London midday: Markets shrug off weak data as utilities gain

London's Footsie index was up 1% by lunchtime on Wednesday, led by strong gains from utility stocks, despite some disappointing economic data across Europe.

Just before midday, the FTSE 100 was up 0.98% at 7,342, with just four stocks registering losses.

The S&P Global/CIPS flash composite output index for the UK declined to 47.9 from 50.8 in August, coming in below the 50.0 mark that separates contraction from expansion for the first time since January and marking a 31-month low. Private sector firms put this down to a faster fall in new orders as sluggish domestic economic conditions and higher borrowing costs made clients cautious.

Meanwhile, the Eurozone flash composite purchasing managers' index fell below expectations to to 47.0 from 48.6 in July, its lowest since November 2020. If pandemic months are excluded, the latest reading was the lowest since April 2013.

Over on Wall Street, futures advanced as investors awaited the results from Nvidia's second quarter after the close, with the giant tech company's performance seen as a bellwether for wider market sentiment. The stock has tripled in this year alone, pushing the company's market cap to over $1trn.

US markets were also clawing back recent losses after a recent sell-off owing to concerns that interest rates will stay e levated for longer, as the Federal Reserve continues to battle stubbornly high inflation. The Fed's Jackson Hole conference which starts on Thursday will be closely watched for any hints at future policy action.

Utilities lead the rise

Utility stocks were performing well across the board, with Severn Trent, SSE, National Grid and United Utilities all making gains of 2-3%. Broker RBC on Wednesday morning highlighted National Grid and SSE as its top picks in the sector.

Mining heavyweights Anglo American, Rio Tinto and Fresnillo were also providing a lift on the blue chip index.

Meanwhile Shell and BP were among the few stocks in the red as oil prices slipped with Brent crude down 1.5% on the day.

Reckitt Benckiser gained after announcing the departure of chief financial officer and executive director Jeff Carr, who plans to retire at the end of March next year. Shannon Eisenhardt - who currently serves as CFO of consumer, brand and marketplace at Nike - will join the consumer goods group on 17 October,

On the FTSE 250, Rotork was among the best performers after an upgrade of the flow-control manufacturer by Peel Hunt to 'buy'. The broker gave a price target for the stock of 380p, indicating significant upside from the current 294p level.

Market Movers

FTSE 100 (UKX) 7,342.01 0.98%
FTSE 250 (MCX) 18,221.29 1.09%
techMARK (TASX) 4,237.93 0.96%

FTSE 100 - Risers

Severn Trent (SVT) 2,364.00p 2.83%
SSE (SSE) 1,620.00p 2.76%
National Grid (NG.) 968.00p 2.67%
Taylor Wimpey (TW.) 112.00p 2.56%
Ocado Group (OCDO) 737.60p 2.42%
Land Securities Group (LAND) 595.80p 2.37%
SEGRO (SGRO) 722.00p 2.35%
Unite Group (UTG) 929.00p 2.26%
United Utilities Group (UU.) 922.80p 2.03%
Flutter Entertainment (CDI) (FLTR) 13,910.00p 1.98%

FTSE 100 - Fallers

Entain (ENT) 1,156.50p -0.56%
BP (BP.) 476.20p -0.36%
Shell (SHEL) 2,365.50p -0.13%
B&M European Value Retail S.A. (DI) (BME) 568.60p -0.04%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 92.00p 5.75%
Wetherspoon (J.D.) (JDW) 684.00p 4.75%
Trainline (TRN) 224.40p 3.70%
Hammerson (HMSO) 25.20p 3.62%
Rotork (ROR) 294.40p 3.52%
QinetiQ Group (QQ.) 312.80p 3.37%
Capita (CPI) 18.94p 3.05%
Urban Logistics Reit (SHED) 115.00p 3.05%
Derwent London (DLN) 1,878.00p 2.96%
Great Portland Estates (GPE) 398.40p 2.95%

FTSE 250 - Fallers

Ithaca Energy (ITH) 159.20p -2.81%
Synthomer (SYNT) 65.15p -1.96%
Bakkavor Group (BAKK) 97.00p -1.42%
Watches of Switzerland Group (WOSG) 692.50p -1.07%
Coats Group (COA) 75.10p -1.05%
Just Group (JUST) 73.20p -0.95%
CMC Markets (CMCX) 122.80p -0.65%
Harbour Energy (HBR) 246.90p -0.60%
TUI AG Reg Shs (DI) (TUI) 517.00p -0.58%
Softcat (SCT) 1,413.00p -0.56%