London midday: Stocks rise as OPEC meeting begins

London stocks gained on Thursday as OPEC members started their meeting in Vienna to address the global supply glut.

Oil prices rose on suggestions that OPEC may discuss an output ceiling, with Brent crude rising above the $50 per barrel mark earlier in the session. However, this looked unlikely as Iran, having just emerged from the yoke of international sanctions, was keen to boost production to generate much needed revenue and therefore would not agree to any cap.

At 1114 BST, Brent crude rose 0.16% to $49.80 per barrel and West Texas Intermediate increased 0.10% to $49.06 per barrel.

Traders are also looking ahead to a report on US weekly crude inventories from the International Energy Agency at 1600 BST.

Meanwhile, the European Central Bank announces its latest policy decision at 1245 BST followed by a press conference with President Mario Draghi at 1330 BST.

The central bank is expected to keep policy unchanged so economists will be more interested in the ECB’s latest economic and inflation forecasts.

“Interestingly oil may well play a key part in the ECB’s press conference later today,” said Connor Campbell, financial analyst at Spreadex. “Analysts are expecting the central bank to revise the Eurozone’s inflation forecasts higher, in part due to the black stuff’s recent rallies.”

Closer to home, data showed the pace of UK construction slowed more than expected in May as many firms held off on placing orders until after the EU referendum on 23 June.

The Markit/CIPS UK construction purchasing managers’ index fell to 51.2 from 52.0 in April, missing expectations for a reading of 51.9 but above the 50 level that separates an expansion from a contraction.

In Asia, Bank of Japan board member Takehiro Sato criticised the central bank's negative interest rate policy as counter-productive.

Sato called on the BOJ to enact policy measures that will have a long-term effect on beating deflation. He also slammed the 2% inflation target, saying rising prices without wage gains would hurt consumption.

Across the Atlantic, the US private payrolls report from ADP at 1315 BST and initial jobless claims figures at 1330 BST will be in focus ahead of the all-important non-farm payrolls data on Friday.

The Federal Reserve is monitoring the health of the labour market as it determines the timing of its next interest rate hike. The Fed announces its next policy measures following its 14-15 June meeting.

On the corporate front, oil producers advanced on the back of higher crude prices. BP, Royal Dutch Shell and Tullow Oil rallied.

Johnson Matthey advanced as it reported a 6% increase in full year revenue and said performance in the 2016/17 fiscal year is expected to be ahead of 2015/16 and in line with current market expectations.

Wolseley was under pressure after Canaccord Genuity downgraded the stock to ‘hold’ from ‘buy’ and slashed its target price to 4,200p from 4,400p.

Marks & Spencer dropped after UBS cut its price target to 440p from 490p and reduced its pre-tax profit for fiscal year 2017 by 12% to £625m due to the company’s plans to lower prices at its clothing business.

Moneysupermarket.com slumped as Jefferies downgraded the stock to ‘hold’ from ‘buy’ and cut the price target to 312p from 440p.

Market Movers

FTSE 100 (UKX) 6,212.70 0.34%
FTSE 250 (MCX) 17,052.47 -0.05%
techMARK (TASX) 3,111.50 -0.02%

FTSE 100 - Risers

Johnson Matthey (JMAT) 2,905.00p 2.76%
GKN (GKN) 282.90p 2.43%
Standard Chartered (STAN) 534.60p 2.35%
Barclays (BARC) 183.50p 1.97%
International Consolidated Airlines Group SA (CDI) (IAG) 535.00p 1.81%
Ashtead Group (AHT) 978.00p 1.77%
Next (NXT) 5,380.00p 1.61%
Royal Bank of Scotland Group (RBS) 243.20p 1.50%
Royal Dutch Shell 'B' (RDSB) 1,688.00p 1.44%
BP (BP.) 358.30p 1.33%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 188.50p -4.65%
National Grid (NG.) 963.80p -4.15%
Marks & Spencer Group (MKS) 358.20p -3.42%
Wolseley (WOS) 3,779.00p -1.28%
RSA Insurance Group (RSA) 484.60p -1.14%
DCC (DCC) 6,295.00p -1.02%
Associated British Foods (ABF) 2,903.00p -0.85%
Admiral Group (ADM) 1,960.00p -0.71%
Provident Financial (PFG) 2,854.00p -0.66%
Smith & Nephew (SN.) 1,169.00p -0.60%

FTSE 250 - Risers

Tullow Oil (TLW) 238.20p 3.16%
Amec Foster Wheeler (AMFW) 440.70p 2.27%
Weir Group (WEIR) 1,196.00p 2.05%
Ocado Group (OCDO) 275.10p 1.59%
Wood Group (John) (WG.) 626.50p 1.46%
Euromoney Institutional Investor (ERM) 943.50p 1.45%
Hastings Group Holdings (HSTG) 183.60p 1.44%
TalkTalk Telecom Group (TALK) 242.20p 1.38%
JRP Group (JRP) 141.90p 1.36%
FirstGroup (FGP) 107.60p 1.32%

FTSE 250 - Fallers

Moneysupermarket.com Group (MONY) 310.30p -6.25%
Laird (LRD) 342.80p -3.27%
Marshalls (MSLH) 313.40p -2.97%
Investec (INVP) 458.70p -2.67%
NCC Group (NCC) 278.40p -2.66%
Evraz (EVR) 110.50p -2.47%
Brown (N.) Group (BWNG) 234.50p -2.29%
Clarkson (CKN) 2,250.00p -1.92%
Beazley (BEZ) 360.00p -1.69%
HarbourVest Global Private Equity Limited A Shs (HVPE) 928.00p -1.59%