London midday: Stocks just in the black ahead of US inflation data
London stocks were just in the black by midday on Friday as investors welcomed news of a bipartisan agreement on an infrastructure deal in the US, but erred on the side of caution ahead of inflation data from across the pond.
The FTSE 100 was up 0.1% at 7,118.89.
Jeffrey Halley, senior market analyst at Oanda, said: "A bipartisan group of Senators presented an acceptable, but much slimmed-down infrastructure agreement to the President that will still total around $1.2 trillion over the next eight years.
"That will still pay for a lot of Bobs to build ‘stuff’ to move people around in the US, stay connected on the internet and keep lights and heating on. However, challenges remain with the additional $1.8 trillion of social spending plans and proposed tax increases on the wealthy and corporations still stuck in a deep freeze. Mr Biden and Ms Pelosi expect those bills to progress along with the infrastructure as part of a greater overall package."
On home shores, a survey released earlier by the Confederation of British Industry showed that retail sales rose in June as the vaccination programme boosted consumer confidence.
The CBI’s measure of the volume of sales increase to +25 from +18 in May, hitting its best level since August 2018. The balance is the difference between the number of retailers who report higher sales and those who report lower sales.
CBI principal economist Ben Jones said: "After a generally gloomy 2021 so far, the sun finally shone for retailers in June, with seasonal sales volumes the strongest since November 2016.
"This was the latest sign that the success of the vaccination programme is feeding through to stronger consumer confidence which, along with the re-opening of hospitality, is encouraging shoppers back onto the streets."
However, he also cautioned that the sector remains a long way from a full recovery.
Looking ahead to the rest of the day, investors were eyeing the release of US inflation data for May at 1330 BST.
Neil Wilson, chief market analyst at Markets.com, said: "The big release today is the core PCE inflation print - the Fed’s preferred gauge of inflation. The core PCE deflator is expected at 3.4% year-on-year, up from 3.1% the month before, though the month-on-month is expected to slow to 0.6% from 0.7% the previous month.
"As before, it’s the month-on-month numbers that really count and tell us whether it’s as transitory as the Fed is telling us. Fed speakers on the roster today to jawbone any hot inflation reading include Kashkari, Mester, Rosengren and Williams."
In equity markets, JD Sports was the standout gainer on the FTSE 100 following well-received fourth-quarter results from Nike in the US.
Irish building materials group CRH and equipment rental firm Ashtead, both of which do business in the US, rallied on news of the infrastructure deal. Ashtead and CRH were also lifted by positive broker notes.
Credit Suisse hiked its price target on outperform-rated Ashtead to 6,000p from 4,100p, "to reflect, primarily, higher long-term growth opportunity” given the company’s “positioning in attractive end markets". Meanwhile, Berenberg upped CRH to ‘buy’ from ‘hold’.
Advertising agency WPP was also on the rise after an upgrade to ‘neutral’ from ‘underperform’ at Credit Suisse.
Elsewhere, UDG Healthcare was a little firmer after it said US private equity firm Clayton Dubilier & Rice was considering an improved final offer of 1,080p a share for the company.
Travel-related stocks were in the red following disappointment over the government’s travel guidelines. On Thursday, 16 destinations were added to the travel green list, including the Balearic Islands, Madeira, Malta and Barbados. The government also added the Dominican Republic, Eritrea, Haiti, Mongolia, Tunisia and Uganda to its red list.
British Airways owner IAG, InterContinental Hotels, Premier Inn owner Whitbread, engine maker Rolls-Royce, Upper Crust owner SSP, cruise operator Carnival and travel company Tui were all weaker.
FTSE 100 - Risers
JD Sports Fashion (JD.) 941.60p 3.18%
CRH (CDI) (CRH) 3,798.00p 2.98%
WPP (WPP) 998.60p 1.94%
DCC (CDI) (DCC) 5,998.00p 1.94%
Ashtead Group (AHT) 5,400.00p 1.89%
BHP Group (BHP) 2,151.50p 1.73%
Smurfit Kappa Group (CDI) (SKG) 3,959.00p 1.54%
Antofagasta (ANTO) 1,457.50p 1.36%
ITV (ITV) 128.50p 1.18%
BP (BP.) 327.95p 1.13%
FTSE 100 - Fallers
Flutter Entertainment (CDI) (FLTR) 13,960.00p -2.85%
Whitbread (WTB) 3,171.00p -2.43%
M&G (MNG) 235.90p -2.16%
InterContinental Hotels Group (IHG) 4,935.00p -2.12%
Entain (ENT) 1,809.00p -2.11%
Rolls-Royce Holdings (RR.) 106.16p -1.50%
Persimmon (PSN) 2,917.00p -1.32%
Berkeley Group Holdings (The) (BKG) 4,608.00p -1.31%
Royal Mail (RMG) 581.40p -1.29%
International Consolidated Airlines Group SA (CDI) (IAG) 190.14p -1.06%
FTSE 250 - Risers
Wood Group (John) (WG.) 220.00p 6.49%
Micro Focus International (MCRO) 542.40p 3.71%
Liontrust Asset Management (LIO) 1,748.00p 3.19%
Auction Technology Group (ATG) 1,196.00p 3.10%
Dr. Martens (DOCS) 427.80p 2.44%
Virgin Money UK (VMUK) 202.00p 2.38%
Hochschild Mining (HOC) 158.40p 2.33%
Chrysalis Investments Limited NPV (CHRY) 260.00p 1.96%
TP Icap Group (TCAP) 204.05p 1.77%
Greggs (GRG) 2,562.00p 1.67%
FTSE 250 - Fallers
Crest Nicholson Holdings (CRST) 410.80p -5.61%
888 Holdings (888) 381.80p -4.21%
Countryside Properties (CSP) 480.20p -2.83%
SSP Group (SSPG) 290.20p -2.65%
Carnival (CCL) 1,654.80p -2.39%
Restaurant Group (RTN) 127.20p -1.85%
Drax Group (DRX) 421.80p -1.82%
Meggitt (MGGT) 462.00p -1.79%
Genuit Group (GEN) 608.00p -1.62%
Spectris (SXS) 3,202.00p -1.57%