FTSE indices struggled for an overall direction throughout the day, as the pound continued to rally against both the euro and dollar as the day progressed. Sterling received a kicker as a UK government debt sale helped the pound appreciate 1% against the dollar. The £4.75bn debt sale attracted £21bn of orders putting pressure on other currencies, as the British pound has proved to be the best performing currency over the past five days. It seems investors have deferred any reservations they have surrounding a Brexit for the time being.
Standard Chartered helped lift the FTSE 100 today as it traded 10% higher as we write after reporting lower than expected impairment charges for non-performing loans in the first quarter of 2016. First-quarter impairment losses on bad loans improved slightly to US$471m in the quarter from US$476m year-on-year, shrinking from the US$1.13bn seen in the final months of 2015. NPLs were also seen to be growing at a lower rate, another positive which saw the bank beat analyst expectations and see its biggest intra-day gain since May 2010.
BP(+4.45%) also played its part in lifting the primary index after issuing Q1 results declaring a loss, swinging from a profit in the same period last year and beating analyst expectations. The loss came in at US$583m for the quarter, compared to a US$2.6bn profit a year earlier but much narrower that the US$3.3bn loss made in Q4 2015. The downstream business saw a boost from BP’s trading arm, managing to call the rebound in oil, an analyst from CMC Markets claimed.
Cobham (-17.5%) fell dramatically today after investor were spooked as the communication, aviation and defence systems company issued a profit warning for 2016 following a weak Q1, and announced a rights issues to shore up holes in its balance sheet. Q1 trading profit was £15m, well behind the £50m made in Q1 2015, as weaker performance was attributed to operational issues in its Wireless division delaying shipments, and a booked £9m one-off charge.
At the close European indices were down with the FTSE 100 +0.38%, with the CAC 40 -0.28%, and the DAX 30 -0.34%.