FTSE 100 hits two-year high with strong results

The FTSE 100 extended gains on AstraZeneca’s earnings – Photo: Shutterstock

UK stocks edged higher on Thursday morning, with the FTSE 100 index hitting a new nearly two-year high, boosted by mining stocks and the bumper results of AstraZeneca. The pharmaceutical company revealed that it expects sales to increase in 2022, following its better-than-expected quarterly earnings report.

European equities reflected a similar sentiment as the Euro Stoxx 50 index rose, buoyed by strong quarterly earnings from German conglomerate Siemens. Companies such as French wine merchant Pernod Ricard have also announced that they expect robust sales growth in 2022.

Overnight in Asia, Hong Kong’s Hang Seng Index (.HK50) climbed, as did the US S&P 500 Index (.US500).

What is interesting today: Packaging firm Smurfit Kappa rose around 1.9% after record profits in 2021, with the company announcing plans to raise prices further this year. Vodafone rose around 1.7% on speculation that French telecommunications group Iliad is taking a full interest in Vodafone Italia.

Why are stocks up today?

Image of stock chart Credit: TradingView

Strong Earnings and Quarterly Earnings: A continued trend of strong earnings and quarterly earnings from various companies has boosted the markets significantly.

  • What does that mean: Investors have long worried about the effects of the ongoing pandemic, rising energy prices and supply chain constraints, among others, on businesses over the past two years. This led to negative expectations for last year’s earnings as travel restrictions and rising costs kept several companies on their toes. The continued trend of strong quarterly earnings and earnings announcements, however, reassured investors that last year’s constraints may have had less of a negative impact on markets than previously thought.

Scholarships: Key Highlights

  • The FTSE 100 index (.UK100) edged up 0.08% to 7649.2 points
  • The Euro Stoxx 50 index (.EU50) rose 0.20% to 4212.6 points
  • The German DAX index (.DE40) climbed 0.22% to 15,516.7 points
  • The French CAC 40 (,FR40) index rose by 0.09% to 7137.3 points
  • The leading sectors in the UK were tech services and health tech, while consumer non-durables and business services lagged
  • US futures on the S&P 500 edged down 0.14% to $4,571.5

Market sentiment

  • The CBOE Volatility Index, or VIX (.VIX), a measure of expected swings in US stocks, rose to 20.60
  • The US dollar index fell slightly to $95.63
  • The yield on US 10-year bonds fell to 1.948%

Top Stock Gainers in the UK and Europe

  • The best performing companies in the UK were Informa, AstraZeneca and Prudential
  • Shares of publishing firm Informa rallied after the company announced it was launching a share buyback program
  • Shares of big pharma AstraZeneca rose after the company reported sales of around £3billion due to Covid-19
  • Shares of insurance company Prudential rose after the company announced its next CEO would operate from Asia after Mike Wells opted out
  • The main equity gainers in Europe were Siemens, Adyen BV Parts Sociales and AB InBev
  • Shares of German automation company Siemens rose after the company announced it would soon sell its logistics business to German technology group Koerber
  • Shares of payments company Adyen BV Parts Sociales gained after the company was recently flagged as “Buy” by Berenberg
  • Shares of brewing company AB InBev rose slightly following the company’s release of a carb-free beer called “Bud Light NEXT” in the United States

Main losers from equities in the UK and Europe

  • The worst performing companies in the UK were Unilever, Relx and Evraz
  • Shares of consumer goods company Unilever fell slightly after the company warned further price hikes could be on the way
  • Shares of mining company Evraz fell on a drop in steel sales as Russian export pressures continued to weigh heavily
  • The main stock market losers in Europe were L’Oréal, Danone and Deutsche Telekom
  • Shares of Paris-based food company Danone fell after the company recently backed US-based meal delivery company Splendid Spoon
  • Deutsche Telekom shares fell following the company’s recent withdrawal from its cloud gaming services business

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