London midday: Stocks extend gains; Next rallies after lifting guidance

London stocks had extended gains by midday on Wednesday, underpinned by strong performances from the likes of Next and AstraZeneca.

The FTSE 100 was up 0.9% at 7,089.06.

Russ Mould, investment director at AJ Bell, said: "If investing is often about climbing a wall of worry, then market participants arguably face the equivalent of the Matterhorn right now but on Wednesday investors seemed to be undaunted.

"Despite a big sell-off in Asia and the US overnight, with tech stocks leading the way down, the FTSE 100 was off to a solid start.

"The global energy crisis is really just the latest manifestation of a wider shortage of stuff as demand has flooded back in the wake of the pandemic.

"Then you have specific pressure points like the crisis around Chinese property developer Evergrande and the latest in what feels like a series of periodic battles over the debt ceiling in the US.

"Against this uncertain backdrop central banks are having to weigh up inflation risks which, like chewing gum on the sole of a shoe, are proving stickier than they’d hoped.

"To counter the threat posed by rising prices they face the prospect of dialling down economic support at a time of mounting uncertainty over the recovery."

In equity markets, AstraZeneca gained after announcing that its newly-acquired Alexion business will buy the remaining shares of drug maker Caelum Biosciences for up to $500m.

Fashion retailer Next rallied after it raised full-year guidance as it reported a rise in interim profits and sales as stores reopened from Covid pandemic lockdowns. The company forecast pre-tax profit of £800m, up 6.9% from 2019 and £36m ahead of previous guidance of £764m. Full price sales for the rest of the year were expected to be 10% higher from 2019.

On the downside, Upper Crust and Ritazza owner SSP fell after saying sales in the latest week were half of pre-pandemic levels, as it remained cautious on the pace of the recovery. SSP said it was assuming a slightly slower recovery in sales during the 2022 financial year due to uncertainty in the pace of post pandemic recovery. Revenue in the latest week of the year was 53% of 2019 levels.

Royal Mail was under the cosh after a downgrade to ‘sell’ at UBS.

Market Movers

FTSE 100 (UKX) 7,089.06 0.87%
FTSE 250 (MCX) 23,288.98 0.69%
techMARK (TASX) 4,651.78 0.61%

FTSE 100 - Risers

Ferguson (FERG) 10,550.00p 3.08%
Entain (ENT) 2,217.00p 3.07%
Next (NXT) 8,318.00p 2.95%
Ashtead Group (AHT) 5,772.00p 2.92%
AstraZeneca (AZN) 8,712.00p 2.81%
SEGRO (SGRO) 1,230.00p 2.76%
Rentokil Initial (RTO) 586.20p 2.48%
Anglo American (AAL) 2,569.50p 2.13%
Compass Group (CPG) 1,544.50p 2.01%
Rightmove (RMV) 692.40p 2.00%

FTSE 100 - Fallers

Royal Mail (RMG) 447.80p -6.55%
Smith & Nephew (SN.) 1,302.00p -2.22%
Johnson Matthey (JMAT) 2,642.00p -1.45%
Antofagasta (ANTO) 1,354.50p -1.13%
Admiral Group (ADM) 3,148.00p -1.01%
Taylor Wimpey (TW.) 157.60p -0.69%
CRH (CDI) (CRH) 3,521.00p -0.59%
Vodafone Group (VOD) 114.30p -0.59%
BT Group (BT.A) 161.30p -0.59%
Rio Tinto (RIO) 4,750.00p -0.53%

FTSE 250 - Risers

Trustpilot Group (TRST) 360.60p 5.13%
Reach (RCH) 366.00p 4.27%
Darktrace (DARK) 842.50p 3.56%
Auction Technology Group (ATG) 1,336.00p 3.25%
Kainos Group (KNOS) 1,918.00p 2.79%
Grafton Group Ut (CDI) (GFTU) 1,308.00p 2.75%
Future (FUTR) 3,706.00p 2.66%
BH Macro Ltd. GBP Shares (BHMG) 3,610.00p 2.56%
TI Fluid Systems (TIFS) 261.50p 2.55%
Dechra Pharmaceuticals (DPH) 4,844.00p 2.45%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 197.00p -5.29%
SSP Group (SSPG) 274.50p -5.25%
Harbour Energy (HBR) 361.60p -2.80%
Mitchells & Butlers (MAB) 251.60p -1.95%
Syncona Limited NPV (SYNC) 166.40p -1.89%
Greencore Group (CDI) (GNC) 144.10p -1.71%
Micro Focus International (MCRO) 409.30p -1.59%
PureTech Health (PRTC) 345.00p -1.43%
Wood Group (John) (WG.) 226.50p -1.39%
Moonpig Group (MOON) 336.20p -1.23%