London midday: FTSE touch firmer as investors eye Ukraine summit

London stocks were still a touch firmer by midday on Thursday as investors eyed a summit on the Ukraine crisis and digested a raft of UK data.

The FTSE 100 was up 0.2% at 7,476.69, while Brent crude was trading above $120 a barrel.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Traders are on tenterhooks ahead of a meeting of G7 leaders and a NATO summit, with expectation that the military response will be beefed up through fresh weapons supply to Ukraine and that sanctions will also be tightened.

"But splits remain over deploying a serious blow to Moscow’s economic resilience by bringing in a European embargo to energy supplies, although an offer of more liquefied natural gas from the US would ease the transition away from reliance on Russia.

"In the UK concerns stay elevated about the knock-on effect that soaring commodity prices will have on business resilience and consumer confidence, after the government’s fiscal plan was criticised for not offering enough medicine to ease the financial pain of higher prices. The small steps taken are individually welcome but together they don’t ease do much to ease the increasing burden of the cost of living and cost of commerce crises."

A survey released earlier showed that business optimism slumped in March after cost inflation soared to fresh highs.

The flash reading for March’s S&P Global CIPS UK PMI Composite Index was 59.7 in March, against 59.9 in February. Consensus had been for 57.5.

Within that, the services PMI Business Activity Index hit a nine-month high of 61.0, up on February’s 60.5, boosted by strong demand for travel, leisure and entertainment following the relaxation of Covid restrictions.

But that was largely offset by weakness in the manufacturing sector, which was hit by ongoing supply shortages and greater caution from clients. The output index fell to 52.6 from 56.9, while the PMI slipped to 55.5 from 58.0, a 13-month low.

Business optimism also tumbled, hitting a 17-month low, after escalating fuel, energy and staff costs resulted in the steepest rise in prices charged since the index began in November 1999. Respondents also flagged concerns that the war in Ukraine could dent already-fragile supply chains and hurt customer demand.

Chris Williamson, chief business economist at S&P Global, said: "The outlook darkened as concerns over Russia’s invasion exacerbated existing worries over soaring prices, supply chains and slowing economic growth."

Elsewhere, the latest survey from the Confederation of British Industry showed that retail sales growth slowed in March as living costs rose.

The CBI’s monthly retail sales balance fell to +9 from +14 in February, coming in below expectations for a reading of +10.

Retail sales were seen as "poor" for this time of the year, with the balance down to -23 in March from +16 the month before. There are expected to remain below seasonal norms, but to a lesser extent, in April.

CBI principal economist Martin Sartorius said: "Retailers had a mediocre March, with sales reported as being below seasonal norms. The cost-of-living crisis is looming large across the sector, as households’ wallets are being hit by the fastest rate of inflation in decades."

In equity markets, M&G was sitting pretty at the top of the FTSE 100 after it launched a £500m share buyback programme.

Bridgepoint surged to the top of the FTSE 250 after well-received results, while Games Workshop was trading higher after an update.

On the downside, Next slumped after it reduced its profit guidance and predicted selling prices would rise by 8% in the second half of the year, as the fashion retailer reported a more than doubling of annual profit.

XP Power fell after saying it may have to cough up $40m in damages after US-based Comet won a trade secret misappropriation lawsuit against the London-listed critical power solutions developer. It didn’t help that the stock was trading without entitlement to the dividend.

Schroders, Pearson, Prudential, Ferguson, Greggs and Close Brothers were also ex-dividend.

BA and Iberia owner IAG and Wizz Air both flew lower after rating downgrades at Deutsche Bank.

Market Movers

FTSE 100 (UKX) 7,476.69 0.22%
FTSE 250 (MCX) 20,890.10 -0.53%
techMARK (TASX) 4,329.42 -0.03%

FTSE 100 - Risers

M&G (MNG) 222.20p 2.78%
Fresnillo (FRES) 743.20p 2.37%
Rio Tinto (RIO) 5,904.00p 1.79%
NATWEST GROUP PLC ORD 100P (NWG) 223.60p 1.50%
United Utilities Group (UU.) 1,060.50p 1.48%
HSBC Holdings (HSBA) 517.10p 1.45%
DCC (CDI) (DCC) 5,878.00p 1.45%
BAE Systems (BA.) 745.60p 1.44%
Imperial Brands (IMB) 1,624.00p 1.37%
Auto Trader Group (AUTO) 651.20p 1.31%

FTSE 100 - Fallers

Next (NXT) 6,164.00p -3.45%
Schroders (SDR) 3,141.00p -3.41%
Pearson (PSON) 757.40p -2.85%
International Consolidated Airlines Group SA (CDI) (IAG) 134.92p -2.80%
Howden Joinery Group (HWDN) 780.40p -2.62%
Glencore (GLEN) 498.15p -2.55%
Smurfit Kappa Group (CDI) (SKG) 3,359.00p -2.44%
Ferguson (FERG) 10,960.00p -2.36%
Coca-Cola HBC AG (CDI) (CCH) 1,599.00p -1.99%
Ashtead Group (AHT) 5,198.00p -1.70%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 325.50p 12.44%
Polymetal International (POLY) 153.80p 11.85%
Games Workshop Group (GAW) 7,610.00p 6.88%
Energean (ENOG) 1,180.00p 4.24%
Homeserve (HSV) 732.00p 4.05%
Harbour Energy (HBR) 491.20p 3.54%
CMC Markets (CMCX) 266.50p 2.70%
Coats Group (COA) 78.80p 2.34%
Network International Holdings (NETW) 260.60p 2.08%
Centamin (DI) (CEY) 88.98p 1.92%

FTSE 250 - Fallers

Weir Group (WEIR) 1,787.00p -5.37%
SDCL Energy Efficiency Income Trust (SEIT) 116.50p -3.72%
Trustpilot Group (TRST) 137.70p -3.64%
XP Power Ltd. (DI) (XPP) 3,510.00p -3.57%
OSB Group (OSB) 542.50p -3.30%
Mitie Group (MTO) 60.20p -2.90%
Rank Group (RNK) 139.40p -2.79%
FDM Group (Holdings) (FDM) 1,004.00p -2.71%
Greggs (GRG) 2,395.00p -2.64%
Crest Nicholson Holdings (CRST) 284.20p -2.60%