Quite a turnaround for stocks: the Nikkei jumped +1.5% at one point overnight though this tempered to +0.20% on more yen strength while the Hang Seng surged more than +0.80%; the Sensex was up more than +1%. Asian stocks had been primed to lift somewhat from a much better US showing on Thursday with the Dow putting on +0.80% and the Nasdaq claiming an +1.30% rise.
Some of this US come-back was premised on President Trump’s tax reform bill passing – the US tax code has not seen any significant reform since the era of Ronald Reagan – and some more stronger earnings numbers. Including a massive earnings lift for Wal-Mart. Cisco earnings also surprised.
The pound is +0.33% higher against the dollar to 1.3233 while the euro climbs +0.27% to 1.1822. European Central Bank President Mario Draghi is due to speak in Frankfurt later on today. One major piece of stock news this morning: Carillion has issued a third profit warning and there is concern it could renege on its financial covenants.
- UK FTSE 100 7,386.94 +0.19%
- Dow 23,458.36 +0.80%
- S&P 500 2,585.64 +0.82%
- Nasdaq 6,793.29 +1.30%
- Nikkei 225 22,396.80 +0.20%
- DAX 13,047.22 +0.55%
- CAC 40 5,336.39 +0.66%
- Gold 1,282.30 +0.31%
- Oil WTI 55.34 +0.36%
Nationwide profits come under pressure
At 7am Nationwide revealed a substantial pre-tax half-year profits slump to £628m. Nationwide saw profits of close to £700m for the first half of 2016 in comparison. Like many mutuals, the building society continues to struggle against low interest rates. Underlying profits were worth £588m compared to £615m in 2016 for the same time frame.
“Despite the recent base rate rise, borrowing costs overall remain low,” said Nationwide this morning. “However, we know that low wage growth and inflation are putting pressure on household budgets and we remain alert to signs of financial strains on consumers."
Kier "on course"; Sky Bet renews EFL relationship
We move onto FTSE 250 property construction and services player Kier Group. Though a bit light on numbers Kier says operations are in line with expectations and “the Group remains on course to deliver double digit profit growth in the current year”.