London midday: Stocks push higher as miners rally

London stocks had edged higher by midday on Monday amid hopes of further economic stimulus from China.

The FTSE 100 was up 0.4% at 7,557.72.

Russ Mould, investment director at AJ Bell, said: "The markets built on last week’s strong finish to start the second half of the year in decent fettle.

"Asian stocks took their cue from Friday’s rally on Wall Street, prompted by data showing core inflation in the US is easing, perhaps reducing the need for too many more rate hikes across the Atlantic.

"There is also improved sentiment towards the Chinese economy, reflected in strong gains for miners on the FTSE 100 on Monday. Now some of the disappointment about a slower than expected post-Covid recovery has eased, the focus is turning to potential financial stimulus and support which could have positive implications for metals and energy demand."

Data out earlier showed that activity in China’s manufacturing sector slowed in June, with the Caixin/S&P Global purchasing managers’ index falling to 50.5 from 50.9 in May. Still, this was above consensus expectations for a reading of 50.0.

A reading above 50.0 signals expansion, while a reading below indicates contraction.

Wang Zhe, senior economist at Caixin Insight Group, said: "A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain.

"Problems reflected in June’s Caixin China manufacturing PMI, ranging from an increasingly dire job market to rising deflationary pressure and waning optimism, also point to the same conclusion."

Last Friday, data from China’s National Bureau of Statistics showed the official manufacturing PMI ticked up to 49.0 in June from 48.8 in May.

On home shores, a survey showed that the downturn in the manufacturing sector deepened in June.

The S&P Global/CIPS manufacturing purchasing managers’ index declined to a six-month low of 46.5 from 47.1 in May. This marked the 11th month of contraction, although it was above the flash estimate of 46.2.

The survey showed that all five of the subcomponent indices - output, new orders, stocks of purchases, employment and suppliers' delivery times - were at levels consistent with weaker operating conditions.

Rob Dobson, director at S&P Global Market Intelligence, said: "Producers are being hit by weak domestic and export market conditions with clients showing a greater reluctance to commit to spending due to market uncertainty, increased competition and elevated costs. This is also impacting business optimism and stoking fears among some manufacturers that client spending may shift to lower cost rivals and markets.

"Although some respite is being offered in the short-term by reduced pressures on supply chains and costs, these remain a symptom of the current weakness of demand faced by the sector and are therefore unlikely to play a role in boosting production moving forward. Manufacturers therefore remain in defence mode, looking to cut back spending on purchasing and employment wherever possible and release capital tied up in stocks."

In equity markets, heavily-weighted miners were the standout gainers, with Anglo American, Rio Tinto, Glencore and Antofagasta all higher as base metals prices rose.

Tesco ticked up as it appointed Gerry Murphy as its new chair with effect from 1 September, replacing John Allan, who stepped down due to allegations of misconduct.

Elsewhere, AstraZeneca slumped as it announced the results of a high-level study of a new lung cancer drug.

Market Movers

FTSE 100 (UKX) 7,557.72 0.35%
FTSE 250 (MCX) 18,522.57 0.57%
techMARK (TASX) 4,433.86 -0.69%

FTSE 100 - Risers

Anglo American (AAL) 2,324.00p 4.25%
Glencore (GLEN) 460.30p 3.75%
BP (BP.) 471.25p 2.85%
Antofagasta (ANTO) 1,498.50p 2.67%
Smith (DS) (SMDS) 278.60p 2.50%
Rio Tinto (RIO) 5,100.00p 2.42%
Mondi (MNDI) 1,227.50p 2.17%
Ocado Group (OCDO) 580.00p 2.11%
Shell (SHEL) 2,392.50p 2.09%
Barclays (BARC) 156.20p 2.05%

FTSE 100 - Fallers

AstraZeneca (AZN) 10,670.00p -5.37%
Smith & Nephew (SN.) 1,220.00p -4.14%
B&M European Value Retail S.A. (DI) (BME) 542.80p -2.41%
Halma (HLMA) 2,238.00p -1.71%
Flutter Entertainment (CDI) (FLTR) 15,565.00p -1.46%
Melrose Industries (MRO) 500.00p -1.22%
Burberry Group (BRBY) 2,097.00p -1.08%
Auto Trader Group (AUTO) 604.20p -1.02%
Convatec Group (CTEC) 203.40p -0.97%
Ashtead Group (AHT) 5,398.00p -0.84%

FTSE 250 - Risers

Harbour Energy (HBR) 239.80p 4.90%
TUI AG Reg Shs (DI) (TUI) 579.00p 3.86%
Ferrexpo (FXPO) 92.85p 3.46%
CMC Markets (CMCX) 158.80p 3.25%
Carnival (CCL) 1,342.50p 3.23%
Me Group International (MEGP) 168.80p 3.18%
Vanquis Banking Group 20 (VANQ) 196.20p 3.15%
Mobico Group (MCG) 100.30p 3.14%
Wood Group (John) (WG.) 138.70p 2.88%
Chemring Group (CHG) 291.00p 2.83%

FTSE 250 - Fallers

North Atlantic Smaller Companies Inv Trust (NAS) 3,490.00p -2.51%
Bytes Technology Group (BYIT) 514.50p -2.46%
Pets at Home Group (PETS) 367.80p -2.34%
4Imprint Group (FOUR) 4,695.00p -1.98%
Molten Ventures (GROW) 262.60p -1.95%
Renishaw (RSW) 3,854.00p -1.69%
Hipgnosis Songs Fund Limited NPV (SONG) 78.70p -1.38%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,165.00p -1.37%
Computacenter (CCC) 2,260.00p -1.31%
Bridgepoint Group (Reg S) (BPT) 200.00p -1.28%