London stocks closed in positive territory on Thursday, helped along by well-received updates from the likes of AB Foods and Aveva, as investors mulled the latest US jobless claims and UK manufacturing data.
The FTSE 100 ended the session up 1.25% at 7,125.16, and the FTSE 250 was 1.1% firmer at 22,622.54.
Sterling was in the red, meanwhile, last trading 0.38% lower against the dollar at $1.3779, and weakening 0.4% on the euro to €1.1620.
“The FTSE 100 has outperformed its peers today, as dovish tones from the Bank of England helped to drive the pound lower,” said IG senior market analyst Joshua Mahony.
“Despite warnings from the Fed that rising prices could ultimately draw forward the tightening phase for monetary policy, BoE governor Andrew Bailey instead laid out a confident stance that higher prices would be temporary in nature.
“While Bailey admitted we could soon see inflation hit 4%, the temporary nature of that rise should ensure the bank can remain accommodative throughout this economic recovery.”
In data released earlier in the afternoon, first time jobless claims in the US retreated to their lowest level since March 2020, in a further sign of the challenges faced by companies to retain workers.
According to the Department of Labor, initial unemployment claims fell by 51,000 to 364,000 over the week ending on 26 June.
Economists had penciled-in a reading of 410,000.
“It’s possible, then, that the recent data signal a slowing in the trend rate of decline in claims, but these numbers are noisy and we aren’t going to rush to judgment on the back of such a short run of data,” said Ian Shepherdson, chief US economist at Pantheon Macroeconomics.
Shepherdson also cautioned that, as was the case each year, the claims data until the end of July would be distorted due to the rolling shutdowns across the US automobile industry.
Closer to home, a survey released in the morning showed a slowing in UK manufacturing growth in June, with the IHS Markit/CIPS manufacturing purchasing managers’ index falling to 63.9 from May’s record high of 65.6, and below the flash estimate of 64.2.
A level below 50.0 signals contraction, while a level above indicates expansion.
The survey found that the industry was still beset by supply-chain and distribution issues, leading to longer vendor lead times and disruption to production schedules.
“As global markets opened up still further in June, the manufacturing sector continued to enjoy a swell of new orders from home and abroad with work coming in from Asia, the US and Europe,” said Duncan Brock, group director at the Chartered Institute of Procurement and Supply.
“Overall productivity however, showed some signs of slowing compared to the previous month as snarled supply chains were in danger of seizing up and operating capacity tightened.
“Supply chain managers worked around the clock to source ever-dwindling resources of raw materials, and building stock, resulting in supplier delivery times worsening again.”
In equity markets, industrial software firm Aveva rallied 2.72% after saying it had a good start to the 2022 financial year, achieving 10% revenue growth in the first two months on an organic, constant currency basis.
Associated British Foods was also on the rise, advancing 4.83% after saying it expected annual profit to be in line with the year before as sales at Primark outstripped forecasts in the third quarter.
JD Sports Fashion gained 5.44% after it said it was on track to deliver annual profits of at least £550m, as it pledged to split the roles of chief executive and chairman and would consider paying back government furlough cash.
On the downside, Micro Focus plunged 14.79% even after it said its first-half revenue performance was ahead of expectations.
AO World was off 4.03% despite the electricals retailer reporting a jump in full-year profits and revenue, as it continued to benefit from a shift to online shopping since the pandemic.
Market Movers
FTSE 100 (UKX) 7,125.16 1.25%
FTSE 250 (MCX) 22,622.54 1.10%
techMARK (TASX) 4,467.36 0.49%
FTSE 100 – Risers
JD Sports Fashion (JD.) 969.00p 5.44%
Associated British Foods (ABF) 2,327.00p 5.01%
International Consolidated Airlines Group SA (CDI) (IAG) 181.00p 3.89%
Compass Group (CPG) 1,581.00p 3.88%
Hikma Pharmaceuticals (HIK) 2,540.00p 3.84%
Melrose Industries (MRO) 160.80p 3.68%
Fresnillo (FRES) 796.00p 3.16%
BP (BP.) 324.50p 3.02%
Royal Dutch Shell ‘A’ (RDSA) 1,488.60p 2.89%
Royal Dutch Shell ‘B’ (RDSB) 1,438.80p 2.84%
FTSE 100 – Fallers
London Stock Exchange Group (LSEG) 7,854.00p -1.46%
B&M European Value Retail S.A. (DI) (BME) 568.40p -0.84%
Burberry Group (BRBY) 2,055.00p -0.53%
Admiral Group (ADM) 3,131.00p -0.41%
Ocado Group (OCDO) 1,995.00p -0.40%
Rio Tinto (RIO) 5,934.00p -0.25%
Scottish Mortgage Inv Trust (SMT) 1,328.50p -0.19%
Croda International (CRDA) 7,356.00p -0.16%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,682.00p -0.15%
Pearson (PSON) 830.00p 0.00%
FTSE 250 – Risers
FirstGroup (FGP) 87.85p 7.26%
Cineworld Group (CINE) 82.54p 6.59%
Grafton Group Ut (CDI) (GFTU) 1,211.00p 5.58%
LXI Reit (LXI) 140.60p 5.56%
Rank Group (RNK) 177.00p 5.48%
NCC Group (NCC) 310.00p 5.44%
Indivior (INDV) 162.90p 5.37%
WH Smith (SMWH) 1,693.00p 5.25%
IWG (IWG) 315.50p 4.96%
Trainline (TRN) 307.80p 4.84%
FTSE 250 – Fallers
Micro Focus International (MCRO) 466.10p -14.79%
Essentra (ESNT) 297.00p -3.88%
AO World (AO.) 243.80p -3.64%
Moonpig Group (MOON) 417.20p -2.71%
Caledonia Investments (CLDN) 3,125.00p -2.50%
Morrison (Wm) Supermarkets (MRW) 241.00p -2.31%
AJ Bell (AJB) 425.20p -1.98%
Auction Technology Group (ATG) 1,130.00p -1.91%
Liontrust Asset Management (LIO) 1,848.00p -1.70%
Trustpilot Group (TRST) 335.60p -1.70%
