|CATEGORY: MARKET REPORT - MIDDAY
Thu 01 Jun 2023
LONDON (SHARECAST) - (Sharecast News) - London stocks were still firmer by midday on Thursday, after the US House of Representatives overwhelmingly passed the debt ceiling bill agreed last weekend, and as investors mulled encouraging Chinese data.
The FTSE 100 was up 0.4% at 7,478.86.
The bill still needs to get through the Senate and be signed by President Joe Biden ahead of the deadline to avert debt default.
Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started the day on the front foot as the US debt ceiling deal was approved by the House of Representatives, virtually guaranteeing it will be signed off ahead of the extended 5 June deadline.
"This positive driver for stocks may not last as a US Treasury which has been draining its account at the Federal Reserve to keep the government going, thereby injecting significant liquidity into the system, reverses this policy and starts tapping the debt markets to bolster its coffers.
"For now, though, relief that a US default has been averted is dominating market sentiment."
Investors were also digesting the latest data out of China, which showed that factory activity unexpectedly jumped to growth in May as demand and production improved.
The Caixin/S&P Global manufacturing purchasing managers' index (PMI) rose to 50.9 in May from 49.5 in April, beating consensus expectations of 49.5.
A reading above 50 indicates growth. The print is a sharp contrast to an official PMI released on Wednesday that showed a fall in factory activity, suggesting that China's recovery was stalling.
On home shores, a survey showed the downturn in the manufacturing sector deepened in May.
The S&P Global/CIPS PMI fell to a four-month low of 47.1 from 47.8 in April, but was above the flash estimate of 46.9.
The survey found that manufacturers were hit by weak domestic market sentiment, lower new export order intakes and client destocking, which offset the tapering benefits from improving supply chains.
New export orders fell for the sixteenth consecutive month in May, as overseas demand for UK manufactured products remained lacklustre.
On the upside, however, average input prices fell for the first time in three-and-a-half years.
Rob Dobson, director at S&P Global Market Intelligence, said: "Manufacturers are finding that any potential boost to production from improving supply chains is being completely negated by weak demand, client destocking and a general shift in spending in the UK away from goods to services.
"These factors are also driving a broad decrease in demand from overseas amid reports of lost orders from the US and mainland Europe. The retrenchment in export demand is also being exacerbated by some EU clients switching to more local sourcing to avoid post-Brexit trade complications."
The latest survey from Nationwide was also in focus, as it showed that house prices fell in May and looked set to decline further amid rising mortgage rates.
In equity markets, bootmaker Dr Martens tumbled as it said it expects lower core margins in 2024 after extra costs caused by errors at its Los Angeles distribution centre and extra investment spending. Pre-tax profit for the year to March fell 26% to £159.m. Revenue jumped 10% to hit £1bn for the first time.
Auto Trader lost ground as it posted a dip in full-year pre-tax profits.
National Grid, Severn Trent, Sage, Keller, Marshalls and Great Portland all fell as they traded without entitlement to the dividend.
Pennon reversed earlier losses despite saying it swung to a full-year loss as higher costs and the long hot summer weighed heavily.
Convatec was a high riser after an upgrade to 'overweight' at Morgan Stanley.
FTSE 100 (UKX) 7,478.86 0.44%
FTSE 250 (MCX) 18,841.98 0.64%
techMARK (TASX) 4,561.95 0.21%
FTSE 100 - Risers
Fresnillo (FRES) 672.40p 3.77%
Convatec Group (CTEC) 209.80p 3.45%
B&M European Value Retail S.A. (DI) (BME) 526.20p 3.22%
Melrose Industries (MRO) 483.00p 2.42%
InterContinental Hotels Group (IHG) 5,374.00p 2.01%
Relx plc (REL) 2,558.00p 1.91%
Prudential (PRU) 1,075.00p 1.80%
International Consolidated Airlines Group SA (CDI) (IAG) 157.00p 1.68%
Antofagasta (ANTO) 1,360.00p 1.68%
Beazley (BEZ) 615.50p 1.65%
FTSE 100 - Fallers
National Grid (NG.) 1,063.50p -3.84%
Auto Trader Group (AUTO) 608.80p -3.37%
Severn Trent (SVT) 2,711.00p -2.24%
Ocado Group (OCDO) 360.90p -2.20%
3i Group (III) 1,934.00p -1.10%
Admiral Group (ADM) 2,309.00p -0.69%
Coca-Cola HBC AG (CDI) (CCH) 2,372.00p -0.67%
London Stock Exchange Group (LSEG) 8,494.00p -0.65%
Sage Group (SGE) 865.60p -0.62%
Pershing Square Holdings Ltd NPV (PSH) 2,732.00p -0.58%
FTSE 250 - Risers
Liontrust Asset Management (LIO) 792.00p 4.97%
Investec (INVP) 427.10p 4.43%
Dechra Pharmaceuticals (DPH) 3,486.00p 4.37%
Future (FUTR) 749.00p 3.74%
Trainline (TRN) 253.00p 3.35%
Bridgepoint Group (Reg S) (BPT) 221.00p 3.08%
Drax Group (DRX) 569.40p 2.89%
TBC Bank Group (TBCG) 2,360.00p 2.61%
Vistry Group (VTY) 741.50p 2.56%
W.A.G Payment Solutions (WPS) 96.80p 2.54%
FTSE 250 - Fallers
Dr. Martens (DOCS) 138.80p -11.20%
Hilton Food Group (HFG) 702.00p -3.70%
Aston Martin Lagonda Global Holdings (AML) 273.80p -3.59%
Ithaca Energy (ITH) 139.50p -3.26%
Auction Technology Group (ATG) 747.00p -2.99%
Marshalls (MSLH) 294.20p -2.90%
Tullow Oil (TLW) 24.12p -2.90%
Hunting (HTG) 214.50p -2.05%
ASOS (ASC) 336.50p -1.98%
Keller Group (KLR) 666.00p -1.91%