London midday: Stocks slightly higher as risk appetite sentiment stabilises

Stocks are holding modestly higher come midday despite the drag on investor sentiment due to the rising numbers of Covid-19 infections outside of Europe, particularly in Japan and India.

Helping to offset the drag from the pandemic was a slightly lower-than-expected CPI print in the UK.

"Covid cases globally increased by 12% throughout the past week, primarily due to a resurgence in India, Pakistan and South America. Japan's numbers are also being watched closely," said Sophie Griffiths, Market Analyst, UK & EMEA, OANDA.

"Fears over the impact that rising Covid cases could have on global economic recovery hit risk appetite hard on Tuesday. Travel restrictions will likely act as a brake on the recovery. The markets' performance yesterday served as a stark reminder that we still can't draw a line under Covid risk."

At noon, the FTSE 100 was bouncing back by 0.40% to 6,887.42, alongside a gain of 0.1% to 22,131.76 for the second-tier index.

In parallel, futures tracking the S&P 500 were 1.5 points higher to 4,128.0.

Overnight, Japan's Nikkei-225 lost 2.03% to 28,508.55, but India's Sensex dipped just 0.51% to 47,705.8 and the Shanghai Stock Exchange's composite index was flat at 3,604.14.

According to reports, local authorities in Osaka and Tokyo, Japan's two largest economic hubs, were moving closer to imposing lockdowns.

Meanwhile, the latest wave of Covid-19 infections in India was being described by some as "out of control".

On home shores, the Office for National Statistics reported a year-on-year rate of increase in headline consumer prices in the UK accelerated from 0.4% in February to 0.7% for March, undershooting the consensus estimate of 0.8%.

Core CPI however did hit the consensus projection for a rise of 1.1%, which was up from 0.9% in the month before.

Commenting on Wednesdays CPI release, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, predicted that CPI would rise past the Bank of England's 2.0% target "only briefly", arguing that rate-setters shouldn't flinch and anticipating little pressure to raise rates before 2023.

Worth noting, Reuters published the contents of the US Federal Reserve chairman's written response, dated 8 April, to a US Senator.

In that missive, Jerome Powell said the Fed does "not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period."

No major economic reports are scheduled for release in the UK or US on Wednesday.

Also impacting on trading, on Tuesday night, US media giant Netflix posted lower-than-expected earnings per share and revenues for its first quarter.

Critically, it also reported just 3.98m new subscriber adds (consensus: 6.0m) and guided towards just 1.0m adds for the second quarter (consensus: 4.4m) as the pandemic ebbs.

Miner BHP confident

BHP said it was ready to finish the year strongly as the miner reported record production at its Western Australia iron ore business in the first nine months. The company left annual production guidance for iron ore and petroleum unchanged but reduced guidance for metallurgical coal and energy coal, partly due to wet weather.

Hikma Pharmaceuticals has resumed the launch of its generic version of GlaxoSmithKline's ‘Advair Diskus’ in the United States, it announced on Wednesday, following Fod and Drug Administration (FDA) approval of an amendment to its Abbreviated New Drug Application in January. The FTSE 100 pharmaceuticals maker said the amendment reflected enhanced packaging controls to meet new industry standards adopted since its initial submission. It said it would immediately resume launch activities of its generic product.

Distribution specialist Bunzl reported a rise in first quarter revenue driven by demand for Covid-related products, but warned of a slight slowdown in the second half as it maintained full year guidance. The company said group revenue in the first quarter was up 5.4% at actual exchange rates, with acquisitions contributing revenue growth of 4.3%. Bunzl expected “robust” revenue growth in 2021 after excluding larger Covid-19 related orders which contributed approximately £550m last year.

Contracts-for-difference trading platform Plus500 has made its first foray into the US market after buying Cunningham Commodities and Cunningham Trading Systems for $30m. The deal, which “brings with it a scarce and valuable license” to operate US markets, will be funded from Plus500's existing cash balances, the company said on Wednesday, adding that some of the cash would be held in escrow for two years from completion for retention purposes.

Telecommunications and mobile money provider Airtel Africa announced the signing of a new $500m (£359.35m) loan facility with a group of relationship banks. The FTSE 250 company said the new committed facility consisted of a combination of a revolving credit facility and term loans, with tenor of up to four years. It said the facility would be used to partially refinance its €750m (£647.14m) euro-denominated bond due 20 May.

Market Movers

FTSE 100 (UKX) 6,887.42 0.40%
FTSE 250 (MCX) 22,131.76 0.10%
techMARK (TASX) 4,319.63 0.46%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 2,442.00p 2.69%
Admiral Group (ADM) 3,220.00p 2.48%
International Consolidated Airlines Group SA (CDI) (IAG) 197.68p 2.37%
Next (NXT) 7,940.00p 1.87%
Burberry Group (BRBY) 2,042.00p 1.85%
Entain (ENT) 1,656.50p 1.81%
Evraz (EVR) 618.40p 1.71%
JD Sports Fashion (JD.) 895.60p 1.63%
Smith & Nephew (SN.) 1,437.00p 1.63%
Intermediate Capital Group (ICP) 2,001.00p 1.63%

FTSE 100 - Fallers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,630.00p -3.78%
Weir Group (WEIR) 1,892.50p -2.85%
Bunzl (BNZL) 2,439.00p -2.60%
Ocado Group (OCDO) 2,139.00p -1.79%
B&M European Value Retail S.A. (DI) (BME) 559.20p -1.65%
United Utilities Group (UU.) 961.60p -1.25%
Auto Trader Group (AUTO) 565.60p -1.08%
Kingfisher (KGF) 357.40p -0.75%
Severn Trent (SVT) 2,443.00p -0.73%
Rentokil Initial (RTO) 512.80p -0.70%

FTSE 250 - Risers

Synthomer (SYNT) 499.20p 3.65%
Restaurant Group (RTN) 124.60p 3.49%
easyJet (EZJ) 966.80p 3.45%
Crest Nicholson Holdings (CRST) 414.40p 2.98%
Carnival (CCL) 1,575.60p 2.90%
Vectura Group (VEC) 114.80p 2.87%
Hammerson (HMSO) 37.26p 2.67%
SSP Group (SSPG) 319.20p 2.67%
Indivior (INDV) 138.60p 2.67%
Frasers Group (FRAS) 507.00p 2.59%

FTSE 250 - Fallers

Elementis (ELM) 127.70p -4.91%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,630.00p -3.78%
IntegraFin Holding (IHP) 553.50p -2.21%
Aston Martin Lagonda Global Holdings (AML) 1,858.50p -1.95%
Ultra Electronics Holdings (ULE) 1,985.00p -1.73%
Jupiter Fund Management (JUP) 266.40p -1.70%
Serco Group (SRP) 139.70p -1.62%
Micro Focus International (MCRO) 510.60p -1.50%
GCP Student Living (DIGS) 174.60p -1.47%
Chemring Group (CHG) 273.50p -1.44%