London close: Stocks jump in the wake of G20 trade truce

London's top flight index extended its recent gains on Monday as the pound was hit by weak manufacturing data and sentiment was boosted by the Sino-US trade truce reached over the weekend.

The FTSE 100 was up 0.97% at 7,497.50, trading at its best level in two months, while the pound was down 0.37% against the US dollar at 1.2648 as it emerged that the UK manufacturing sector suffered its worst contraction in more than six years in June, but 0.23% higher versus the euro at 1.1192.

It was a similar story on the second-tier index, which added 0.89% to 19,634.66.

The IHS Markit CIPS purchasing managers’ index came in at 48.0 in June compared 49.4 in May, marking the lowest reading since February 2013, weighed down by a slowing global economy and Brexit uncertainty.

Not only was June the third consecutive month during which the index had fallen, it also significantly undershot forecasts, with most economists looking for around 49.5. A reading below 50 represents contraction.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The PMI now is only trivially higher than the eurozone’s - 47.6 in June - following an eight-month-long period of outperformance. Demand predictably has softened, now that customers have up inventories in case of a no-deal Brexit. The intermediate goods sector has fared the worst, as these products are the most commonly traded across the Channel.

"We’re hopeful, however, that manufacturing output will edge up in the third quarter, given the robust outlook for households’ real incomes, recent positive news on the global trade war and the possibility of another stockpiling boost ahead of the October Brexit deadline."

More broadly, investors were cheering a trade truce between the US and China reached over the weekend.

Chris Beauchamp, chief market analyst at IG, said: "Today’s bounce reinforces the idea that trade wars are the one thing that can really affect this market, which has shrugged off various other crises so far this year. Havens are out of favour, as can be seen by the slump in gold, which is back below $1400 after enjoying an eye-watering bounce, a victim of the stronger dollar seen today.

"The big question is whether the trade truce will have a major bearing on the Fed’s action at its next two meetings – given how much the market was expecting from the FOMC, even a 25bps cut may not be enough to satisfy investors."

In UK equity markets, specialist media platform Future finished higher after it said full-year results would be above expectations, underpinned by acquisitions and good audience growth. The company added that chief financial officer Penny Ladkin-Brand would step down from her role to become chief strategy officer from 1 January 2020. In a brief trading update, Future said the positive trends seen in the first half of the year had continued into the second six months.

Aston Martin also saw its shares rise after Strategic European Investment Group, a subsidiary of Italian private equity firm Investindustrial Advisors, said it was considering buying a 3% stake worth £68m in the luxury car maker.

Market Movers

FTSE 100 (UKX) 7,497.50 0.97%
FTSE 250 (MCX) 19,634.66 0.89%
techMARK (TASX) 3,678.28 0.68%

FTSE 100 - Risers

NMC Health (NMC) 2,518.00p 4.79%
Flutter Entertainment (FLTR) 6,154.00p 4.12%
British American Tobacco (BATS) 2,861.50p 4.09%
Ocado Group (OCDO) 1,210.50p 3.73%
Smurfit Kappa Group (SKG) 2,464.00p 3.44%
Micro Focus International (MCRO) 2,125.50p 2.98%
InterContinental Hotels Group (IHG) 5,318.00p 2.98%
Scottish Mortgage Inv Trust (SMT) 545.50p 2.83%
ITV (ITV) 111.05p 2.78%
Melrose Industries (MRO) 185.40p 2.52%

FTSE 100 - Fallers

Fresnillo (FRES) 852.80p -2.00%
Associated British Foods (ABF) 2,425.00p -1.54%
Vodafone Group (VOD) 127.94p -1.07%
Next (NXT) 5,488.00p -1.01%
Informa (INF) 827.60p -0.98%
International Consolidated Airlines Group SA (CDI) (IAG) 472.30p -0.96%
Reckitt Benckiser Group (RB.) 6,162.00p -0.84%
Just Eat (JE.) 621.20p -0.61%
Croda International (CRDA) 5,095.00p -0.59%
BT Group (BT.A) 195.40p -0.54%

FTSE 250 - Risers

Future (FUTR) 1,036.00p 6.91%
Premier Oil (PMO) 81.94p 6.55%
Drax Group (DRX) 275.00p 5.69%
Metro Bank (MTRO) 554.00p 5.42%
Wood Group (John) (WG.) 476.00p 5.31%
Playtech (PTEC) 447.90p 4.99%
Hunting (HTG) 535.50p 4.90%
Spirent Communications (SPT) 160.00p 4.71%
FDM Group (Holdings) (FDM) 973.00p 4.51%
Mediclinic International (MDC) 318.10p 4.33%

FTSE 250 - Fallers

Funding Circle Holdings (FCH) 163.00p -9.34%
Stagecoach Group (SGC) 117.30p -7.57%
Contour Global (GLO) 181.80p -5.26%
Vivo Energy (VVO) 126.80p -4.37%
Amigo Holdings (AMGO) 191.40p -3.62%
UDG Healthcare Public Limited Company (UDG) 775.00p -3.00%
PayPoint (PAY) 942.00p -2.89%
Domino's Pizza Group (DOM) 270.90p -2.55%
Sophos Group (SOPH) 386.20p -2.15%
Centamin (DI) (CEY) 112.10p -2.01%