London close: Investors brush off profit-taking in oil, weak data

London stocks brushed aside profit-taking in oil and weak readings on the economy to end the day higher.

The FTSE 100 gained 0.14% to 7,367.60, while the FTSE 250 added 0.78% or 149.75 points to finish at 19,451.22.

Services sector activity in Britain was revealed to have weakened to its lowest in four months in June, while business optimism dropped to its second-lowest in over five and half years.

The UK Markit/CIPS services purchasing managers' index for June fell to 53.4 from the prior month's level of 53.8 and shy of the consensus forecast of 53.5.

"This bodes poorly for output over Q3 and Q4 of this year, and given that we believe firms’ concerns will only rise further as the year progresses, this suggests further deterioration may be in store," said Fabrice Montagne and Andrzej Szczepaniak at Barclays.

Wednesday's uninspiring macro news didn't end there, as data from the Office for National Statistics showed UK productivity fell in the first three months of the year, marking the first drop since late 2015.

Investors also took in their stride a word of caution out of the Monetary Policy Committee's Michael Saunders, who told The Guardian that households should expect to see Bank Rate head higher.

Nevertheless, in his interview with the newspaper Saunders also appeared to emphasise that was what on the cards was not a string of rate hikes, but rather more of a one-off move.

In parallel, oil prices tanked as Russia ruled out any proposals to deepen OPEC-led production cuts.

According to a Bloomberg report, Russia wants to continue with the current deal and said any further supply cuts would send the wrong message to the market.

Brent crude was 3.44% lower at $47.97, even if after eight consecutive days of gains.

On the corporate front, Worldpay ran into trouble after JP Morgan quashed speculation of a possible bidding war soon after the company backed a £8.5bn takeover from US rival Vantiv.

Tesco was in favour on the back of a favourable sales update out of its takeover target, Booker, which reported growth in like-for-like sales during the first quarter thanks to the late Easter and propitious weather.

Meanwhile, BRC shop price data showing deflation ran at a three and a half year low in June provided a favourable tail-wind for the sector.

Shares in online grocery specialist Ocado ticked up as it increased orders volumes and revenues in the first half of the year but saw profits shrink due to investments in its Andover 'customer fulfilment centre'.

Housebuilder Persimmon found buyers after reporting an excellent end to its financial year. Resilient consumer confidence drove a 12% rise in six-month revenues to £1.66bn as the volume of new homes sold hit 7,794. Peers Barratt Developments and Taylor Wimpey followed suit.

Elsewhere in the wider building sector, retirement housebuilder McCarthy & Stone advanced as it said the UK general election led to a slowdown in sales momentum in recent weeks but that underlying trading conditions remained stable, while building products distributor SIG surged as it said trading in the first half was as expected and the second half should be stronger.

Still on the economic calendar for Wednesday, the latest FOMC minutes were due to be released at 1900 BST.

Market Movers

FTSE 100 (UKX) 7,367.60 0.14%
FTSE 250 (MCX) 19,451.22 0.78%
techMARK (TASX) 3,506.19 0.62%

FTSE 100 - Risers

Tesco (TSCO) 173.45p 3.80%
Provident Financial (PFG) 2,402.00p 3.49%
Barratt Developments (BDEV) 582.00p 2.74%
London Stock Exchange Group (LSE) 3,692.00p 2.41%
Persimmon (PSN) 2,345.00p 2.36%
Shire Plc (SHP) 4,333.50p 2.16%
G4S (GFS) 332.00p 1.75%
Taylor Wimpey (TW.) 178.70p 1.65%
Carnival (CCL) 5,145.00p 1.58%
British American Tobacco (BATS) 5,257.00p 1.55%

FTSE 100 - Fallers

Worldpay Group (WPG) 372.00p -8.82%
Old Mutual (OML) 191.80p -1.74%
Barclays (BARC) 204.20p -1.33%
BP (BP.) 444.15p -1.30%
Royal Dutch Shell 'B' (RDSB) 2,074.00p -1.29%
Convatec Group (CTEC) 310.00p -1.18%
Centrica (CNA) 201.50p -1.18%
Royal Dutch Shell 'A' (RDSA) 2,050.50p -1.09%
Anglo American (AAL) 1,056.50p -1.03%
BT Group (BT.A) 288.75p -1.01%

FTSE 250 - Risers

Euromoney Institutional Investor (ERM) 1,100.00p 6.18%
Sirius Minerals (SXX) 30.30p 5.39%
SIG (SHI) 152.50p 4.52%
OneSavings Bank (OSB) 379.10p 4.09%
IP Group (IPO) 135.00p 3.85%
AA (AA.) 236.00p 3.74%
Aldermore Group (ALD) 222.20p 3.69%
Booker Group (BOK) 190.70p 3.53%
Computacenter (CCC) 830.00p 3.43%
Northgate (NTG) 454.10p 3.37%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 270.90p -4.28%
Tullow Oil (TLW) 157.30p -2.96%
Petrofac Ltd. (PFC) 454.90p -2.51%
Ferrexpo (FXPO) 203.10p -2.03%
Ultra Electronics Holdings (ULE) 1,988.00p -1.73%
TBC Bank Group (TBCG) 1,612.00p -1.28%
Hochschild Mining (HOC) 263.00p -1.28%
Wood Group (John) (WG.) 637.00p -1.24%
Acacia Mining (ACA) 280.80p -1.23%
Amec Foster Wheeler (AMFW) 467.80p -1.22%