London close: Stocks finish higher as investors pore through data
Stocks in London finished in the green on Monday, helped by the release of a much better than expected reading on euro area factory activity last month, and similarly upbeat survey results overnight in China.
The FTSE 100 ended the session up 2.29% at 6,032.85, and the FTSE 250 was ahead 1.33% at 17,158.12.
Sterling was mixed against its major trading pairs, with the dollar last down 0.34% at $1.3041, and remaining stable against the euro at €1.1109.
Closer to home, a comparable survey for the UK also pointed to a fast recovery in the sector, but as in the rest of Europe, analysts were concerned that any improvement might lack staying power if joblessness did not follow suit.
"Of course, these surveys can be volatile at the best of times and this is far from that," said Oanda's Craig Erlam.
"The risk of further restrictions and lockdowns will continue to be a huge cloud of uncertainty for many industries but after months of disruption, there may be a sense of relief at this data.
“Whether fears become a reality will depend on how good localised containment efforts turn out to be.”
IHS Markit's UK manufacturing sector Purchasing Managers' Index was revised lower from a preliminary reading of 53.6 for July to 53.3 and against the June reading of 50.1.
Samuel Tombs, Pantheon Macroeconomics' chief UK economist, said the figures showed a "rapid" recovery in the sector but he was concerned by the fact that it partly reflected so-called “pent-up” demand in the wake of the Covid-19 lockdown that "ultimately will fade away by the autumn".
Reports over the weekend of the increasing odds that stricter Covid-19 restrictions could be in the pipeline, both in the UK and the US.
High tensions between Beijing and Washington continued in the background meanwhile, with US Secretary of State Mike Pompeo signalling at the weekend that the Trump administration was set to clamp down on an array of Chinese state-controlled software manufacturers due to national security concerns.
In equity markets, lenders dragged on the FTSE 100, after HSBC posted a 65% drop in interim profits and warned that it was expecting full-year loan losses of between $8bn and $13bn "given the deterioration in consensus economic forecasts and actual loss experience" during the second quarter.
Shares in HSBC closed down 2.91%.
Rolls-Royce was off 0.52%, amid speculation that tighter lockdown restrictions could be on the cards in the US and the UK.
Hargreaves Lansdown on the up by 4.35%, with its shareholders enjoying a good day as the stock was buoyed by data showing heightened interest in the stock market from millennials.
Rio Tinto was 4.13% higher as iron ore futures hit a one-year high during Singapore trading hours, which analysts at SP Angel said were the product of continued stockpiling by Chinese firms, supply worries around Brazil linked to the Covid-19 pandemic in the South American giant and some analysts' forecasts for a small deficit in the market in 2020.
Out on the FTSE 250, Hammerson was down 4.95% after the property developer confirmed that it was in discussions over a possible disposal of its 50% interest in VIA Outlets to its joint venture partner APG, and was also considering an equity raise via a rights issue.
Also moving lower on the back of talk of a possible tightening in Covid-19 restrictions were the likes of Trainline, Mitchells & Butlers, Carnival and National Express, falling 10.32%, 2.61%. 2.98% and 5.28%, respectively.
Shares of insurer Hiscox were also in the red by 3.38%, after swinging to a loss in the first half and setting aside $232m for Covid-19 related claims.
The company reported a pretax loss of $138.9m (£106m) for the six months to the end of June compared with a $168m profit a year earlier, while gross premiums written fell to $2.236bn from $2.338bn.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 27.83p 6.03%
Smurfit Kappa Group (SKG) 2,676.00p 5.35%
NATWEST GROUP PLC ORD 100P (NWG) 111.05p 4.76%
Intertek Group (ITRK) 5,622.00p 4.54%
Aveva Group (AVV) 4,330.00p 4.44%
WPP (WPP) 593.00p 4.40%
Prudential (PRU) 1,154.00p 4.39%
Hargreaves Lansdown (HL.) 1,825.00p 4.35%
Ocado Group (OCDO) 2,140.00p 4.24%
CRH (CRH) 2,881.00p 4.16%
FTSE 100 - Fallers
HSBC Holdings (HSBA) 332.25p -2.91%
BT Group (BT.A) 98.02p -0.57%
International Consolidated Airlines Group SA (CDI) (IAG) 163.85p -0.55%
Rolls-Royce Holdings (RR.) 230.40p -0.52%
Imperial Brands (IMB) 1,272.50p -0.27%
British Land Company (BLND) 365.50p -0.16%
M&G (MNG) 161.30p -0.06%
British American Tobacco (BATS) 2,523.50p -0.04%
Sainsbury (J) (SBRY) 188.00p 0.03%
Taylor Wimpey (TW.) 118.75p 0.34%
FTSE 250 - Risers
XP Power Ltd. (DI) (XPP) 4,320.00p 13.39%
IP Group (IPO) 75.00p 12.18%
Games Workshop Group (GAW) 9,300.00p 5.92%
FDM Group (Holdings) (FDM) 981.00p 5.48%
Kainos Group (KNOS) 1,150.00p 5.45%
Micro Focus International (MCRO) 291.90p 5.34%
Paragon Banking Group (PAG) 330.40p 5.16%
Travis Perkins (TPK) 1,163.50p 4.96%
Kaz Minerals (KAZ) 566.80p 4.85%
William Hill (WMH) 109.25p 4.70%
FTSE 250 - Fallers
Trainline (TRN) 366.80p -10.32%
Equiniti Group (EQN) 117.20p -8.14%
Shaftesbury (SHB) 480.00p -6.52%
Workspace Group (WKP) 575.00p -6.50%
Sabre Insurance Group (SBRE) 285.50p -5.93%
National Express Group (NEX) 143.50p -5.28%
Hammerson (HMSO) 61.00p -4.95%
FirstGroup (FGP) 34.10p -3.40%
Hiscox Limited (DI) (HSX) 755.20p -3.38%
Go-Ahead Group (GOG) 600.00p -3.23%