London midday: Stocks hold on to early gains

By Alexander Bueso

Stocks in London were holding on to early gains in the first trading session of the year, helped by a drop in sterling and amid optimism around the reopening of the Chinese economy.
As of 0843 GMT, the FTSE 100 was ahead by 1.57% to 7,568.90, alongside a 0.78% decline in cable to 1.1952.

In parallel, the US dollar spot index had shot up by 104.80, reclaiming its 50-week moving average in the process, while cable was off by one percentage point at 1.1925.

Declines in the safe-haven dollar reflect “optimism that the world is healing, that Covid is over, that the war in Ukraine won’t get more hideous and might be resolved, that U.S./Chinese tensions won’t get in the way of a soft landing for the U.S. and that inflation can be brought under control without deep recessions,” analysts at SocGen said, according to Dow Jones Newswires.

Against that backdrop, the day before, survey compiler Caixin reported a decline in its Chinese manufacturing sector Purchasing Managers’ Index from a reading of 49.4 for November to 49.0 in December (consensus: 49.1).

However, a sub-index tracking future output rose from 56.1 to 59.3, which Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said provided a ray of hope.

“In any case, the overall short-term picture for China’s economy is still dark as it struggles with mountains of Covid infections,” he added.

Be that as it may, Asian stocks and currencies were mostly higher overnight.

The news was better at home with S&P Global revising up its UK factory PMI for December from a preliminary reading of 44.7 to 45.3.

Nevertheless, that was still lower than the 46.5 point reading for November and indicated a fifth consecutive month of contraction for the sector.

Still ahead for later in the session was a preliminary reading for German consumer prices at 1300 GMT and S&P Global’s US factory PMI at 1445 GMT.

Not to lose sight of, investors were also expectant ahead of Friday’s monthly US non-farm payrolls report for December and Thursday’s JOLTS labour market survey, also in the US.

In equity news, Ferrexpo owner Kostyantin Zhevago, detained during the previous week by French police, resigned from the company’s board, the iron ore pellet producer and exporter said on Tuesday.

Essential components manufacturer Essentra said on Tuesday that chief executive Paul Forman stood down from the role on 31 December. Forman has been replaced by Scott Fawcett, who took up the role on 1 January.

Budget airline Wizz Air carried 4,180,310 passengers, representing a 58.4% increase compared to December 2021, at a load factor of 84.5%.

Market Movers

FTSE 100 (UKX) 7,553.35 1.36%

FTSE 250 (MCX) 19,128.54 1.46%

FTSE 100 – Risers

Rolls-Royce Holdings (RR.) 98.18p 5.34%
Ocado Group (OCDO) 644.40p 4.47%
International Consolidated Airlines Group SA (CDI) (IAG) 128.90p 4.09%
Prudential (PRU) 1,173.00p 4.04%
CRH (CDI) (CRH) 3,418.50p 3.62%
Persimmon (PSN) 1,260.00p 3.53%
BP (BP.) 490.50p 3.28%
Shell (SHEL) 2,399.00p 3.14%
Barratt Developments (BDEV) 409.10p 3.10%
Whitbread (WTB) 2,644.00p 2.88%

FTSE 100 – Fallers

Abrdn (ABDN) 185.55p -1.96%
Beazley (BEZ) 671.00p -1.25%
SSE (SSE) 1,692.00p -1.17%
Haleon (HLN) 324.80p -0.78%
3i Group (III) 1,334.00p -0.56%
Coca-Cola HBC AG (CDI) (CCH) 1,964.00p -0.46%
Sage Group (SGE) 742.80p -0.38%
Unilever (ULVR) 4,166.50p -0.37%
Centrica (CNA) 96.22p -0.31%
Anglo American (AAL) 3,229.50p -0.22%

FTSE 250 – Risers

Hikma Pharmaceuticals (HIK) 1,653.00p 6.51%
Currys (CURY) 56.60p 5.60%
IP Group (IPO) 58.65p 5.20%
Mitchells & Butlers (MAB) 144.50p 4.71%
TUI AG Reg Shs (DI) (TUI) 140.35p 4.66%
Vietnam Enterprise Investments (DI) (VEIL) 610.00p 4.63%
Target Healthcare Reit Ltd (THRL) 83.90p 4.61%
Genuit Group (GEN) 293.50p 4.45%
Molten Ventures (GROW) 369.40p 4.29%
Moonpig Group (MOON) 115.00p 4.26%

FTSE 250 – Fallers

Renishaw (RSW) 3,586.00p -2.24%
Lancashire Holdings Limited (LRE) 641.00p -1.38%
Clarkson (CKN) 3,200.00p -1.08%
Petershill Partners (PHLL) 167.20p -1.07%
Capricorn Energy (CNE) 259.20p -0.99%
Essentra (ESNT) 235.00p -0.63%
Quilter (QLT) 92.40p -0.56%
AJ Bell (AJB) 356.80p -0.39%
Mediclinic International (MDC) 496.20p -0.36%
Wizz Air Holdings (WIZZ) 1,898.50p -0.32%

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