shares, which are currently valued at 608.4p and are the top percentage loser on London’s blue-chip market. The British aerospace firm reported an 8% year-over-year increase in first-quarter revenue and a rise in underlying operating profit. However, the revenue growth fell short of RBC’s forecast of 10%. Analysts at Investec expressed caution regarding supply chain constraints on the planned ramp-up but remained optimistic about demand. Despite the drop in shares, the company’s stock has seen an 11% increase so far this year, as of the close of trading on Wednesday.
FTSE Bias: Bullish Above Bearish below 8050