London midday: Stocks a touch firmer as investors eye Fed announcement

London stocks were just in the black by midday on Wednesday as investors mulled the latest UK manufacturing data and awaited a policy announcement from the US Federal Reserve.

The FTSE 100 was up 0.1% at 8,150.97, paring earlier gains.

Russ Mould, investment director at AJ Bell, said: "Having broken its run of record closes on Tuesday, the FTSE 100 ticked higher on Wednesday morning despite selling on Wall Street overnight.

"It’s decision day on interest rates in the US and while the Federal Reserve is almost certain to stick with the status quo, there will be considerable interest in the accompanying commentary. Will markets have to get used to the idea of zero cuts in 2024, having started the year with hopes for rates to be materially lowered?"

On home shores, investors were digesting the latest survey on the manufacturing sector, which showed it shrank last month as supply chain disruption hit home.

The latest seasonally-adjusted S&P Global UK manufacturing PMI came in at 49.1, down from March’s 20-month high of 50.3. A reading below the neutral 50.0 is regarded as a contraction, while one above it suggests growth.

Output and new orders both fell, respondents noted, which was attributed to uncertain market conditions, client destocking and supply chain disruption, largely relating to the crisis in the Red Sea.

Input price inflation also rose for the fourth successive month, to a 14-month high.

Rob Dobson, director of S&P Global Market Intelligence, said: "Output and new orders contracted following short-lived rebounds in March.

"The downtown is also sustaining cost caution at manufacturers, leading to lower employment, stock holdings and cutbacks in purchasing activity.

"The news on the prices front is also worrisome for those looking for a sustainable path back to target consumer price inflation, with cost pressures growing in industry and feeding through to higher selling prices at the factory gate."

Earlier, figures released by Nationwide showed that house prices unexpectedly fell in April for the second month in a row, as borrowing rates went up.

House prices fell 0.4% on the month following a 0.2% decline in March. Economists were expecting a 0.2% increase.

On the year, house price growth slowed to 0.6% in April from 1.6% the month before.

The average house price stood at £261,962 last month, versus £261,142 in March.

Nationwide chief economist Robert Gardner said: "The slowdown likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year.

"House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects."

In equity markets, Smith & Nephew shot higher as it reported a 2.9% year-on-year rise in first-quarter revenue to $1.39bn, as its orthopaedics business continued to recover.

GSK rose as the pharmaceutical giant lifted annual profit guidance, pinning its hopes on demand for its respiratory virus and shingles treatments.

On the downside, Haleon fell as the healthcare company’s first-quarter revenue missed expectations.

Fashion retailer Next was just a touch weaker, paring earlier losses after it said first-quarter sales came in ahead of forecasts and held guidance for the full year but warned that the next three months would be weaker due to wet spring weather.

Computacenter lost ground as it warned on first-half profits, citing strong prior-year comparatives and challenging UK markets.

Luxury carmaker Aston Martin Lagonda slumped after saying it saw a double-digit drop in revenues and adjusted profits in the first quarter, but that the launch of four new models should drive "significant growth" in the second half and beyond.

Market Movers

FTSE 100 (UKX) 8,150.97 0.08%
FTSE 250 (MCX) 19,944.28 -0.11%
techMARK (TASX) 4,589.26 -0.01%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,005.50p 2.71%
Severn Trent (SVT) 2,522.00p 2.23%
Prudential (PRU) 716.40p 2.20%
Airtel Africa (AAF) 113.10p 1.98%
GSK (GSK) 1,704.00p 1.85%
Fresnillo (FRES) 567.50p 1.70%
Coca-Cola HBC AG (CDI) (CCH) 2,634.00p 1.70%
Lloyds Banking Group (LLOY) 52.68p 1.50%
Reckitt Benckiser Group (RKT) 4,530.00p 1.39%
United Utilities Group (UU.) 1,058.00p 1.29%

FTSE 100 - Fallers

Ashtead Group (AHT) 5,668.00p -2.98%
Haleon (HLN) 330.10p -2.77%
JD Sports Fashion (JD.) 113.25p -2.03%
Weir Group (WEIR) 2,018.00p -1.56%
Ocado Group (OCDO) 347.60p -1.56%
Scottish Mortgage Inv Trust (SMT) 830.60p -1.42%
M&G (MNG) 198.50p -1.29%
Associated British Foods (ABF) 2,624.00p -1.20%
F&C Investment Trust (FCIT) 980.00p -1.11%
BP (BP.) 514.70p -1.10%

FTSE 250 - Risers

AJ Bell (AJB) 335.00p 3.55%
Travis Perkins (TPK) 778.00p 3.32%
Pennon Group (PNN) 681.00p 2.33%
Chemring Group (CHG) 383.50p 2.27%
Vistry Group (VTY) 1,222.00p 2.00%
Marshalls (MSLH) 274.00p 1.86%
Foresight Solar Fund Limited (FSFL) 89.50p 1.82%
FirstGroup (FGP) 165.00p 1.73%
SDCL Energy Efficiency Income Trust (SEIT) 60.50p 1.68%
Balfour Beatty (BBY) 369.00p 1.43%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 140.60p -5.13%
Playtech (PTEC) 506.00p -4.53%
Computacenter (CCC) 2,518.00p -2.48%
W.A.G Payment Solutions (WPS) 63.00p -2.48%
Carnival (CCL) 1,058.50p -2.44%
Ferrexpo (FXPO) 49.85p -2.06%
Syncona Limited NPV (SYNC) 123.00p -1.91%
Barr (A.G.) (BAG) 561.00p -1.75%
Polar Capital Technology Trust (PCT) 2,870.00p -1.71%
Wizz Air Holdings (WIZZ) 2,188.00p -1.71%