London midday: Stocks maintain gains after Next update, manufacturing data

by | Apr 1, 2021

London stocks were still in the black by midday on Thursday, with sentiment underpinned by US President Joe Biden’s $2trn infrastructure plan, a profit upgrade from Next and encouraging manufacturing data.
The FTSE 100 was up 0.6% at 6,755.18, with investors largely shrugging off rising Covid cases in Europe and tighter restrictions in France.

Markets participants were digesting a survey showing that manufacturing growth hit a 10-year high in March thanks to the swift vaccine rollout and the planned easing of lockdown restrictions.

The IHS Markit CIPS manufacturing purchasing managers’ index rose from 55.1 in February to 58.9 in March, its best level since February 2011. A level below 50.0 signals contraction, while a level above indicates expansion.

March saw the fastest output growth since late last year, as inflows of new business from both domestic and overseas markets strengthened. Nevertheless, the manufacturing remained beset by severe supply chain and logistic issues, leading to delivery delays from suppliers and disruption to production and distribution schedules.

Rob Dobson, director at IHS Markit, said: “Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade. Growth of output, order books and employment all gathered momentum and optimism about the year ahead improved further.

“The domestic market remained the prime source of new orders, as companies reported that the vaccine roll-out and clients’ preparations for the loosening of lockdown restrictions underpinned the expansion. Many expect this process to be supportive during the year ahead as well, raising business optimism and jobs growth to their highest levels for seven years.”

In equity markets, travel and leisure-related stocks were on the rise following a Financial Times report that ministers are planning a traffic light system to unlock foreign travel and amid the prospect of easing restrictions at home. British Airways owner IAG, engine maker Rolls-Royce and caterer Compass all pushed higher.

Russ Mould, investment director at AJ Bell, said: “It seems investors are very much of the mind that it is still worth backing companies that will benefit from the reopening of the global economy, despite the negative backdrop of France closing schools in its third lockdown and Brazil still struggling to get Covid under control.

“Next’s results went down well with the market, while catering group Compass was also among the top risers as investors saw better prospects ahead as more people return to offices and education establishments in the near-term and sports and leisure-related demand starts to pick up.

“In backing these companies, investors are effectively looking past any short-term noise and potential setbacks to getting the pandemic under control, and instead looking well into the future and taking the view that earnings will not just start to recover in 2021 but also keep improving thereafter.”

Next rallied after it lifted current year profits guidance as online sales continued to soar during the Covid lockdown, but reported a slump in annual profits, in line with expectations.

Quilter gained after agreeing to sell its international business to life assurance company Utmost for around £483m as it looks to simplify the group and focus on its higher growth UK wealth management business.

Airtel Africa advanced as it said Mastercard will invest $100m in its mobile money business, Airtel Mobile Commerce.

On the downside, Phoenix Group fell as its stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,755.18 0.62%
FTSE 250 (MCX) 21,724.57 0.96%
techMARK (TASX) 4,256.08 0.81%

FTSE 100 – Risers

Melrose Industries (MRO) 174.85p 4.76%
International Consolidated Airlines Group SA (CDI) (IAG) 206.60p 4.19%
London Stock Exchange Group (LSEG) 7,210.00p 3.89%
Weir Group (WEIR) 1,829.50p 2.95%
Rolls-Royce Holdings (RR.) 108.34p 2.89%
Land Securities Group (LAND) 709.60p 2.83%
Hikma Pharmaceuticals (HIK) 2,339.00p 2.77%
Ashtead Group (AHT) 4,443.00p 2.68%
Aveva Group (AVV) 3,513.00p 2.66%
Compass Group (CPG) 1,499.00p 2.57%

FTSE 100 – Fallers

Phoenix Group Holdings (PHNX) 713.00p -2.89%
British American Tobacco (BATS) 2,727.00p -1.69%
Evraz (EVR) 571.40p -1.14%
Standard Chartered (STAN) 495.90p -0.72%
Rio Tinto (RIO) 5,522.00p -0.50%
AstraZeneca (AZN) 7,216.00p -0.43%
GlaxoSmithKline (GSK) 1,283.40p -0.36%
DCC (CDI) (DCC) 6,272.00p -0.29%
Tesco (TSCO) 228.25p -0.26%
Severn Trent (SVT) 2,300.00p -0.26%

FTSE 250 – Risers

Network International Holdings (NETW) 432.90p 4.67%
Quilter (QLT) 166.85p 4.38%
Tullow Oil (TLW) 49.27p 4.36%
Future (FUTR) 1,990.00p 3.97%
Avon Rubber (AVON) 3,282.00p 3.86%
easyJet (EZJ) 1,015.00p 3.76%
TUI AG Reg Shs (DI) (TUI) 379.80p 3.43%
Fidelity China Special Situations (FCSS) 433.00p 3.34%
Cineworld Group (CINE) 99.66p 3.30%
WH Smith (SMWH) 1,856.00p 3.28%

FTSE 250 – Fallers

Royal Mail (RMG) 484.10p -4.06%
Elementis (ELM) 122.60p -2.31%
Mitie Group (MTO) 61.80p -1.75%
Ferrexpo (FXPO) 368.40p -1.66%
Wood Group (John) (WG.) 267.30p -1.22%
Bytes Technology Group (BYIT) 395.60p -0.95%
Murray International Trust (MYI) 1,198.00p -0.83%
Moneysupermarket.com Group (MONY) 264.40p -0.83%
Convatec Group (CTEC) 194.55p -0.79%
Syncona Limited NPV (SYNC) 252.00p -0.79%

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