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London open: Stocks rally after solid Chinese services data

By Michele Maatouk

Date: Wednesday 03 Jun 2020

London open: Stocks rally after solid Chinese services data

(Sharecast News) - London stocks rose in early trade on Wednesday, with sentiment boosted by encouraging services data out of China .
At 0840 BST, the FTSE 100 was up 1.1% at 6,285.82.

Data released earlier showed that China's services sector returned to growth in May for the first time since January. The Caixin/Markit services purchasing managers' index increased to 55.0 from 44.4 in April, marking the highest level since October 2010 and coming in comfortably above the 50 mark that separates contraction from growth. It was also above expectations for a reading of 47.3.

Spreadex analyst Connor Campbell said: "Ignorant, oblivious or uncaring about the domestic situation in the USA, investors instead focused on a gangbusters Caixin services PMI out of China, extending the month's early rebound."

Campbell said the figures were "a huge boost" to Europe, adding that the FTSE would have been even higher "if the pound weren't continuing to rebound itself".

"Though the ongoing Brexit talks seem frosty at best, outright hostile at worst, cable rose 0.4% to $1.2588, its best price in close to seven weeks," he said. "It remains to be seen whether the pound can keep hold of that growth in the face of another weak UK services PMI, one that is expected to see the final reading for May revised marginally higher, from 27.8 to 27.9."

The UK services PMI for May is due out at 0930 BST.

In equity markets, Chemring surged after the defence firm backed its full-year expectations and posted a rise in interim profit thanks to strong performances in both of its segments.

Travel company TUI racked up healthy gains as it reached a compensation agreement with Boeing over the grounding of 737 Max planes.

Drinks company C&C Group was also in the black as it reported a 7.8% jump in full-year net revenue.

On the downside, Ibstock lost ground as the maker of clay bricks and concrete products said sales volumes slid from late March after the coronavirus lockdown was imposed, and announced it could cut around 15% of its workforce.

SSP was lower after the transport catering firm said it swung to a £34m half-year loss from a profit of £53m a year earlier and pulled its interim dividend as international travel collapsed amid the Covid crisis.

In broker note action, Marks & Spencer was lifted by an upgrade to 'buy' at Jefferies, while B&M European Value Retail was dented by a downgrade to 'hold' by the same outfit.

Market Movers

FTSE 100 (UKX) 6,285.82 1.06%
FTSE 250 (MCX) 17,629.51 1.11%
techMARK (TASX) 3,765.38 0.50%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 313.80p 4.46%
Centrica (CNA) 40.18p 4.26%
Prudential (PRU) 1,136.50p 3.46%
Royal Dutch Shell 'A' (RDSA) 1,376.40p 3.13%
Lloyds Banking Group (LLOY) 32.93p 3.13%
Informa (INF) 500.60p 3.07%
International Consolidated Airlines Group SA (CDI) (IAG) 258.20p 3.03%
Royal Dutch Shell 'B' (RDSB) 1,323.40p 2.99%
easyJet (EZJ) 746.00p 2.95%
BP (BP.) 337.95p 2.85%

FTSE 100 - Fallers

Polymetal International (POLY) 1,567.00p -2.28%
Melrose Industries (MRO) 126.50p -1.86%
Hikma Pharmaceuticals (HIK) 2,389.00p -1.48%
Fresnillo (FRES) 782.60p -1.39%
Antofagasta (ANTO) 895.20p -1.19%
Vodafone Group (VOD) 133.76p -0.90%
British Land Company (BLND) 437.40p -0.82%
Flutter Entertainment (FLTR) 10,825.00p -0.60%
Ashtead Group (AHT) 2,493.00p -0.44%
Pearson (PSON) 504.00p -0.36%

FTSE 250 - Risers

Chemring Group (CHG) 250.00p 17.10%
Senior (SNR) 72.75p 7.30%
TUI AG Reg Shs (DI) (TUI) 476.90p 6.59%
Micro Focus International (MCRO) 470.80p 6.40%
G4S (GFS) 99.84p 5.65%
Wood Group (John) (WG.) 222.60p 5.65%
Marks & Spencer Group (MKS) 104.40p 5.65%
Provident Financial (PFG) 207.00p 5.61%
Marston's (MARS) 64.15p 5.60%
Hilton Food Group (HFG) 1,294.00p 5.37%

FTSE 250 - Fallers

Oxford Instruments (OXIG) 1,204.00p -3.68%
PureTech Health (PRTC) 249.50p -3.29%
Helios Towers (HTWS) 158.60p -3.17%
Spirent Communications (SPT) 240.50p -3.02%
SSP Group (SSPG) 298.40p -2.29%
PPHE Hotel Group Ltd (PPH) 1,180.00p -1.67%
Hochschild Mining (HOC) 205.00p -1.54%
Centamin (DI) (CEY) 160.80p -1.53%
Cairn Energy (CNE) 122.70p -1.45%
Ibstock (IBST) 197.70p -1.45%

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