London midday: Stocks extend gains on Covid vaccine hopes
London stocks had extended gains by midday on Wednesday, with sentiment boosted by hopes of a coronavirus vaccine.
The FTSE 100 was up 1.2% at 6,253.11.
Stocks kicked the session off higher, taking their cue from gains on Wall Street after Moderna reported that its Covid-19 vaccine had produced a ‘robust’ immune response in all of the 45 patients in its early stage human trial.
Equity markets took another leg higher late morning after an unsourced ITV report stated that positive news - possibly on Thursday - was expected from the Oxford coronavirus vaccine backed by AstraZeneca.
The report stated the vaccine was generating the kind of antibody and killer cell response that the researchers were hoping to see.
Investors were also digesting the latest figures from the Office for National Statistics, which showed that Inflation rose for the first time this year in June, although the pickup was caused mainly by volatile computer game prices and economists said the trend was still downwards.
The annual rate of consumer price inflation rose to 0.6% from 0.5% in May, exceeding economists' average forecast of 0.4%.
The main contributor to June's increase was computer games and consoles whose prices rose 1.8% compared with a fall of 4.7% a year earlier. The ONS said the increase could have been caused by a jump in demand during the Covid-19 lockdown, a shortage of consoles or which computer games were in the bestseller charts.
Clothing prices also rose from a year earlier as retailers discounted clothes earlier in the year but food prices fell.
"The inflation rate has increased for the first time this year, but remains low by historical standards," Jonathan Athow, the ONS's deputy national statistician for economic statistics, said.
"Due to the impact of the coronavirus, clothing prices have not followed the usual seasonal pattern this year, with the normal falls due to the start of the summer sales failing to materialise. Prices for computer games and consoles have risen, but food prices, particularly vegetables, have fallen."
In equity markets, British Airways parent IAG was the top gainer, followed closely by 3i.
Homeware retailer Dunelm was also in the black despite warning that annual pre-tax profit was set to fall after stores were shut during the coronavirus lockdown, and reporting a decline in fourth-quarter sales.
On the downside, luxury fashion brand Burberry was sharply lower after saying it expected first half revenue to fall by up to 50% and would restructure further as the coronavirus pandemic continued to have a material impact on sales.
The company said first quarter comparable sales plunged 45% to £257m with stores closed during global lockdowns, although the rate eased to -20% in June with growth in mainline China and Korea ahead of pre-Covid levels.
Burberry expects a decline of 15-20% in second quarter retail revenues, with wholesale revenues down 40-50%. The company said it was in consultation over 150 UK head office jobs and was hoping to redeploy some affected staff to reduce the number of potential redundancies.
Dixons Carphone was under the cosh after it posted a slump in full-year profits, pinning the blame on weakness in the mobile division and store closures due to the coronavirus pandemic.
In the 53 weeks to 2 May, adjusted pre-tax profit fell to £166m from £339m in 2019. This was around £44m below the guidance that Dixons reiterated in January, which it said it was on track to achieve before the Covid-19 outbreak.
However, it was ahead of consensus expectations of £151m.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 218.30p 5.41%
3i Group (III) 872.00p 4.91%
Intertek Group (ITRK) 5,550.00p 4.44%
Aveva Group (AVV) 4,139.00p 4.10%
Ocado Group (OCDO) 2,067.00p 3.95%
Rolls-Royce Holdings (RR.) 267.80p 3.72%
Smiths Group (SMIN) 1,515.00p 3.63%
Fresnillo (FRES) 1,041.00p 3.58%
Ashtead Group (AHT) 2,660.00p 3.46%
Hargreaves Lansdown (HL.) 1,594.50p 3.40%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,466.00p -5.87%
Imperial Brands (IMB) 1,419.50p -1.59%
BT Group (BT.A) 113.80p -1.56%
HSBC Holdings (HSBA) 378.20p -1.45%
Sainsbury (J) (SBRY) 195.25p -1.44%
Vodafone Group (VOD) 125.20p -1.34%
Informa (INF) 417.20p -1.23%
British Land Company (BLND) 373.10p -1.17%
Morrison (Wm) Supermarkets (MRW) 184.75p -1.04%
National Grid (NG.) 870.00p -1.02%
FTSE 250 - Risers
Hochschild Mining (HOC) 209.80p 10.30%
Vesuvius (VSVS) 395.20p 5.67%
Aston Martin Lagonda Global Holdings (AML) 51.35p 5.48%
Carnival (CCL) 999.40p 5.47%
Calisen (CLSN) 187.95p 5.38%
Ultra Electronics Holdings (ULE) 2,068.00p 5.35%
John Laing Group (JLG) 295.00p 5.13%
Cineworld Group (CINE) 55.28p 4.98%
ICG Enterprise Trust (ICGT) 782.00p 4.27%
Oxford Instruments (OXIG) 1,292.00p 4.19%
FTSE 250 - Fallers
Dixons Carphone (DC.) 80.65p -6.76%
AO World (AO.) 137.00p -2.84%
TBC Bank Group (TBCG) 856.00p -2.73%
Bank of Georgia Group (BGEO) 976.00p -2.40%
Marks & Spencer Group (MKS) 96.34p -1.77%
WH Smith (SMWH) 982.00p -1.70%
Hammerson (HMSO) 74.88p -1.65%
National Express Group (NEX) 163.90p -1.62%
TalkTalk Telecom Group (TALK) 78.35p -1.57%
Safestore Holdings (SAFE) 735.50p -1.54%