London midday: Stocks in the black ahead of Yellen testimony
London stocks were still a little firmer by midday on Tuesday as investors awaited a testimony on stimulus by incoming US Treasury Secretary Janet Yellen.
The FTSE 100 was up 0.3% at 6,741.67.
CMC Markets analyst David Madden said: "Yellen, the future Treasury Secretary, is tipped to tell politicians the government needs to ‘act big’ as a way to support the economy. Last week, President-elect, Joe Biden announced plans for a $1.9 trillion coronavirus relief package. It includes various schemes to support individuals, government bodies and states.
"It will be Yellen’s task today to explain why such aggressive spending is required to help the economic recovery along. The former head of the Fed will touch on the excessive debt levels that will be racked up because of the stimulus but at the same, borrowing costs are very cheap at the moment. Volatility in stocks is likely to be low in advance of Yellen’s update."
In equity markets, Rolls-Royce rallied following an El Economista report that private equity firms Carlyle, CVC and KKR are among bidders for the engine maker’s ITP Aero business.
HSBC was also on the rise after chairman Mark Tucker said at the Asian Financial Forum on Monday that the bank hopes to resume paying dividends as soon as possible.
Investment platform AJ Bell was boosted by an upgrade to ‘hold’ from ‘sell’ at Berenberg.
Airlines were also up, with British Airways parent IAG and budget carrier easyJet both higher amid expectations that bookings will pick up in the summer thanks to vaccines.
On the downside, electrical retailer AO World slumped despite posting a 67% rise in UK third-quarter revenues, as it highlighted “significantly higher” costs due to the pandemic and said it had seen a slightly increased rate of cancellation of consumers' long-term contracts in mobile and warranties.
IG analyst Chris Beauchamp said investors were likely to be wondering what the next catalyst will be after the 480%+ gain since the beginning of May.
"Today’s statement was full of good news, but even this was not enough to please nervous stockholders, who have hit the ‘sell’ button to lock in profits after the huge rally in the share price," he said.
Drinks maker Britvic fizzed lower after Citi said that a worsening second-quarter outlook was likely to drive consensus downgrades.
Outside the FTSE 350, fashion brand Superdry tumbled after it warned over its ability to continue as a going concern, reporting a widening of its interim losses and a slump in revenue as it took a hit from the pandemic and related store closures.
FTSE 100 - Risers
Smith & Nephew (SN.) 1,612.00p 2.71%
HSBC Holdings (HSBA) 412.35p 2.32%
Pearson (PSON) 681.60p 2.25%
Rolls-Royce Holdings (RR.) 106.55p 2.21%
CRH (CRH) 3,328.00p 2.18%
International Consolidated Airlines Group SA (CDI) (IAG) 163.90p 1.86%
Aveva Group (AVV) 3,840.00p 1.75%
InterContinental Hotels Group (IHG) 4,871.00p 1.73%
Hargreaves Lansdown (HL.) 1,583.50p 1.70%
Berkeley Group Holdings (The) (BKG) 4,541.00p 1.66%
FTSE 100 - Fallers
Next (NXT) 7,874.00p -2.79%
Kingfisher (KGF) 262.80p -2.20%
Standard Chartered (STAN) 480.40p -2.14%
Flutter Entertainment (FLTR) 14,510.00p -1.89%
WPP (WPP) 804.20p -1.78%
Barclays (BARC) 149.12p -1.45%
Halma (HLMA) 2,501.00p -1.34%
Smith (DS) (SMDS) 384.60p -1.28%
Informa (INF) 527.40p -1.24%
Ocado Group (OCDO) 2,546.00p -1.20%
FTSE 250 - Risers
Aston Martin Lagonda Global Holdings (AML) 1,800.00p 5.81%
Indivior (INDV) 126.10p 5.79%
Wizz Air Holdings (WIZZ) 4,536.00p 5.34%
easyJet (EZJ) 857.80p 5.12%
Mitchells & Butlers (MAB) 258.00p 3.82%
Centamin (DI) (CEY) 120.10p 3.36%
Wetherspoon (J.D.) (JDW) 1,174.00p 3.35%
Hochschild Mining (HOC) 198.20p 2.96%
SSP Group (SSPG) 351.60p 2.81%
AJ Bell (AJB) 462.50p 2.66%
FTSE 250 - Fallers
AO World (AO.) 354.00p -6.23%
Britvic (BVIC) 759.00p -3.68%
Premier Foods (PFD) 104.20p -3.52%
Wood Group (John) (WG.) 336.90p -3.47%
Vietnam Enterprise Investments (DI) (VEIL) 600.00p -3.23%
Babcock International Group (BAB) 201.00p -2.09%
Safestore Holdings (SAFE) 796.50p -2.03%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 453.50p -1.95%
Clarkson (CKN) 2,670.00p -1.84%
Trainline (TRN) 419.60p -1.82%