London midday: Stocks turn higher as investors mull Rolls-Royce, M&S updates

London stocks had turned a touch higher by midday on Wednesday, with investors sifting through updates from the likes of Rolls-Royce and Marks & Spencer and digesting the latest UK inflation data, as optimism over a potential coronavirus vaccine receded.

The FTSE 100 was up 0.2% at 6,011.13.

Data released earlier by the Office for National Statistics showed UK inflation fell to a near four-year low of 0.8% as energy costs fell and clothing retailers cut prices to shift stock during the coronavirus crisis.

The annual rate of consumer price inflation almost halved from 1.5% between March and April. The reduced rate was the lowest since August 2016 and was slightly below economists' average forecast of 0.9%.

Neil Wilson, chief market analyst at Markets.com, said: "It’s widely accepted that the pandemic is a profoundly deflationary shock to the global economy. No surprise then that UK consumer price inflation slowed to 0.8% in April from 1.5% in March. In fact, the bulk of the decline was due to lower oil prices. Schemes to keep the economy on life support continue to support purchasing power - it may take some months for inflation to bottom as the economy goes through a painful readjustment.

"Input prices for manufacturers declined 5.1%, whilst factory gate prices were 0.7% lower. What comes next is anyone’s guess, but inflation could be round the corner as central banks and governments deal with vast debts."

Meanwhile, hopes of a potential Covid vaccine from US biotechnology company Moderna faded after a Stat report suggested early data was insufficient.

In equity markets, Experian rallied after it left its dividend unchanged as the information services company said the Covid-19 crisis and currency swings could reduce first-quarter revenue by up to 15%.

Rolls-Royce turned higher, having fallen earlier after saying would cut at least 9,000 jobs as part of a plan to save more than £1.3bn a year in response to the pandemic. The engine maker said the job cuts from its global workforce of 52,000 would mainly affect the civil aerospace business and that it would review the division's facilities.

Food and clothing retailer Marks & Spencer was also in the black after saying full-year profits fell by a fifth as it took a £218m hit from the Covid-19 impact and said no dividend would be paid in 2020/21. The company reported pre-tax profits of £67.2m, down 20% including adjusting items of £335.9m, with £212.8m for costs and stock write downs for Covid-19. It

Gambling software company Playtech gained as it said has performed better in the first quarter than it was expecting at the time of its trading update in March, driven by a strong performance from its financials division, TradeTech.

Market Movers

FTSE 100 (UKX) 6,011.13 0.15%
FTSE 250 (MCX) 16,362.78 0.26%
techMARK (TASX) 3,689.80 0.14%

FTSE 100 - Risers

Experian (EXPN) 2,746.00p 8.88%
Ashtead Group (AHT) 2,337.00p 3.36%
Rightmove (RMV) 520.00p 3.34%
DCC (DCC) 6,324.00p 3.33%
Ocado Group (OCDO) 2,015.00p 3.31%
Rolls-Royce Holdings (RR.) 274.10p 2.43%
Smith & Nephew (SN.) 1,644.00p 1.89%
Relx plc (REL) 1,875.50p 1.87%
Intertek Group (ITRK) 4,891.00p 1.73%
Rentokil Initial (RTO) 495.00p 1.64%

FTSE 100 - Fallers

Land Securities Group (LAND) 537.80p -4.34%
Melrose Industries (MRO) 91.54p -4.13%
Berkeley Group Holdings (The) (BKG) 3,931.00p -4.08%
Taylor Wimpey (TW.) 140.35p -3.41%
British Land Company (BLND) 344.00p -3.18%
Whitbread (WTB) 2,854.00p -3.06%
ITV (ITV) 74.20p -3.01%
Persimmon (PSN) 2,134.00p -2.82%
Royal Bank of Scotland Group (RBS) 103.85p -2.63%
Informa (INF) 423.50p -2.51%

FTSE 250 - Risers

Marks & Spencer Group (MKS) 93.90p 9.44%
Playtech (PTEC) 251.80p 9.00%
Hochschild Mining (HOC) 216.00p 8.60%
Hyve Group (HYVE) 15.54p 6.88%
Ninety One (N91) 200.20p 6.66%
William Hill (WMH) 129.55p 6.19%
PureTech Health (PRTC) 248.00p 5.08%
Coats Group (COA) 45.80p 4.69%
Virgin Money UK (VMUK) 80.42p 4.12%
Ferrexpo (FXPO) 161.30p 4.06%

FTSE 250 - Fallers

Micro Focus International (MCRO) 422.40p -6.47%
PPHE Hotel Group Ltd (PPH) 1,055.00p -5.80%
Unite Group (UTG) 744.00p -4.74%
Shaftesbury (SHB) 528.00p -4.52%
Greencore Group (GNC) 134.40p -4.21%
Aston Martin Lagonda Global Holdings (AML) 37.46p -3.95%
TBC Bank Group (TBCG) 731.00p -3.69%
Apax Global Alpha Limited (APAX) 124.00p -3.58%
GCP Student Living (DIGS) 116.40p -3.48%
Frasers Group (FRAS) 266.40p -3.41%