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London midday: Stocks in the black as investors mull manufacturing data

By Michele Maatouk

Date: Monday 01 Jun 2020

London midday: Stocks in the black as investors mull manufacturing data

(Sharecast News) - London stocks were still in the black by midday on Monday following the release of the latest UK manufacturing data, as investors kept an eye on ongoing tensions between the US and China after US President Trump's news conference last week.
The FTSE 100 was up 1.2% at 6,150.27 as traders in Europe got their first chance to react to Trump's statement on Friday.

Spreadex analyst Connor Campbell said: "In that anxiety-inducing address, the President announced the USA would be revoking Hong Kong's preferential treatment status for trade and travel, no longer viewing the region as 'autonomous' from China.

"Given what markets were expecting - something that would more explicitly damage the US-China trade deal - this news was actually a relative relief. However, that relief might prove to be short-lived."

Stocks pared gains a little following a report that Chinese officials had told agriculture companies to halt imports of some US farm goods. According to Bloomberg, state-owned traders Cofco and Sinograin were ordered to suspend purchases.

On home shores, the latest survey from IHS/Markit CIPS showed the UK manufacturing sector continued to struggle in May, although the pace of decline eased following April's historic fall.

The purchasing managers' index rose to 40.7 in May from the historic low of 32.6 in April. This was a marginal improvement on the flash reading of 40.6. However, the reading just missed consensus expectations of 40.8 and remains well below the key 50.0 mark that separates contraction from expansion.

It was also the seventh lowest reading in the survey's history as lockdown measures, company shutdowns and social distancing weighed heavily on the manufacturing sector. Output, new orders and employed all contracted sharply, the survey found.

Where there was growth, it was generally restricted to healthcare and personal protective equipment products.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, conceded the sector was still "a long way from normal" but argued it was moving in the right direction.

"Other indicators, such as daily energy consumption and daily heavy goods vehicle mileage, suggest that the production and transportation of manufactured goods rose steadily over the course of May, albeit from greatly depressed levels in April," he said.

"As a result we are still pencilling in a 4% month-to-month increase in manufacturing output in May, following an assumed 15% decline in April."

In equity markets, Associated British Foods gained after saying it was working to re-open all its Primark Stores in England on 15 June 15 as the government relaxes coronavirus lockdown rules.

Standard Chartered surged after an upgrade to 'buy' at Jefferies, while education publisher Pearson was boosted by an upgrade to 'buy' at Goldman Sachs.

Aerospace and defence giant Rolls-Royce rallied, having suffered heavy losses last week following a stake sale by AKO Capital and a downgrade of its credit rating by Standard & Poor's.

British Airways and Iberia parent IAG and cruise operator Carnival were also trading higher on the prospect of travel restrictions being lifted.

Petropavlovsk advanced as it denied it was in merger talks with fellow miner UGC after weekend speculation the two firms were studying a potential tie-up.

Market Movers

FTSE 100 (UKX) 6,150.27 1.21%
FTSE 250 (MCX) 17,259.96 1.27%
techMARK (TASX) 3,739.57 1.00%

FTSE 100 - Risers

Associated British Foods (ABF) 1,952.50p 7.22%
Standard Chartered (STAN) 391.70p 6.32%
Rolls-Royce Holdings (RR.) 287.10p 5.71%
International Consolidated Airlines Group SA (CDI) (IAG) 241.20p 5.56%
Carnival (CCL) 1,108.00p 4.78%
Pearson (PSON) 485.40p 4.75%
easyJet (EZJ) 710.80p 4.53%
Centrica (CNA) 38.06p 4.22%
Taylor Wimpey (TW.) 149.60p 4.18%
Prudential (PRU) 1,089.00p 4.01%

FTSE 100 - Fallers

Reckitt Benckiser Group (RB.) 7,100.00p -1.72%
Hikma Pharmaceuticals (HIK) 2,533.00p -1.48%
British Land Company (BLND) 402.00p -1.30%
Halma (HLMA) 2,302.00p -1.20%
Burberry Group (BRBY) 1,478.00p -1.17%
Admiral Group (ADM) 2,310.00p -0.99%
JD Sports Fashion (JD.) 652.00p -0.97%
Croda International (CRDA) 5,140.00p -0.96%
BAE Systems (BA.) 491.70p -0.91%
Polymetal International (POLY) 1,613.00p -0.86%

FTSE 250 - Risers

Airtel Africa (AAF) 36.70p 7.94%
Aggreko (AGK) 505.00p 7.49%
Wood Group (John) (WG.) 204.70p 6.48%
SSP Group (SSPG) 296.60p 6.31%
Hammerson (HMSO) 77.88p 5.82%
Rank Group (RNK) 151.40p 5.73%
Provident Financial (PFG) 207.20p 5.71%
G4S (GFS) 94.80p 5.33%
Equiniti Group (EQN) 140.40p 5.25%
Micro Focus International (MCRO) 427.80p 5.19%

FTSE 250 - Fallers

Bakkavor Group (BAKK) 73.60p -5.64%
Hyve Group (HYVE) 91.97p -4.98%
GCP Student Living (DIGS) 133.40p -3.75%
Balfour Beatty (BBY) 243.20p -2.95%
Games Workshop Group (GAW) 7,725.00p -2.95%
Spirent Communications (SPT) 241.50p -2.82%
Bodycote (BOY) 589.00p -2.64%
UK Commercial Property Reit Limited (UKCM) 60.30p -2.58%
Plus500 Ltd (DI) (PLUS) 1,292.50p -2.56%
Stagecoach Group (SGC) 66.05p -2.44%

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