London stocks were still firmly in the black by midday on Wednesday, with sentiment underpinned by recovery hopes and an encouraging reading on the services sector.
The FTSE 100 was up 0.8% at 6,874.62.
Spreadex analyst Connor Campbell said: “Despite the third wave in Europe, concerns over the AstraZeneca vaccine, and reported worries about an incoming slowdown in the UK’s vaccination programme, yesterday’s IMF growth upgrades have helped keep the markets feeling fresh.”
On the data front, a survey showed the UK services sector returned to growth in March as new orders rose ahead of lockdown easing.
The IHS Markit/CIPS services PMI business activity index increased to 56.3 from 49.5 in February. This was a touch below the flash reading of 56.8 but above the 50.0 level that separates contraction from expansion for the first time since October 2020.
The composite PMI – which measures activity in the services and manufacturing sectors – printed at 56.4 in March, up from 49.6 in February. It was above the 50.0 mark for the first time this year.
Tim Moore, economics director at IHS Markit, said: “UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders. Total business activity increased at the fastest rate since August 2020 and this return to growth ended a four-month sequence of decline.”
In equity markets, Shell edged up even as it said extreme weather in Texas in February was expected to hit first-quarter adjusted earnings by up to $200m.
Hilton Food Group rallied after it said annual profit rose 20% and announced a higher dividend as the food packaging group benefited from households eating at home during the pandemic.
Reopening stocks were also on the rise, with shopping centre owner Hammerson, Upper Crust owner SSP and cruise operator Carnival all higher.
IG analyst Joshua Mahony said: “The prospect of an impending loosening of Covid restrictions has helped boost high-street and services sectors stocks such as Hammerson, Mitchells & Butlers and Restaurant Group, with optimism over the impending economic boost helping to drive stocks higher.
“Questions remain over whether such loosening will ultimately drive us Covid cases, but until we see a change of the current trajectory, markets are increasingly confident that the UK vaccination effort will help enable a substantial economic recovery in the coming months.”
On the downside, Flutter Entertainment lost ground as it confirmed that Fox Corp has filed a suit against it related to its option to buy an 18.6% stake in US sports betting group FanDuel. Traders also pointed to a placing of around 2.3m Flutter shares at £153 each. The placing was linked to Fastball Holdings, with Goldman Sachs acting as bookrunner.
Market Movers
FTSE 100 (UKX) 6,874.62 0.75%
FTSE 250 (MCX) 22,106.00 0.51%
techMARK (TASX) 4,313.80 0.47%
FTSE 100 – Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,132.00p 4.57%
Smith (DS) (SMDS) 424.30p 2.91%
Bunzl (BNZL) 2,389.00p 2.75%
Ocado Group (OCDO) 2,124.00p 2.26%
BP (BP.) 306.60p 2.25%
Taylor Wimpey (TW.) 186.85p 2.19%
M&G (MNG) 218.90p 2.15%
Informa (INF) 582.80p 2.14%
Compass Group (CPG) 1,577.00p 2.10%
Vodafone Group (VOD) 137.32p 2.01%
FTSE 100 – Fallers
London Stock Exchange Group (LSEG) 7,250.00p -1.63%
Flutter Entertainment (CDI) (FLTR) 15,495.00p -1.59%
Entain (ENT) 1,560.00p -1.20%
Weir Group (WEIR) 1,818.50p -1.20%
Renishaw (RSW) 6,460.00p -1.00%
Spirax-Sarco Engineering (SPX) 11,625.00p -0.98%
Polymetal International (POLY) 1,425.50p -0.83%
Avast (AVST) 461.00p -0.77%
Schroders (SDR) 3,553.00p -0.53%
AstraZeneca (AZN) 7,146.00p -0.52%
FTSE 250 – Risers
Provident Financial (PFG) 238.20p 6.15%
Hammerson (HMSO) 37.66p 5.94%
Babcock International Group (BAB) 240.10p 5.12%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,132.00p 4.57%
SSP Group (SSPG) 339.20p 4.43%
Wood Group (John) (WG.) 275.80p 4.08%
Carnival (CCL) 1,775.20p 4.00%
Rank Group (RNK) 204.50p 3.60%
Micro Focus International (MCRO) 560.00p 3.09%
Aston Martin Lagonda Global Holdings (AML) 2,001.00p 2.56%
FTSE 250 – Fallers
Tullow Oil (TLW) 48.88p -2.16%
Beazley (BEZ) 340.50p -2.10%
Kainos Group (KNOS) 1,561.00p -1.82%
Premier Foods (PFD) 97.90p -1.71%
TBC Bank Group (TBCG) 1,050.00p -1.50%
Pets at Home Group (PETS) 427.00p -1.39%
Mitie Group (MTO) 64.40p -1.38%
CMC Markets (CMCX) 520.00p -1.33%
Caledonia Investments (CLDN) 2,650.00p -1.30%
Hipgnosis Songs Fund Limited NPV (SONG) 122.20p -1.29%
