London midday: Stocks in the black after upbeat services data; HSBC, Shell rally

London stocks were holding onto gains by midday on Thursday as investors digested a better-than-expected reading on the UK services sector, with decent results from the likes of Shell and HSBC also lending a hand.

The FTSE 100 was up 0.5% to 7,266.90, while the pound was up 0.2% against the dollar to 1.2889.

Sterling came under pressure earlier as news that the Queen had summoned the entire royal household to an emergency meeting at Buckingham Palace sparked concerns about hers and the Duke of Edinburgh's health. However, it later emerged that 95-year old Prince Philip will step down from his royal duties this autumn.

Meanwhile, there was no shortage of news for investors to sink their teeth into on the macroeconomic and corporate fronts.

Data released earlier showed growth in the UK services sector hit a four-month high in April, with the Markit/CIPS services purchasing managers' index rising to 55.8 from 55.0 in March.

The reading beat expectations for a decline to 54.5 and was above the 50 mark that separates expansion from contraction for the ninth month in a row, marking the fastest upturn in service sector output since December 2016.

UK service providers experienced a sustained rebound in business activity, supported by the fastest upturn in new work so far this year, while job creation rose to a four-month high on the back of renewed pressures on operating capacity.

"The upturn in the services PMI rounds off a hattrick of good news after upside surprises to both the manufacturing and construction PMIs," said Chris Williamson, chief business economist at IHS Markit. "The three surveys collectively point to GDP growing at a rate of 0.6% at the start of the second quarter."

Elsewhere, figures from the Bank of England revealed that mortgage approvals in March fell for the second month in a row to 66,837 from 67,936 the month before and versus consensus expectations for a smaller drop to 67,200.

Economists said the data added to evidence that the housing market is being increasingly affected by the squeeze on consumers from growing inflation and flat wages.

Other data from the BoE showed a flow of £1.6bn of UK net consumer credit in March, up from last month’s outturn of £1.4bn and above the consensus expectation of £1.3bn. But the rate of annual growth dipped to 10.2%, an eight-month low, from 10.5% in February and January, 10.6% in December and a peak of 10.9% in November.

Market participants were also mulling the Federal Reserve's overnight decision to stand pat on interest rates. Although this was widely expected, the odds of an interest rate hike at the central bank's June meeting rose to 94% from around 70% following the accompanying policy statement, in which it brushed aside the importance of weaker-than-expected first-quarter GDP figures.

The French election was also on investors' minds as centrist Emmanuel Macron remained ahead in the polls following Wednesday's televised debate between him and Marine Le Pen.

In corporate news, oil giant Royal Dutch Shell gushed higher as it said first-quarter profit more than doubled.

HSBC pushed higher after it said profits in the first quarter were hit by currency movements, but at the underlying level, they improved strongly against the same period last year and the fourth quarter of 2016.

RSA Insurance was on the front foot as it posted a 14% increase in first-quarter net written premiums, while supermarket Morrisons advanced after saying sales in the first quarter rose thanks to price cuts and solid trading over Easter.

Integrated security company G4S was in the black after it reported a 9% jump in revenue for the first quarter and said it saw a strong start to the year.

Randgold Resources spiked in early trade but was in the red by noon despite reporting a 33% jump in first-quarter profit and a rise in gold production, while fellow miners BHP Billiton and Antofagasta were weighed down as iron ore futures lost up to 7% and copper futures extended losses past 2% in the session.

Glencore was therefore in the red even as it raised its full year profits target slightly to between $2.3bn and $2.6bn, while Anglo American shares dropped as it agreed the sale of its 88% stake in the Drayton thermal coal mine in New South Wales.

Elsewhere on the downside, retailer Next was under the cosh after it trimmed the top end of its full-year profits guidance as sales fell in the first quarter of its financial year.

Convatec was weaker despite reiterating its guidance for 2017 and reporting in-line trading for the first quarter.

Kingfisher, Croda, Henderson, Derwent London, Card Factory and Hastings all fell as their stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,266.90 0.45%
FTSE 250 (MCX) 19,663.12 -0.10%
techMARK (TASX) 3,529.04 0.09%

FTSE 100 - Risers

HSBC Holdings (HSBA) 670.10p 3.86%
Royal Dutch Shell 'B' (RDSB) 2,124.50p 3.11%
Royal Dutch Shell 'A' (RDSA) 2,075.00p 2.82%
RSA Insurance Group (RSA) 617.00p 2.15%
International Consolidated Airlines Group SA (CDI) (IAG) 564.50p 1.62%
Ashtead Group (AHT) 1,586.00p 1.60%
Burberry Group (BRBY) 1,606.00p 1.52%
Hikma Pharmaceuticals (HIK) 1,966.00p 1.39%
CRH (CRH) 2,927.00p 1.39%
3i Group (III) 812.50p 1.12%

FTSE 100 - Fallers

Next (NXT) 4,192.00p -4.94%
Kingfisher (KGF) 329.10p -3.52%
Anglo American (AAL) 1,016.00p -2.73%
Marks & Spencer Group (MKS) 357.80p -2.37%
BHP Billiton (BLT) 1,122.50p -2.05%
Antofagasta (ANTO) 773.50p -1.96%
Glencore (GLEN) 281.45p -1.87%
Paddy Power Betfair (PPB) 8,245.00p -1.79%
Imperial Brands (IMB) 3,640.00p -1.66%
Convatec Group (CTEC) 293.50p -1.51%

FTSE 250 - Risers

G4S (GFS) 325.00p 3.34%
John Laing Group (JLG) 292.90p 2.41%
Grafton Group Units (GFTU) 766.00p 2.20%
Vesuvius (VSVS) 540.50p 1.98%
Euromoney Institutional Investor (ERM) 1,092.00p 1.68%
BGEO Group (BGEO) 3,645.00p 1.67%
Aggreko (AGK) 850.00p 1.61%
esure Group (ESUR) 262.40p 1.35%
NMC Health (NMC) 2,109.00p 1.35%
Keller Group (KLR) 924.50p 1.32%

FTSE 250 - Fallers

Kaz Minerals (KAZ) 454.30p -7.21%
Ladbrokes Coral Group (LCL) 123.00p -4.21%
Centamin (DI) (CEY) 156.90p -3.86%
Derwent London (DLN) 2,866.00p -3.50%
Vedanta Resources (VED) 615.50p -3.45%
Inmarsat (ISAT) 814.50p -3.04%
Restaurant Group (RTN) 339.50p -2.86%
Ferrexpo (FXPO) 149.70p -2.73%
Henderson Group (HGG) 226.00p -2.59%
Carillion (CLLN) 210.90p -2.50%