London midday: FTSE 100 trades above 7,000 amid recovery hopes

London stocks were in the black by midday on Friday, with the FTSE 100 trading above 7,000 for the first time since February 2020 as investors mulled encouraging Chinese growth figures.

The top-flight index was up 0.7% at 7,033.32, with sentiment underpinned not just by the Chinese data, but also by Thursday's solid US retail sales and jobless claims numbers.

Russ Mould, investment director at AJ Bell, said the index breaching 7,000 "represents a massive milestone in recovering from the terrible pandemic and shows how investors’ confidence has completely changed since just over a year ago".

"The market was understandably shocked as the coronavirus gripped the world but in true investor style it has quickly focused on the future and the ability for corporate earnings to recover."

Figures released earlier by the National Bureau of Statistics showed China’s economy bounced back from the pandemic in the first quarter.

GDP growth jumped to a record 18.3% in the first quarter from 6.5% in the final quarter of last year. The figures came in below expectations for 18.5% growth but marked the best year-on-year growth since records began in 1992.

On a quarter-on-quarter basis, growth was 0.6% in the first quarter, down from an upwardly revised 3.2% in the fourth quarter of 2020 and below consensus expectations of 1.4% growth.

"The national economy made a good start," the NBS said. However, it cautioned: "We must be aware that the Covid-19 epidemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities."

Other figures from the NBS showed that retail spending rose 34.2% in March, up from 33.8% in February and above consensus expectations of a 28% increase.

Industrial production growth slowed to 14.1% in March from 35.1% in February, coming in below expectations of 18.0%. Meanwhile, fixed asset investment growth slowed to 25.6% in March from 35% the month before and versus consensus of 26% growth.

In equity markets, telecoms company BT was the standout gainer on the FTSE 100 after JPMorgan Cazenove said the downgrade cycle is finally behind us and that Openreach is the key to a "major" re-rating.

Miners were among the top performers after the Chinese data, with Antofagasta and Anglo American both up.

Online supermarket Ocado rose after saying it was investing £10m in Oxbotica, an autonomous vehicle software company, and has set up a commercial partnership to develop self-driving vehicles.

WHSmith was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets, but Dixons Carphone was knocked lower by a downgrade to ‘sector perform’ by the same outfit.

RBC said WHSmith's international markets are providing an encouraging precedent for a recovery in UK travel demand and that its relative position should strengthen after the pandemic.

Kainos slumped even as the IT provider said results for the year to the end of March 2021 are set to be at the upper end of consensus after the momentum outlined in its trading update in January was maintained.

Shore Capital said: "In the absence of a further upgrade today, and after the strong run up the shares had of late, there may be a ‘pause for breath’ moment at this juncture with the potential for some downside pressure (better to travel than to arrive?)."

TI Fluid Systems slid after its largest shareholder, Bain Capital, and outgoing chief executive Bill Kozyra placed 52.4m shares in the company in an accelerated bookbuild to institutional investors. The shares were placed at 280p each, versus Thursday’s closing price of 308p. Bain placed 52m, while Kozyra placed the rest.

Market Movers

FTSE 100 (UKX) 7,033.32 0.71%
FTSE 250 (MCX) 22,559.49 0.39%
techMARK (TASX) 4,383.00 0.32%

FTSE 100 - Risers

BT Group (BT.A) 154.70p 2.76%
Anglo American (AAL) 3,229.00p 2.52%
Barclays (BARC) 189.04p 2.38%
International Consolidated Airlines Group SA (CDI) (IAG) 211.80p 2.34%
NATWEST GROUP PLC ORD 100P (NWG) 198.50p 2.19%
Lloyds Banking Group (LLOY) 43.72p 2.13%
Evraz (EVR) 627.00p 2.12%
Experian (EXPN) 2,721.00p 2.06%
Standard Chartered (STAN) 496.30p 1.99%
Ocado Group (OCDO) 2,182.00p 1.91%

FTSE 100 - Fallers

Aveva Group (AVV) 3,757.00p -2.19%
London Stock Exchange Group (LSEG) 7,786.00p -1.44%
United Utilities Group (UU.) 955.00p -1.18%
Intermediate Capital Group (ICP) 2,027.00p -1.12%
Barratt Developments (BDEV) 787.20p -0.96%
Hikma Pharmaceuticals (HIK) 2,386.00p -0.91%
Admiral Group (ADM) 3,183.00p -0.75%
Severn Trent (SVT) 2,427.00p -0.61%
Rightmove (RMV) 614.60p -0.55%
Associated British Foods (ABF) 2,446.00p -0.53%

FTSE 250 - Risers

WH Smith (SMWH) 1,902.00p 3.74%
Petropavlovsk (POG) 25.92p 3.35%
Redde Northgate (REDD) 355.50p 3.04%
easyJet (EZJ) 1,017.00p 2.73%
Babcock International Group (BAB) 315.80p 2.63%
Elementis (ELM) 136.30p 2.56%
Virgin Money UK (VMUK) 195.05p 2.50%
Caledonia Investments (CLDN) 2,975.00p 2.41%
Dr. Martens (DOCS) 494.30p 2.21%
Capita (CPI) 44.96p 2.07%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 290.00p -5.84%
Kainos Group (KNOS) 1,640.00p -3.36%
AO World (AO.) 314.40p -2.84%
ICG Enterprise Trust (ICGT) 1,034.00p -2.45%
Clarkson (CKN) 2,830.00p -2.41%
Grafton Group Ut (CDI) (GFTU) 1,079.00p -1.91%
C&C Group (CDI) (CCR) 285.20p -1.59%
Herald Investment Trust (HRI) 2,310.00p -1.28%
Future (FUTR) 2,318.00p -1.28%
National Express Group (NEX) 320.80p -1.23%