(Alliance News) - Stock prices in London lacked direction at midday on Thursday ahead of the start of the Jackson Hole Economic Symposium, with investors looking for clues on policy direction heading into the Federal Reserve's next meeting.
The annual event, hosted by the Kansas City Federal Reserve takes place in Wyoming and starts on Thursday, under the theme 'Macroeconomic Policy in an Uneven Economy'. US Federal Reserve Chair Jerome Powell delivers a keynote speech at 8 am Friday morning local time in the western US state, which is 1400 GMT.
There are concerns that the Fed's aggressive approach to combating inflation could lead to a recession in the US, and, in turn, hit a global economy still recovering from the Covid-19 pandemic.
Powell's address follows successive 75 basis point rate hikes by the Fed, with markets now looking for clues as to whether the central bank will enact a similar move next month.
The FTSE 100 was up 6.63 points, or 0.1%, at 7,478.13. The FTSE 250 index was down 66.04 points, or 0.3%, at 19,238.56. The AIM All-Share index was up 2.36 points, or 0.3%, at 900.98.
The Cboe UK 100 index was up 0.1% at 747.76. The Cboe 250 was down 0.2% at 16,591.06. The Cboe Small Companies was up 0.1% at 14,070.37.
In Paris, the CAC 40 stock index was down 0.1%, while the DAX 40 in Frankfurt was down 0.2%.
"There's a lot riding on US Federal Reserve Chair Jerome Powell's address tomorrow. Speculation is running so hot ahead of his remarks that it feels like even subtle variations in intonation could make a difference to jittery markets," commented AJ Bell's Russ Mould.
"Investors appear to be factoring in a pretty aggressive stance from Powell already, anticipating rates going higher and staying there for longer to get inflation under control," Mould added.
In the FTSE 100, CRH was the best performer, up 3.8%. The building materials firm raised its dividend after robust half-year results.
For the six months to June 30, revenue was USD15.0 billion, up 14% from USD13.2 billion last year and pretax profit rose 29% to USD1.2 billion from USD929 million. First-half earnings before interest, tax, depreciation and amortisation was USD2.2 billion, up 22% from USD1.8 billion the year before.
The Dublin-based company declared a 24.0 US cents interim dividend, up 4.3% on 23.0 US cents in the prior year.
Looking ahead, CRH expects annual Ebitda to be USD5.5 billion, up 10% from USD5.0 billion in 2021, in a "challenging cost environment".
CRH also said its acquisition pipeline remains strong and its "significant" balance sheet capacity provides flexibility to capitalise on opportunities to deliver further value for shareholders.
Centrica was down 1.5%. The company's British Gas Energy division announced that it will donate 10% of its profit made during the energy crisis towards grants for customers who are under pressure from rising energy bills.
British Gas generated a pretax profit of GBP98 million for the first half of 2022, meaning that the initial contribution to the British Gas Energy Support Fund should be GBP9.8 million.
However, British Gas will increase its contribution to GBP12 million, to ensure that there is enough available for the winter, when energy usage will be at its highest. From then on, British Gas will contribute 10% of its interim profit to the fund, which will provide customers with grants expected to average GBP750 per household.
The announcement comes as UK industry regulator Ofgem is expected to announce a hefty increase in the energy cap on Friday, amid soaring gas prices in wholesale markets.
In the FTSE 250, Harbour Energy was the standout performer, up 12%, after the North Sea-focused oil and gas firm upped its share buyback programme alongside its interim results.
For the six months to June 30, revenue and other income was USD2.67 billion, surging 78% from USD1.50 billion last year and pretax profit was USD1.49 billion, multiplied from USD120.2 million.
This was on production of 211,000 barrels of oil equivalent per day, up 40% on a year ago. Crude oil sales amounted to USD1.54 billion, up from USD897 million last year, with a post-hedge realised price of USD82 per barrel of oil equivalent, up from USD58 the year prior.
Turning to returns, Harbour increased its USD200 million share buyback initiated in June to USD300 million. Further, it declared an interim dividend of 11 cents.
Hays was up 3.0%. The recruitment firm boosted its dividend, following a surge in full-year profit, due to favourable market conditions and benefits from wage inflation.
For the year which ended June 30, the London-based company reported a pretax profit of GBP204.3 million, more than doubled compared to GBP88.1 million the year before. This was on a revenue of GBP6.59 billion, up 17% from GBP5.65 billion.
Hays proposed a final dividend of 1.90 pence per share, taking its total payout for financial 2022 to 2.85 pence. This is more than doubled from 1.22 pence the year prior. However, it proposed a special dividend of 7.34p, 18% lower than 8.93p a year ago.
Conversely, Grafton Group was down 3.5% after the building products supplier reported a drop in interim pretax profit.
For the six months to June 30, revenue was GBP1.15 billion, up 12% from GBP1.03 billion last year but pretax profit was GBP132.4 million, down 7.3% from GBP142.9 million. Grafton raised its interim dividend 8.8% to 9.25p from 8.50p last year.
Looking ahead, Grafton expects full-year adjusted profit expected to be in line with analyst consensus.
Andy Murphy, director at Edison Group, commented: "This set of results from Grafton Group reflects wider concerns of a potential slowdown within the building merchant sector.
"In the UK particularly, as the cost-of-living crisis deepens with energy bills set to rise in the autumn, we can expect households to reduce discretionary spending on improvements and housing transactions may slow."
New York was pointed to a higher open, looking to build on Wednesday's rally.
The Dow Jones Industrial Average was called up 0.3%, the S&P 500 up 0.5% and the Nasdaq Composite up 0.7%. The indices had closed up 0.2%, up 0.3% and up 0.4%, respectively on Wednesday.
On Wall Street, Salesforce shares were down 6.5% in pre-market trade after the software firm late Wednesday reported a sharp drop in its second-quarter profit.
For the three months ended July 31, the San Francisco-based company posted USD68 million in net income, a sharp drop from USD535 million the previous year. Basic earnings per share also dropped to USD0.07 from USD0.57.
Profit was hurt by a 23% rise in total operating expenses to USD5.40 billion. Revenue, however, climbed by 22% year-on-year to USD7.72 billion from USD6.34 billion. In constant currency, revenue grew by 26% against the prior year.
The company announced its first-ever share buyback programme as part of its path to USD50 billion in revenue by financial 2026.
Nvidia was down 3.4% in the pre-market. The chipmaker late Wednesday said its second-quarter revenue inched higher, as it grapples with a "challenging macro environment".
However, Nvidia expects a third-quarter revenue slide, citing a hit from its Gaming & Professional Visualization arm, as demand cools.
In the second quarter ended July 31, the Santa Clara, California-based firm reported revenue of USD6.70 billion, up 3.0% annually from USD6.51 billion.
Profit tumbled, however. Pretax profit slumped 80% to USD475 million from USD2.39 billion a year earlier. Nvidia reported total operating expenses of USD2.42 billion during the quarter, up 36% year-on-year.
"We are navigating our supply chain transitions in a challenging macro environment, and we will get through this," Chief Executive Jensen Huang said.
The pound was quoted at USD1.1829 at midday on Thursday, up from USD1.1813 at the London equities close Wednesday.
The euro was priced at USD0.9980, unmoved from USD0.9981, having earlier risen back above parity against the dollar. Against the yen, the dollar was trading at JPY136.45 in London, lower against JPY136.80.
Brent oil was quoted at USD101.40 a barrel Thursday at midday, up from USD100.77 late Wednesday. Gold stood at USD1,763.18 an ounce, higher against USD1,752.55.
In the economic calendar, there is a US gross domestic product reading at 1330 BST, before the long-awaited Jackson Hole symposium kicks off.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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