London midday: Stocks edge higher ahead of US ADP report
London stocks had edged higher by midday on Wednesday despite the release of dire UK construction figures, as investors looked ahead to the latest US jobs data.
The FTSE 100 was up 0.5% at 5,881.19.
IG analyst Joshua Mahony said: "Tentative gains throughout Europe have mimicked sentiment in Asia, with traders understandably lacking conviction given the plethora of contradictory drivers which are in play.
"Hopes of a return to relative normality have been boosted by the talk of Disney reopening in Shanghai, signalling a potential future where businesses can operate without the need to await a coronavirus vaccine. Oil prices continue to gain ground in what has been an incredible period of upside for energy prices, bringing crude into levels not seen for over three-weeks.
"While fears remain over the potential breakdown in relations between the US and China, the lack of any evidence that this virus originated from a Wuhan lab highlights the feeling that the accusations will likely evolve into the lesser issue of failing to notify the world quickly enough. On a day that has seen sharp volatility, markets will be keeping a close eye out for today’s ADP payrolls figure as we approach a likely record low non-farm payrolls figure."
On home turf, data showed activity in the construction sector slumped to a record low in April as builders shut sites due to the Covid-19 outbreak.
The Markit/CIPS construction purchasing managers’ index slid to 8.2 from 39.3 in March, coming in well below expectations for a reading of 28.0 and making the lowest level since data was first collected in April 1997. The previous record low was 27.8 in February 2009.
A reading above 50 signals expansion while a reading below indicates contraction.
Around 86% of respondents reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the coronavirus pandemic.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said April’s figures delivered more worrying news for fragile construction businesses as the effects of the coronavirus continued to ripple across supply chains, devastating productivity.
"Though a fall in output was not a complete surprise, the scale and suddenness of the drop has knocked the wind out of building work in the UK," he said. "More vulnerable than other sectors that make up the UK economy, construction was unable to continue in any significant capacity, as companies grappled with furloughed staff and building sites under complete shutdown."
In equity markets, ITV was on the font foot even as the broadcaster reported a slump in April advertising revenues and a drop in total first-quarter revenues as it took a hit from the pandemic.
Online supermarket Ocado rallied as it reported a hefty 40.4% rise in second-quarter retail revenue, but pulled full year guidance as Britons had food supplies delivered during the lockdown. That growth compared to 10.3% in its first quarter.
On the downside, cruise operator Carnival, Premier Inn owner Whitbread, hotel chain InterContinental Hotels and budget airline easyJet were among the worst performers amid worries about the impact of the pandemic.
Market Movers
FTSE 100 (UKX) 5,881.19 0.54%
FTSE 250 (MCX) 16,113.60 0.13%
techMARK (TASX) 3,578.67 0.69%
FTSE 100 - Risers
Evraz (EVR) 267.10p 5.12%
ITV (ITV) 75.60p 4.74%
RSA Insurance Group (RSA) 374.70p 4.69%
M&G (MNG) 128.50p 3.63%
Prudential (PRU) 1,114.00p 3.20%
Smith (DS) (SMDS) 311.30p 3.08%
International Consolidated Airlines Group SA (CDI) (IAG) 201.90p 3.04%
Smith & Nephew (SN.) 1,636.00p 2.93%
Aviva (AV.) 241.60p 2.90%
Glencore (GLEN) 147.36p 2.52%
FTSE 100 - Fallers
Carnival (CCL) 915.60p -4.68%
Whitbread (WTB) 2,730.00p -4.01%
Pearson (PSON) 450.00p -3.20%
easyJet (EZJ) 524.00p -2.42%
Meggitt (MGGT) 257.90p -2.31%
Centrica (CNA) 39.63p -1.86%
InterContinental Hotels Group (IHG) 3,473.00p -1.81%
Fresnillo (FRES) 678.40p -1.57%
Land Securities Group (LAND) 640.00p -1.36%
Royal Bank of Scotland Group (RBS) 111.35p -1.24%
FTSE 250 - Risers
Virgin Money UK (VMUK) 78.98p 10.77%
OneSavings Bank (OSB) 258.20p 6.34%
Kainos Group (KNOS) 735.00p 5.45%
Helios Towers (HTWS) 132.00p 5.10%
Petropavlovsk (POG) 25.00p 5.04%
Direct Line Insurance Group (DLG) 285.50p 5.00%
Hiscox Limited (DI) (HSX) 726.80p 4.97%
Hastings Group Holdings (HSTG) 186.10p 4.90%
St. Modwen Properties (SMP) 374.50p 4.76%
Renishaw (RSW) 3,538.00p 4.74%
FTSE 250 - Fallers
WH Smith (SMWH) 968.50p -10.07%
SSP Group (SSPG) 221.40p -9.63%
Hammerson (HMSO) 55.92p -6.43%
Dixons Carphone (DC.) 69.20p -5.91%
Computacenter (CCC) 1,433.00p -5.04%
Shaftesbury (SHB) 548.00p -4.70%
Pets at Home Group (PETS) 241.40p -4.58%
TUI AG Reg Shs (DI) (TUI) 298.30p -4.57%
Cineworld Group (CINE) 53.38p -4.37%
Bodycote (BOY) 559.00p -3.95%