London midday: Stocks in the black after upbeat manufacturing data
London stocks were holding on to gains by midday, while the pound ticked higher following the release of upbeat UK manufacturing data.
The FTSE 100 was up 0.4% to 7,235.06, while the pound was up 0.2% against the dollar to 1.2921, having popped above $1.29 after a survey showed UK manufacturing activity was much stronger than expected in April as companies restocked rapidly as input price pressures remained high but continued to retreat from their peak.
April's manufacturing purchasing managers' index from IHS Markit and CIPS unexpectedly leapt to a three-year high of 57.3 having dipped to 54.2 in March, with most economists forecasting another modest fall.
With a PMI reading above 50 indicating growth, this was the manufacturing sector's ninth month of expansion in a row since the decline in the post-referendum month of July.
Economists noted that the improvement in Markit’s survey brings it back in line with a rival survey from the CBI, which did not show a deterioration in the first quarter.
Manufacturing production expanded at the fastest pace in three months, Markit said, with the strongest growth coming in the investment goods sector, followed by the intermediate goods category.
Inflows of new work reached the strongest level since January 2014, with the new order index rising to 60.7 from the prior month's 55.4, mostly driven by the domestic market.
The output prices balance edged even higher to 61.8 in April, from 61.7 in March, while input prices materially weakened for the third consecutive month.
IG analyst Joshua Mahony said: "The recent deterioration in UK manufacturing growth appears to have arrested, with this morning’s bumper PMI announcement sending the pound surging in response. The recent decline in UK PMI surveys have been a bit of a downer for growth expectations, with the post-Article 50 period expected to only serve to intensify this decline.
"However, the jump to a three-year high has proven that manufacturing is more resilient than many thought, with employment, output and new orders growth all improving markedly. Interestingly, we are seeing an important role for both domestic demand and export business, as the effect of the weak pound continues to play a beneficial role."
In corporate news, oil giant BP gushed higher after saying it got off to a strong first quarter, with a £1.45bn profit and expectations of a "material improvement" in cash flow from the second half of the year.
Global medical technology company ConvaTec Group pushed higher as it announced the US launch of the Flexi-Seal PROTECT Fecal Management System, following receipt of 510(k) clearance from the US Food and Drug Administration.
Aberdeen Asset Management advanced after it posted a 10.6% increase in first-half revenue, boosted by markets and currencies, as outflows slowed.
UAE-based healthcare provider NMC Health gained ground after saying it expects an earnings boost from regulatory changes in Abu Dhabi.
Bovis Homes edged up despite saying it would take a one-off £2.8m hit from the failed merger efforts with Redrow and Galliford Try earlier this year.
Ocado shares surged on reports it is considering a tie-up with Marks & Spencer.
On the downside, online food delivery company Just Eat was in the red despite reporting a 46% rise in first-quarter revenue and reiterating its full-year guidance.
AstraZeneca turned lower after it and and its global biologics research and development arm, MedImmune, said the US Food and Drug Administration (FDA) has granted accelerated approval to the bladder cancer treatment Imfinzi (durvalumab).
Challenger bank Shawbrook fell despite reporting a solid first quarter, as its board announced more details about why it continues to recommend shareholders reject a buyout offer from Pollen Street and BC Partners.
Market Movers
FTSE 100 (UKX) 7,235.06 0.43%
FTSE 250 (MCX) 19,719.17 0.53%
techMARK (TASX) 3,492.40 0.51%
FTSE 100 - Risers
Standard Life (SL.) 372.80p 2.45%
Worldpay Group (WPG) 306.60p 2.20%
Persimmon (PSN) 2,374.00p 1.89%
Barratt Developments (BDEV) 590.00p 1.81%
Intertek Group (ITRK) 4,136.00p 1.72%
Croda International (CRDA) 3,828.00p 1.70%
Hikma Pharmaceuticals (HIK) 1,969.00p 1.65%
Scottish Mortgage Inv Trust (SMT) 380.90p 1.57%
Morrison (Wm) Supermarkets (MRW) 243.50p 1.50%
Experian (EXPN) 1,683.00p 1.45%
FTSE 100 - Fallers
Glencore (GLEN) 296.65p -2.31%
Antofagasta (ANTO) 819.00p -2.27%
Anglo American (AAL) 1,082.00p -2.21%
Fresnillo (FRES) 1,422.00p -2.07%
Randgold Resources Ltd. (RRS) 6,665.00p -2.06%
Ashtead Group (AHT) 1,607.00p -1.47%
Rio Tinto (RIO) 3,026.50p -1.16%
BHP Billiton (BLT) 1,161.50p -1.15%
Barclays (BARC) 210.60p -0.78%
Standard Chartered (STAN) 717.10p -0.57%
FTSE 250 - Risers
Ocado Group (OCDO) 268.00p 6.77%
Nostrum Oil & Gas (NOG) 474.60p 5.84%
Aberdeen Asset Management (ADN) 289.30p 3.69%
esure Group (ESUR) 252.90p 3.22%
Clarkson (CKN) 2,941.00p 2.69%
Bellway (BWY) 2,922.00p 2.67%
NMC Health (NMC) 2,040.00p 2.67%
IP Group (IPO) 143.00p 2.51%
Lancashire Holdings Limited (LRE) 698.50p 2.34%
Cobham (COB) 135.60p 2.34%
FTSE 250 - Fallers
Vedanta Resources (VED) 658.50p -4.77%
Just Eat (JE.) 560.00p -2.95%
Ladbrokes Coral Group (LCL) 127.60p -2.52%
Entertainment One Limited (ETO) 241.20p -2.47%
HICL Infrastructure Company Ltd (HICL) 171.00p -1.89%
Allied Minds (ALM) 153.80p -1.85%
Centamin (DI) (CEY) 173.70p -1.81%
Thomas Cook Group (TCG) 94.05p -1.67%
Hochschild Mining (HOC) 250.00p -1.65%
Telecom Plus (TEP) 1,230.00p -1.60%