London midday: Stocks in the red; services PMI in focus
London equity markets had fallen further into the red by midday on Thursday, with ex-dividend stocks a drag as investors awaited fresh catalysts.
The FTSE 100 was down 0.8% at 7,053.27.
Richard Hunter, head of markets at Interactive Investor, said: "One of the drivers of market jitters around inflationary pressures has been bottlenecks in the labour market, and over the next two days the jobless claims number and the non-farm payrolls reading will provide new evidence on the state of the nation.
"The oil price is another driver of concern as there does not seem to be any excessive supply coming on stream for the moment from the major producing countries. The price is ahead by 39% in the year to date, partially driven by an anticipated spike in demand, and the effect of this inevitably puts further upward pressure on prices.
"In the meantime, there has been a cautious move towards defensive stocks as investors position themselves for what could be a volatile couple of trading sessions."
On home shores, a survey released earlier showed growth in the services sector hit a 24-year high in May as coronavirus restrictions eased.
The IHS Markit/CIPS purchasing managers’ index for services rose to 62.9 from 61.0 in April, coming in ahead of the initial estimate of 61.8 and marking the strongest rise in business activity since May 1997.
A reading below 50.0 signals contraction, while a reading above indicates expansion.
The composite PMI, which includes the manufacturing sector, rose to 62.9 in May from 60.7 the month before, coming in above the flash estimate of 62.0. It also marked the steepest rate of expansion since the series began in January 1998.
Tim Moore, economics director at IHS Markit, said: "UK service providers reported the strongest rise in activity for nearly a quarter-century during May as the roll back of pandemic restrictions unleashed pent up business and consumer spending.
"The latest survey results set the scene for an eye-popping rate of UK GDP growth in the second quarter of 2021, led by the reopening of customer-facing parts of the economy after winter lockdowns."
In equity markets, National Grid and B&Q owner Kingfisher slumped as they traded without entitlement to the dividend.
Discount retailer B&M European Value Retail fell after it warned 2022 UK revenues would be lower against tough comparatives as it reported better-than-expected annual profits.
BT was knocked lower by a downgrade to ‘sell’ from ‘hold’ at Deutsche Bank, while Experian lost ground after a downgrade to ‘underperform’ at RBC Capital Markets.
On the upside, Pennon rose as it announced a special dividend and the acquisition of Bristol Water Group.
Chemring advanced after it posted a rise in interim profit and revenue and announced the acquisition of Cubica Group, a Surrey-based research and development company specialising in artificial intelligence, machine learning, data fusion and autonomy.
FTSE 100 - Risers
Johnson Matthey (JMAT) 3,101.00p 0.94%
Pearson (PSON) 837.20p 0.79%
Standard Life Aberdeen (SLA) 275.80p 0.66%
Ferguson (FERG) 9,722.00p 0.64%
Sainsbury (J) (SBRY) 269.50p 0.60%
Phoenix Group Holdings (PHNX) 747.60p 0.48%
Hargreaves Lansdown (HL.) 1,660.50p 0.39%
NATWEST GROUP PLC ORD 100P (NWG) 210.20p 0.29%
Burberry Group (BRBY) 2,187.00p 0.23%
Entain (ENT) 1,689.00p 0.18%
FTSE 100 - Fallers
B&M European Value Retail S.A. (DI) (BME) 535.00p -4.67%
National Grid (NG.) 917.30p -4.51%
International Consolidated Airlines Group SA (CDI) (IAG) 202.10p -3.49%
Kingfisher (KGF) 342.00p -3.34%
BT Group (BT.A) 175.20p -2.88%
Fresnillo (FRES) 887.60p -2.46%
Melrose Industries (MRO) 169.65p -1.94%
Experian (EXPN) 2,682.00p -1.79%
Intertek Group (ITRK) 5,348.00p -1.62%
Mondi (MNDI) 1,911.00p -1.60%
FTSE 250 - Risers
Brewin Dolphin Holdings (BRW) 367.50p 3.81%
Chemring Group (CHG) 318.00p 3.75%
Hiscox Limited (DI) (HSX) 822.00p 3.74%
TI Fluid Systems (TIFS) 324.00p 2.86%
Tullow Oil (TLW) 58.78p 2.73%
Pennon Group (PNN) 1,094.50p 2.43%
Morgan Advanced Materials (MGAM) 350.50p 1.59%
Rathbone Brothers (RAT) 1,854.00p 1.53%
Energean (ENOG) 816.50p 1.49%
Cairn Energy (CNE) 172.50p 1.47%
FTSE 250 - Fallers
Network International Holdings (NETW) 384.20p -4.67%
Avon Rubber (AVON) 2,998.00p -3.73%
easyJet (EZJ) 981.40p -2.88%
Countryside Properties (CSP) 501.50p -2.81%
4Imprint Group (FOUR) 3,030.00p -2.73%
Workspace Group (WKP) 888.50p -2.63%
Hochschild Mining (HOC) 195.20p -2.59%
Pets at Home Group (PETS) 433.20p -2.30%
Plus500 Ltd (DI) (PLUS) 1,468.00p -2.10%
Hill & Smith Holdings (HILS) 1,512.00p -1.95%