London midday: Stocks extend gains on US stimulus hopes, falling Covid cases

London stocks had extended gains by midday on Monday as coronavirus cases declined and as investors cheered the prospect of further US stimulus.
The FTSE 100 was up 1.1% at 6,557.18.

Neil Wilson, chief market analyst at Markets.com, said: “The risk-on mood seems to be driven by a combination of falling case numbers in developed countries, whilst efforts by Congressional Democrats to pass Joe Biden’s $1.9tn stimulus without Republican support has delivered a fresh shot of confidence into equity markets.

“Vaccine setbacks – the AstraZeneca version is not so effective against the South African strain – are being largely shrugged off as cases fall.”

In equity markets, miners were the standout gainers, with Anglo American, Antofagasta, BHP and Glencore all higher.

Energy producer Drax gained after saying it was buying Canadian firm Pinnacle Renewable Energy for 11.30 Canadian dollars a share, valuing it at £226m.

Rolls-Royce edged lower on news it is temporarily closing its jet engine factories for two weeks this summer as it moves to save cash amid the coronavirus pandemic.

Experian was in the red after the credit-checking firm said it is carrying out a forensic investigation following media reports of a data breach involving its Serasa business in Brazil, but that there is no evidence its technology systems have been compromised.

Online supermarket Ocado and online electric goods retailer OA World lost ground following a report the UK government is considering a tax raid on companies that have profited from the pandemic.

Neil Wilson said: “This may raise a question about opportunistic tax policy (the government is meant to be pro-business), however most people feel online retailers are not paying their fair share and the burden is falling too much on struggling high street stores.

“It’s never made sense that bricks-and-mortar businesses pay more in tax than the very rivals who are stripping away their market share. A possible tax hike aimed squarely at online sales presents a near-term overhang for these stocks, but they remain structurally well positioned to capture more sales as consumer habits continue to shift online.”

Mike Ashley’s Frasers Group was down after it emerged the company, formerly Sports Direct, sold its entire 24.9% stake in French Connection a day before it announced it was in talks with two potential suitors.

In broker note action, Lloyds was boosted by an upgrade to ‘neutral’ at Goldman Sachs, and budget airline easyJet was knocked lower by a downgrade to ‘sell’ at Stifel.

Just Group was trading up after an initiation at ‘buy ‘at Peel Hunt.

Paper and packaging group Smurfit and DS Smith were lower after downgrades at Bank of America Merrill Lynch, while Mondi was lifted by an upgrade to ‘buy’.

Marks & Spencer was hit by a downgrade to ‘sector perform’ at RBC Capital Markets.

Barratt Developments was weaker after a downgrade to ‘hold’ at Jefferies, while Taylor Wimpey was lifted by an upgrade to ‘buy’.

Weir gained and Flutter Entertainment rallied after upgrades to ‘overweight’ at Morgan Stanley.

Market Movers

FTSE 100 (UKX) 6,557.18 1.05%
FTSE 250 (MCX) 21,070.42 0.02%
techMARK (TASX) 4,143.75 0.72%

FTSE 100 – Risers

Anglo American (AAL) 2,591.50p 4.33%
Evraz (EVR) 522.20p 3.78%
Lloyds Banking Group (LLOY) 38.26p 3.42%
Mondi (MNDI) 1,811.00p 3.28%
Antofagasta (ANTO) 1,529.50p 3.24%
NATWEST GROUP PLC ORD 100P (NWG) 175.80p 3.20%
BHP Group (BHP) 2,105.00p 2.96%
Glencore (GLEN) 266.25p 2.72%
Aveva Group (AVV) 3,720.00p 2.62%
BP (BP.) 258.25p 2.46%

FTSE 100 – Fallers

Informa (INF) 515.20p -1.64%
Fresnillo (FRES) 1,015.00p -1.46%
Smurfit Kappa Group (SKG) 3,572.00p -1.38%
Rolls-Royce Holdings (RR.) 92.84p -1.13%
SSE (SSE) 1,457.50p -0.85%
Experian (EXPN) 2,616.00p -0.80%
Ocado Group (OCDO) 2,786.00p -0.78%
Smith (DS) (SMDS) 369.50p -0.73%
Kingfisher (KGF) 279.10p -0.71%
Whitbread (WTB) 3,257.00p -0.70%

FTSE 250 – Risers

Weir Group (WEIR) 2,010.00p 4.28%
Just Group (JUST) 83.05p 4.27%
Ferrexpo (FXPO) 308.20p 3.63%
BlackRock World Mining Trust (BRWM) 564.00p 3.30%
Lancashire Holdings Limited (LRE) 737.00p 3.29%
Elementis (ELM) 116.20p 2.65%
IP Group (IPO) 107.60p 2.48%
Rotork (ROR) 343.80p 2.26%
Dechra Pharmaceuticals (DPH) 3,700.00p 2.04%
Playtech (PTEC) 486.20p 2.04%

FTSE 250 – Fallers

Syncona Limited NPV (SYNC) 257.00p -4.81%
FirstGroup (FGP) 81.35p -4.18%
AO World (AO.) 321.00p -4.18%
Frasers Group (FRAS) 459.00p -3.89%
Babcock International Group (BAB) 230.30p -3.64%
Big Yellow Group (BYG) 1,114.00p -2.79%
easyJet (EZJ) 805.20p -2.75%
Henderson Smaller Companies Inv Trust (HSL) 1,076.00p -2.71%
Rank Group (RNK) 140.80p -2.49%
Wood Group (John) (WG.) 293.40p -2.46%

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