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Today’s market overview

Equities are flat in early trading but  The Trader Dominic Picarda detected a break out yesterday which indicates that the rally’s period of consolidation could be over.

IC TIP UPDATES:

Sell recommendation Direct Line Insurance Group (DLG) has posted a 27.8 per cent improvement in first half profit, primarily due to lower weather-related claims and improved cost controls. A competitive trading environment meant that gross premiums written actually dipped by 4 per cent in the first half.

Fellow sell recommendation Man Group (EMG) continues to suffer from redemptions with funds under management falling to $52bn i n June from $57bn in December. This was made up of sales of $6.5bn and redemptions of $11.5bn. Investment gains were cancelled out by currency movements. The company continues with its cost saving programme with $270m worth of cuts identified to be delivered by 2015.

Motor retailer Inchcape (INCH) has posted record first half profits of £147m from sales of £3.3bn with Asia Pacific and other emerging markets still a bright spot. We keep our buy recommendation.

Packaging giant Rexam (REX) posted a 1 per cent rise in sales in the first half, in line with a subdued global market in beverage cans. Underlying profits at the cans business dipped by 2 per cent. The company is progressing plans to sell off its healthcare packaging business. Buy.

KEY STORIES:

Royal Bank of Scotland (RBS) confirmed the appointment of Ross McEwan as chief executive alongside half year results today. In the first half RBS posted pre-tax profits of £1.37bn as it benefited from improving economic conditions in the UK and its ongoing rationalisation programme. The bank is confident of growing its Core Tier 1 capital ratio to 9 per cent-plus by the end of this year.

British Airways owner International Consolidated Airlines Group (IAG) posted second quarter operating profits of €245m, compared with a €4m loss last year as it grew revenues from passengers and kept costs down. The operating loss for the first half amounted to €33m, a significant improvement from the loss of €253m posted last year.

OTHER COMPANY NEWS:

Bookmaker William Hill (WMH) continues to benefit from its strong online operations, which grew net revenues by 18 per cent in the first half of the year while the retail operations grew revenues by 11 per cent.

Foundry business Vesuvius (VSVS), which demerged from Cookson Group last year, posted improved sequential performance based on the second half of 2012 with revenues of £773m and a trading profit of £71m in the six months of 2013.

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