London midday: Stocks rally as commodities, deal news provide a boost
London stocks were firmly in the black by midday on Friday, with the top-flight index hitting a new post-pandemic high as deal news and strong commodity prices provided a boost ahead of the latest US non-farm payrolls report.
The FTSE 100 was up 0.8% at 7,129.63.
IG market analyst Joshua Mahony said: "European markets are looking to close out the week in positive fashion, with the FTSE 100 overcoming the 7100 mark for the first time in 14 months.
"US markets helped lay the ground for today’s European gains, with a welcome decline in jobless claims helping to lift spirits ahead of today’s jobs report. Doubts over whether last month’s payrolls figure of 916k was merely a temporary response to Joe Biden’s $1.9 trillion stimulus package will be answered today, with markets looking for another lofty number.
"Rising ADP payrolls and continued declines in the jobless claims figure does provide the basis for a possible push towards the one-million mark for today’s NFP number."
The payrolls report is due at 1330 BST, along with the unemployment rate and average earnings.
On home shores, a survey showed construction output rose strongly in April as Covid-19 restrictions eased but costs increased at the fastest pace for at least 24 years.
The IHS Markit/CIPS UK construction purchasing managers' index recorded a score of 61.6 in April, broadly in line with a six-year peak established in March. A reading of 50 or more indicates growth.
Commercial work was the best-performing category in April as the economy reopened and clients' confidence grew. Housebuilding rose strongly but at a weaker rate than in March but civil engineering had its fastest pace of recovery since September 2014 as work on big infrastructure projects continued.
In equity markets, miners were high risers as metals price advanced, with Anglo American, Glencore and Rio all firmer. Neil Wilson, chief market analyst at Markets.com, said: "A monster commodity rally continues as the global economy heats up, and massive but messy rotation out of the tech/growth/momentum plays into more cyclical/value parts of the market.
"Copper rallied to an all-time high, aluminium is extending gains. Palm oil 13-year high, iron ore and steel at all-time highs. There is yet room to run higher in the commodity space."
Elsewhere, deal news was helping the lift the mood.
St Modwen Properties surged after US private equity firm Blackstone made a possible cash offer for the group at 542p a share.
Meggitt also jumped following a report that US-based Woodward could be looking to buy the London-listed aerospace engineer. According to Dealreporter, Woodward is working with an investment bank as it considers potential deals and Meggitt is in the frame. Engine maker Rolls-Royce and GKN owner Melrose Industries also rose on the news. Melrose was also underpinned by an upgrade to 'buy' at Numis.
Wickes Group gained as Citi initiated coverage of the shares at ‘buy’ following the demerger from Travis Perkins.
Market Movers
FTSE 100 (UKX) 7,129.63 0.76%
FTSE 250 (MCX) 22,710.74 0.98%
techMARK (TASX) 4,369.00 0.82%
FTSE 100 - Risers
Anglo American (AAL) 3,381.50p 3.55%
Glencore (GLEN) 322.35p 3.22%
Rolls-Royce Holdings (RR.) 106.42p 2.92%
Ocado Group (OCDO) 1,952.50p 2.76%
Barclays (BARC) 181.94p 2.73%
Intermediate Capital Group (ICP) 2,122.00p 2.51%
Pearson (PSON) 846.00p 2.37%
Sainsbury (J) (SBRY) 251.50p 2.11%
Melrose Industries (MRO) 168.25p 2.00%
Rio Tinto (RIO) 6,598.00p 1.87%
FTSE 100 - Fallers
Berkeley Group Holdings (The) (BKG) 4,689.00p -1.33%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,023.00p -1.10%
Unilever (ULVR) 4,264.00p -0.94%
BT Group (BT.A) 170.00p -0.70%
Croda International (CRDA) 6,706.00p -0.59%
Reckitt Benckiser Group (RKT) 6,320.00p -0.49%
Standard Chartered (STAN) 517.80p -0.42%
Mondi (MNDI) 1,958.00p -0.36%
Flutter Entertainment (CDI) (FLTR) 14,515.00p -0.27%
Coca-Cola HBC AG (CDI) (CCH) 2,526.00p -0.24%
FTSE 250 - Risers
St. Modwen Properties (SMP) 535.00p 19.55%
Meggitt (MGGT) 500.60p 8.83%
Virgin Money UK (VMUK) 211.90p 6.16%
Frasers Group (FRAS) 576.00p 6.08%
Provident Financial (PFG) 259.60p 5.10%
Babcock International Group (BAB) 299.30p 4.25%
Pagegroup (PAGE) 585.50p 3.54%
Coats Group (COA) 60.30p 3.43%
WH Smith (SMWH) 1,899.50p 3.40%
Workspace Group (WKP) 902.00p 3.09%
FTSE 250 - Fallers
Syncona Limited NPV (SYNC) 223.00p -5.91%
John Laing Group (JLG) 362.00p -4.69%
Aston Martin Lagonda Global Holdings (AML) 1,842.50p -2.56%
Cineworld Group (CINE) 91.06p -1.92%
Energean (ENOG) 859.50p -1.77%
Morgan Advanced Materials (MGAM) 341.50p -1.30%
Bytes Technology Group (BYIT) 487.60p -1.22%
Tullow Oil (TLW) 55.60p -1.21%
Hochschild Mining (HOC) 193.00p -1.13%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,023.00p -1.10%