London midday: Stocks maintain gains after inflation data
London stocks were still firmly in the green by midday on Wednesday as concerns about the coronavirus eased and as investors mulled news that UK inflation hit a six-month high in January.
The FTSE 100 was up 0.5% at 7,439.18 while the pound was down 0.1% against the dollar at 1.2980 and 0.2% versus the euro at 1.2021 after figures from the Office for National Statistics showed that consumer price inflation rose to 1.8% in January from 1.3% the month before.
Economists on average had expected inflation to pick up to 1.6% after falling to a three-year low in December.
"The rise in inflation is largely the result of higher prices at the pump and airfares falling by less than a year ago. In addition, gas and electricity prices were unchanged this month, but fell this time last year due to the introduction of the energy price cap," the ONS's head of inflation Mike Hardie said.
Core inflation rose to 1.6% from 1.4% and was also above the consensus figure of 1.5%.
Capital Economics said: "The rise in CPI inflation for the first time in six months in January was in line with the Bank of England’s expectations, so this is unlikely to move the dial on the outlook for interest rates."
The ONS also reported that house prices rose across the UK for the first time in almost two years. London had its strongest growth since October 2017.
More broadly, investors were taking comfort from news that new cases of the coronavirus in China have fallen.
London Capital Group analyst Jasper Lawler said: "A small decline in the number of coronavirus cases combined with a determination on behalf of the Chinese government to ward off the economic damage is seeing an uplift in market mood.
"We aren’t putting too much stock in the official China figures, which appear to paint a picture rather than reflect reality. But if Beijing ups stimulus measures then those economic effects are real."
In equity markets, Berkeley Group was the standout gainer as HSBC upped its rating on the stock to ‘buy’ and said it now has ‘buy’ ratings on all nine listed housebuilders under coverage. "The decisive general election result has brought the prospect of a final settlement of Brexit closer and unleashed pent-up demand in housing activity that we are forecasting to induce a full year 2020 3% rise in UK-wide new home sales reservations," it said.
Centrica followed close behind after an upgrade at Investec, while hedge fund Man Group was boosted by an upgrade at Exane.
South America-focused miner Hochschild Mining rallied as it said higher precious metals prices helped it to double annual profits. The company said pre-tax profits rose to $76.8m from $38.4m on a 7% increase in revenue to $755.7m.
International Consolidated Airlines Group flew higher as Qatar Airways upped its stake in the British Airways and Iberia parent to 25.1% from 21.4%.
On the downside, shares of NMC Health slumped again after Czech shareholder and activist investor Krupa Global Investments (KGI) said it would not be taking a strategic stake in the UAE healthcare provider. KGI said that following the resignations of founder and non-executive chairman B.R. Shetty and vice chairman Khalifa Butti Omeir Bin Yousef, "the current situation" is not in line with its strategy to take a significant stake in NMC.
Plus500 fell as Canaccord Genuity recommended investors take advantage of recent share price strength and sell the stock.
Elsewhere, Royal Mail was weaker after Liberum reiterated its ‘sell’ recommendation on the stock and slashed the price target to 120p from 175p. It said that management openly questioning the achievability of its 2024 targets just nine months after its strategy launch is "hardly encouraging".
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 5,518.00p 2.91%
Centrica (CNA) 75.78p 2.88%
Polymetal International (POLY) 1,326.50p 2.83%
United Utilities Group (UU.) 1,062.50p 2.51%
Flutter Entertainment (FLTR) 8,824.00p 2.39%
Evraz (EVR) 386.10p 2.36%
Scottish Mortgage Inv Trust (SMT) 653.00p 2.27%
Severn Trent (SVT) 2,707.00p 2.15%
Standard Life Aberdeen (SLA) 328.90p 1.98%
InterContinental Hotels Group (IHG) 5,023.00p 1.91%
FTSE 100 - Fallers
NMC Health (NMC) 805.00p -4.64%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,450.00p -1.32%
Rolls-Royce Holdings (RR.) 669.60p -0.80%
Carnival (CCL) 3,071.00p -0.39%
BT Group (BT.A) 155.40p -0.27%
Whitbread (WTB) 4,769.00p -0.21%
BAE Systems (BA.) 636.40p -0.09%
Tesco (TSCO) 256.30p -0.08%
Admiral Group (ADM) 2,310.00p 0.00%
Meggitt (MGGT) 633.40p 0.03%
FTSE 250 - Risers
Man Group (EMG) 159.70p 7.29%
Hochschild Mining (HOC) 171.50p 6.85%
Centamin (DI) (CEY) 143.45p 4.86%
Fresnillo (FRES) 719.60p 4.59%
Restaurant Group (RTN) 134.40p 3.15%
GVC Holdings (GVC) 847.60p 2.84%
William Hill (WMH) 185.65p 2.77%
Diploma (DPLM) 2,092.00p 2.55%
Sirius Minerals (SXX) 5.22p 2.35%
AJ Bell (AJB) 393.50p 1.94%
FTSE 250 - Fallers
Plus500 Ltd (DI) (PLUS) 822.20p -5.36%
Galliford Try (GFRD) 169.52p -3.41%
Royal Mail (RMG) 173.30p -3.40%
Tullow Oil (TLW) 41.31p -2.80%
Elementis (ELM) 119.30p -1.97%
Bodycote (BOY) 856.00p -1.83%
Foresight Solar Fund Limited (FSFL) 114.50p -1.72%
Aston Martin Lagonda Global Holdings (AML) 423.60p -1.63%
Hyve Group (HYVE) 91.50p -1.61%
FirstGroup (FGP) 131.60p -1.57%