London midday: FTSE maintains gains as Shell rallies on update

(Sharecast News) - London stocks were still in the black by midday on Tuesday, helped along by a well-received update from Shell, as investors mulled results from Samsung and the latest data on UK house prices.

The FTSE 100 was up 0.4% at 10,693.54, while Brent crude was up 1% at $72.68 a barrel and West Texas Intermediate was 0.8% higher at $69.12 following reports of an attack on a vessel in the Strait of Hormuz.

Susannah Streeter, chief investment strategist at Wealth Club, said: "An LNG tanker was hit while exiting the narrow waterway, sparking fresh concerns about whether the Iran-US agreement to keep the Strait open will hold."

Market participants were mulling the latest results from Samsung, whose shares tumbled despite the South Korean chipmaker seeing second-quarter profits surge 1800%.

In a brief pre-earnings update, Samsung said that operating profits in the three months to June end were estimated to have soared to 89.4trn won (�43.7bn) from 4.7trn won a year previously. Revenues were slated to rocket 129% at 171trn won. Consensus had been for profits closer to 87.3trn.

Dan Coatsworth, head of markets at AJ Bell, said: "Although Samsung's results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it's a bubble waiting to burst.

"This is where the UK stock market has an advantage. In an environment where tech is going out of favour, the FTSE 100 could shine as it has everything else on the menu. There are plenty of jam today companies on the UK stock market offering decent profits and much less of the jam tomorrow-type companies omnipresent in the US."

Neil Wilson, UK investor strategist at Saxo Markets, said: "We don't have chipmakers so the FTSE 100 is defying the tech gloom." He said the index "is flirting with the 10,700 area but struggling to break out", adding that a clear move here could see the all-time highs hit again and the 11,000 mark taken out on a fresh momentum drive.

"The index has been a bit of a coiled spring the last four months and looks ready to break out," Wilson said.

Meanwhile, industry data showed that house prices ticked up in June as mortgage rates started to ease.

According to the latest Lloyds house price index - formerly the Halifax HPI - British house prices increased 0.2% in June, following a 0.2% softening in May. It was the first increase for four months and slightly ahead of consensus expectations for a 0.1% uplift. The average property price now stands at �299,330.

Year-on-year, house prices rose by 0.6%, up from May's 0.5%.

Lloyds noted that while affordability remained stretched for many buyers, mortgage rates have eased off recent highs, helping those looking to move home.

Amanda Bryden, head of mortgages at the lender, added: "While latest industry data shows the number of new mortgage approvals dropped in May, this wasn't unexpected given the spike in rates seen earlier this year, and we'd expect to see activity recover, assuming borrowing costs continue to fall.

"We expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor.

"The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving."

In equity markets, Shell gained as the oil giant said that trading & optimisation earnings in its integrated gas division are expected to be "significantly" higher in the second quarter and lifted its production guidance for the segment.

It also said it expects an improvement in its working capital position due to the impact of "unprecedented volatility" in commodity prices. Shell now forecasts a cash inflow of $1bn to $6bn in the second quarter, following a $11.2bn outflow in the first quarter.

Consumer goods stock were on the front foot, with drinks maker Diageo and Unilever among the top risers.

Geotechnical contractor Keller surged as it said fullyear revenues and underlying operating profits will be materially ahead of current market consensus, while Victrex shot up as it maintained full-year guidance and reported an 18% jump in third-quarter group revenues.

On the downside, heavily-weighted miners slid, with Antofagasta, Anglo American, Rio Tinto and Glencore among the worst performers on the FTSE 100.

Polar Capital Technology Trust - which has Samsung among its top 10 holdings - was under the cosh.

ITV slumped as JPMorgan downgraded the shares to 'neutral' from 'overweight' after the broadcaster announced on Monday that it was selling its media and entertainment business to Comcast-owned Sky for up to �1.6bn.

Market Movers

FTSE 100 (UKX) 10,693.54 0.39%

FTSE 250 (MCX) 23,447.85 -0.24%

techMARK (TASX) 6,024.50 -0.04%

FTSE 100 - Risers

Diageo (DGE) 1,563.00p 3.48%

Burberry Group (BRBY) 1,129.50p 3.39%

Unilever (ULVR) 4,691.50p 2.95%

London Stock Exchange Group (LSEG) 9,036.00p 2.88%

Shell (SHEL) 2,990.50p 2.68%

Relx plc (REL) 2,452.00p 2.59%

Rentokil Initial (RTO) 455.70p 2.52%

Associated British Foods (ABF) 1,945.00p 2.45%

Land Securities Group (LAND) 667.00p 2.30%

Experian (EXPN) 2,712.00p 2.22%

FTSE 100 - Fallers

Abrdn (ABDN) 255.20p -2.44%

Antofagasta (ANTO) 3,800.00p -2.44%

Anglo American (AAL) 3,697.00p -2.17%

Rolls-Royce Holdings (RR.) 1,469.60p -2.03%

Rio Tinto (RIO) 6,914.00p -1.72%

Barclays (BARC) 519.90p -1.68%

Airtel Africa (AAF) 338.00p -1.40%

Fresnillo (FRES) 2,801.00p -1.37%

Diploma (DPLM) 6,970.00p -1.34%

Computacenter (CCC) 4,342.00p -1.27%

FTSE 250 - Risers

Keller Group (KLR) 3,294.00p 23.04%

Victrex plc (VCT) 696.00p 19.79%

NCC Group (NCC) 138.20p 6.13%

Telecom Plus (TEP) 788.00p 2.74%

Pagegroup (PAGE) 120.20p 2.73%

Barr (A.G.) (BAG) 645.00p 2.71%

Hays (HAS) 35.88p 2.22%

Moonpig Group (MOON) 267.20p 2.14%

Close Brothers Group (CBG) 407.20p 2.10%

WPP (WPP) 261.10p 1.99%

FTSE 250 - Fallers

ITV (ITV) 75.60p -7.03%

Genus (GNS) 2,128.00p -5.34%

W.A.G Payment Solutions (EWG) 105.00p -3.83%

Seraphim Space Investment Trust (SSIT) 192.40p -3.80%

Raspberry PI Holdings (RPI) 855.75p -3.41%

XP Power Ltd. (DI) (XPP) 1,866.00p -3.32%

Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,498.00p -3.23%

Discoverie Group (DSCV) 646.00p -3.00%

Travis Perkins (TPK) 549.50p -3.00%

Pacific Horizon Inv Trust (PHI) 1,104.00p -2.82%