London midday: Solid gains for stocks ahead of ECB policy summit

London stocks were firmly higher ahead of the start of a panel discussion at the European Central Bank's semi-annual policy retreat in Sintra, Portugal, in which several of the world's top central bankers would participate.

Ahead of that panel, which was set to start at 1430 BST, the FTSE 100 was adding 0.66% to 7,511.22, while the second-tier index had jumped 1.72% to 18,366.51.

Both Bank of England Governor, Andrew Bailey, and the Fed's Jerome Powell would participate on the panel, as well as Bank of Japan head Kazuo Ueda.

"Often in these situations, policymakers will stick to the script, preferring to leave big announcements for meetings and certain high-profile events," said Craig Erlam, senior market analyst at Oanda.

"But with so many heads appearing at the same time, there's every chance at least one says something that will either rattle or stimulate the markets."

In the background, cable was 0.43% lower to 1.2694, while the yield on the benchmark 10-year Gilt was five basis points lower at 4.324%.

Stocks on Wall Street had run up during the previous session following the release of a batch of largely better-than-expected economic data.

When it came to the ECB, Reuters reported that of seven rate-setters at Sintra, "most" were anticipating further rate hikes at both the July and September meetings.

And overnight it was reported that Chinese industrial profits plummeted at a year-to-date pace of 18.8%, following a 20.6% drop in April.

Commenting on the outlook for industrial profits in the Asian giant, Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: "Exports are now falling again, and the H2 global outlook is dismal.

"China is likely to add limited fiscal and quasi-fiscal stimulus to the recent 10bp lending rate cuts, but this will merely keep growth on track for a relatively conservative “about 5%” GDP growth target."

Investors also took note of a warning from Japanese officials against "excessive foreign exchange moves", in likely reference to recent weakness in the yen.

It was also reported that the Biden administration was mulling fresh curbs on exports to China of chips used for artificial intelligence.

That report appeared to weigh on Chinese stocks, although Japan's Nikkei-225 climbed 2.02%.

No major economic releases were scheduled in the UK on Wednesday.

Thames Water in trouble

The UK government has reportedly started drawing up plans to temporarily take beleaguered utility Thames Water back into public ownership amid fears it cannot service its £14bn debt pile a day after its chief executive quit. Local media reported that industry regulator Ofwat and government ministers were holding talks about potentially placing Thames Water into a special administration regime (SAR) similar to that used after the collapse of energy supplier Bulb in 2021.

Diversified Energy said it had sold some of its non-core, non-operated US assets for $40m. The assets include approximately 200 net, non-operated wells producing around 3 million barrels of oil equivalent per day. The deal represents an approximate four times next 12 months cash flow multiple and includes around 85,000 associated net acres located in Oklahoma and Texas.

Warpaint London said trading and margins continued to be robust over the first half of 2023. In a trading update issued ahead of its Annual General Meeting, the cosmetics supplier said sales for the six months ending on 30 June were expected to top £36m. The company's margins were still robust and expected to exceed those achieved in 2022.

Market Movers

FTSE 100 (UKX) 7,512.86 0.69%
FTSE 250 (MCX) 18,349.77 1.63%
techMARK (TASX) 4,480.69 1.12%

FTSE 100 - Risers

Sage Group (SGE) 917.60p 5.06%
CRH (CDI) (CRH) 4,329.00p 3.00%
Land Securities Group (LAND) 580.00p 2.51%
Ashtead Group (AHT) 5,474.00p 2.51%
Abrdn (ABDN) 214.60p 2.43%
Pershing Square Holdings Ltd NPV (PSH) 2,782.00p 2.13%
SEGRO (SGRO) 723.80p 2.12%
Spirax-Sarco Engineering (SPX) 10,290.00p 2.03%
3i Group (III) 1,884.50p 1.98%
Vodafone Group (VOD) 74.07p 1.95%

FTSE 100 - Fallers

Ocado Group (OCDO) 506.60p -9.18%
Admiral Group (ADM) 2,093.00p -2.10%
Anglo American (AAL) 2,252.00p -1.23%
Fresnillo (FRES) 601.00p -0.96%
Glencore (GLEN) 438.15p -0.49%
Endeavour Mining (EDV) 1,869.00p -0.37%
Rio Tinto (RIO) 5,024.00p -0.36%
Rolls-Royce Holdings (RR.) 154.95p -0.32%
Imperial Brands (IMB) 1,750.50p -0.23%
Antofagasta (ANTO) 1,480.50p -0.17%

FTSE 250 - Risers

3i Infrastructure (3IN) 302.00p 5.23%
GCP Infrastructure Investments Ltd (GCP) 77.90p 5.13%
Synthomer (SYNT) 76.35p 4.95%
HICL Infrastructure (HICL) 135.80p 4.95%
International Public Partnerships Ltd. (INPP) 133.60p 4.87%
Bridgepoint Group (Reg S) (BPT) 206.20p 4.83%
Bluefield Solar Income Fund Limited (BSIF) 121.60p 4.83%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 139.00p 4.67%
Carnival (CCL) 1,129.00p 4.49%
Currys (CURY) 54.90p 4.27%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 165.00p -1.20%
4Imprint Group (FOUR) 4,720.00p -0.94%
FDM Group (Holdings) (FDM) 574.00p -0.69%
Centamin (DI) (CEY) 90.40p -0.55%
Greggs (GRG) 2,570.00p -0.54%
Digital 9 Infrastructure NPV (DGI9) 61.40p -0.49%
NB Private Equity Partners Ltd. (NBPE) 1,516.00p -0.26%
Energean (ENOG) 995.00p -0.20%
Indivior (INDV) 1,776.00p -0.17%
Hilton Food Group (HFG) 623.00p -0.16%