London open: Stocks rise on US stimulus plans; Ashtead surges

London stocks were firmly in the black in early trade on Tuesday despite weak UK jobs data, amid reports US President Donald Trump is considering a $1 trillion infrastructure package and after the Federal Reserve launched a corporate bond-buying programme.

At 0850 BST, the FTSE 100 was up 2.5% at 6,219.03.

Neil Wilson, chief market analyst at Markets.com, said: "The Fed ‘will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds’, the central bank said.

"The Fed is stepping things up after its statement last week left investors more than a little concerned about the pace of recovery. The move suggests that the Fed, as was clear last week, is worried about the economy enduring a protracted downturn. Meanwhile the White House is again said to be mulling a $1tn infrastructure plan to stimulate the economy. The two horsemen of risk sentiment recovery - monetary and fiscal stimulus - riding to the rescue again."

On home shores, the latest figures from the Office for National Statistics showed the number of hours worked in the UK fell at a record pace as an extra 6m people stayed off work during the Covid-19 crisis.

Total weekly hours in the three months to the end of April fell by 94.2m, or 8.9%, to 959.9m a year earlier.

The number of workers on payrolls dropped by more than 600,000 between March and May and job vacancies fell to a record low as the Covid-19 crisis continued to hit the labour market. ONS figures indicated vacancies plunged 60% between March and May. Total pay fell in real terms for the first time since January 2018.

The unemployment rate surprised economists by holding steady at 3.9% versus an average forecast for an increase to 4.5%.

But experts warned the figures showed the government's furlough programme doing its job while delaying the long-term damage once state support for workers' wages ends in October.

Samuel Tombs, a UK specialist at Pantheon Macroeconomics, said the headline rate showed employment held "in suspended animation" by the government's job retention scheme. "The true damage from Covid-19 will emerge in the autumn," he said.

In equity markets, Ashtead shares rocketed to the top of the FTSE 100 after the construction equipment hire firm said fourth-quarter profits had halved but paid a dividend despite the impact of the coronavirus pandemic.

Building materials company CRH was also a high riser, with traders pointing to a potential boost from US infrastructure spending.

Travel stocks IAG, Carnival and easyJet were also up, while housebuilders advanced after heavy losses in the previous session.

Outsourcer Capita racked up strong gains as it said it has been awarded a five-year, €10m contract by Irish Water for the transformation and operation of its customer contact centre services.

Cineworld surged after saying it will reopen its cinemas by 10 July, with social distancing measures in place, while travel company TUI was on the rise after saying it plans to partially restart its Summer 2020 programme.

Market Movers

FTSE 100 (UKX) 6,219.03 2.54%
FTSE 250 (MCX) 17,509.82 2.46%
techMARK (TASX) 3,746.09 2.07%

FTSE 100 - Risers

Ashtead Group (AHT) 2,743.00p 13.49%
CRH (CRH) 2,900.00p 7.73%
International Consolidated Airlines Group SA (CDI) (IAG) 284.60p 7.52%
Carnival (CCL) 1,345.50p 6.83%
Melrose Industries (MRO) 123.20p 6.30%
easyJet (EZJ) 812.20p 5.81%
Ferguson (FERG) 6,348.00p 5.13%
Rolls-Royce Holdings (RR.) 340.00p 5.00%
Persimmon (PSN) 2,379.00p 4.94%
Taylor Wimpey (TW.) 152.85p 4.84%

FTSE 100 - Fallers

Admiral Group (ADM) 2,266.00p -0.48%
Hikma Pharmaceuticals (HIK) 2,365.00p 0.25%
Ocado Group (OCDO) 1,948.50p 0.57%
BAE Systems (BA.) 501.60p 0.72%
Reckitt Benckiser Group (RB.) 7,014.00p 0.92%
Unilever (ULVR) 4,335.00p 1.05%
GlaxoSmithKline (GSK) 1,619.80p 1.19%
Morrison (Wm) Supermarkets (MRW) 184.30p 1.21%
SEGRO (SGRO) 891.00p 1.25%
Severn Trent (SVT) 2,438.00p 1.29%

FTSE 250 - Risers

Capita (CPI) 44.20p 8.23%
Cineworld Group (CINE) 84.66p 7.25%
TUI AG Reg Shs (DI) (TUI) 484.30p 7.12%
Aston Martin Lagonda Global Holdings (AML) 74.10p 6.24%
BlackRock Smaller Companies Trust (BRSC) 1,330.00p 6.23%
Redrow (RDW) 498.00p 6.23%
Wood Group (John) (WG.) 224.00p 6.21%
Investec (INVP) 175.50p 6.01%
4Imprint Group (FOUR) 2,550.00p 5.81%
Elementis (ELM) 72.10p 5.72%

FTSE 250 - Fallers

Apax Global Alpha Limited (APAX) 133.40p -2.63%
Contour Global (GLO) 183.00p -0.87%
NextEnergy Solar Fund Limited Red (NESF) 105.90p -0.47%
Avon Rubber (AVON) 3,065.00p -0.33%
Plus500 Ltd (DI) (PLUS) 1,265.00p -0.20%
Centamin (DI) (CEY) 156.30p -0.03%
Gamesys Group (GYS) 860.00p 0.00%
PureTech Health (PRTC) 240.00p 0.00%
Vivo Energy (VVO) 91.00p 0.00%
Hilton Food Group (HFG) 1,160.00p 0.00%