London midday: Stocks rise after upbeat manufacturing PMIs

London stocks gained on Wednesday after positive manufacturing reports and ahead of the Federal Reserve’s interest rate decision.

At midday, the FTSE 100 rose 0.50% to 7,134.43 points.

The pound strengthened, rising 0.44% against the dollar to $1.2634 and 0.43% versus the euro to €1.1699 as members of parliament continued to debate the Brexit bill ahead of a vote on whether to trigger Article 50.

During the second day of the debate in parliament on Wednesday, Sir Ivan Rogers said the European Commission expects a figure "of the order of €40-60bn" for leaving the EU, adding that a free trade deal with the bloc would be the "most complex" agreement ever.

Rogers said he has no doubt the UK will be able to get trade deals with non-EU countries after but the advantage of being in the EU is the size of its market.

Meanwhile, investors were digesting a slate of manufacturing data.

Markit’s UK manufacturing purchasing managers’ index for January fell to 55.9 from December's two-and-a-half-year high of 56.1, exactly in line with forecasts. A reading above 50 signals expansion in sector activity.

In the eurozone, Markit’s final manufacturing PMI printed at 55.2 in January, up from the flash estimate of 55.1 and December’s reading of 54.9.

Earlier, figures released in China showed manufacturing in January expanded at close to its fastest pace in two years. China's official manufacturing PMI came in at 51.3, down a touch from 51.4 in December but beating expectations for a reading of 51.2.

In Japan, a survey revealed manufacturing was at its highest level in nearly three years. The final Markit/Nikkei Japan manufacturing purchasing managers' index came in at a seasonally-adjusted 52.7, a touch below the flash reading of 52.8 but higher than December’s final reading of 52.4.

The US will also see the release of manufacturing PMI from Markit at 1445 GMT, along with the ISM manufacturing index at 1500 GMT.

Elsewhere, the US ADP private payrolls report is due at 1315 GMT, ahead of the highly awaited non-farm payrolls report on Friday.

The main event on Wednesday in the US is the Fed’s policy announcement at 1900 GMT. Analysts expect the central bank will keep interest rates unchanged but will be looking for clues in the policy statement on when the Fed plans to next hike rates.

“In the absence of a press conference with Chair Janet Yellen following today’s announcement, investors will be left to pour over the statement that it released alongside the decision to see whether views have changed on the path of interest rates this year since the last meeting,” said Craig Erlam, senior market analyst at Oanda.

“Given that the Fed is none-the-wiser when it comes to Trump’s spending and tax plans, I would imagine the views of policy makers will be unchanged since the middle of December and they will reiterate an intention to hike three times.”

In company news, TalkTalk was on the rise as it announced that chief executive Dido Harding was stepping down, and said revenue and earnings for the current financial year would be affected by re-contracting activity, but will be in line with previous guidance.

BT gained ground as it said Openreach has appointed Sir Brendan Barber and Edward Astle as independent members of its newly formed board, created as part of an Ofcom-guided strategy to improve autonomy and independence at the telecoms infrastructure firm.

Aerospace and defence group Rolls-Royce was on the front foot as UBS lifted the stock to ‘buy’ from ‘neutral’.

Gold miner Centamin gained ground as it posted a big jump in revenue and profit for 2016 and lifted its dividend payment.

Soft drinks maker AG Barr fizzed higher after the manufacturer of Irn-Bru and Rubicon said it reached full year profit targets and is well placed to traverse another challenging year ahead.

Wizz Air flew lower after the Central and Eastern Europe focused airline cut its underlying net profit guidance for the full year despite reporting a surge in third-quarter profit, on the back of lower fuel prices and severe weather conditions.

Hochschild Mining was also weaker as it said it has suspended operations at its Inmaculada mine in southern Peru following a fatal accident involving two contractors on Tuesday.

Market Movers

FTSE 100 (UKX) 7,144.80 0.64%
FTSE 250 (MCX) 18,217.21 0.38%
techMARK (TASX) 3,251.94 0.81%

FTSE 100 - Risers

Pearson (PSON) 635.50p 2.67%
Hikma Pharmaceuticals (HIK) 1,862.00p 2.08%
Smiths Group (SMIN) 1,531.00p 2.00%
Ashtead Group (AHT) 1,637.00p 1.93%
Shire Plc (SHP) 4,461.00p 1.86%
AstraZeneca (AZN) 4,271.00p 1.84%
BT Group (BT.A) 309.25p 1.78%
Micro Focus International (MCRO) 2,182.00p 1.72%
Morrison (Wm) Supermarkets (MRW) 240.10p 1.69%
Imperial Brands (IMB) 3,731.50p 1.58%

FTSE 100 - Fallers

Provident Financial (PFG) 2,676.00p -1.80%
Mediclinic International (MDC) 771.00p -1.78%
Intu Properties (INTU) 267.20p -1.15%
easyJet (EZJ) 939.50p -1.11%
Smurfit Kappa Group (SKG) 2,061.00p -0.96%
Dixons Carphone (DC.) 313.20p -0.85%
TUI AG Reg Shs (DI) (TUI) 1,157.00p -0.43%
Tesco (TSCO) 193.95p -0.33%
Informa (INF) 650.00p -0.31%
British American Tobacco (BATS) 4,890.00p -0.19%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 169.50p 8.31%
Ferrexpo (FXPO) 159.90p 5.20%
Morgan Advanced Materials (MGAM) 310.80p 3.19%
Evraz (EVR) 230.00p 3.14%
Zoopla Property Group (ZPLA) 376.40p 2.79%
Centamin (DI) (CEY) 161.00p 2.68%
Hunting (HTG) 569.50p 2.52%
Assura (AGR) 53.30p 2.50%
Barr (A.G.) (BAG) 514.50p 2.49%
Petra Diamonds Ltd.(DI) (PDL) 154.80p 2.38%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 1,625.00p -8.76%
Ocado Group (OCDO) 241.70p -3.09%
Henderson Group (HGG) 211.70p -2.89%
Hochschild Mining (HOC) 240.40p -2.47%
Close Brothers Group (CBG) 1,423.00p -1.86%
Computacenter (CCC) 781.50p -1.45%
Aberdeen Asset Management (ADN) 258.30p -1.45%
Euromoney Institutional Investor (ERM) 1,103.00p -1.43%
Mitie Group (MTO) 197.90p -1.40%
Workspace Group (WKP) 744.50p -1.39%