London midday: Travel shares pace advance ahead of Fed announcement

London stocks had extended gains by midday on Wednesday, boosted by a strong performance from the travel sector, as investors eyed the latest policy announcement from the US Federal Reserve.

The FTSE 100 was up 1.7% at 7,495.24.

Russ Mould, investment director at AJ Bell, said: "With today’s US Federal Reserve meeting firmly in view the UK’s flagship stock index has become somewhat dislocated from other global benchmarks thanks to the absence of big technology companies in its ranks.

"For years this under-representation for tech held the FTSE 100 back, now the dominance of relatively cheap tobacco, resources and banking stocks is playing in its favour. For the year to date it is up slightly while the Nasdaq in the US is down double digits.

"How long this trend continues remains to be seen. The Fed’s update comes with the first US rate hike, perhaps of four or five this year, expected in March.

"It remains to be seen if its members will do anything to calm the recent volatility in the markets, particularly given the current tensions between Russia and the Ukraine.

"While its primary job is to keep a lid on inflation, the Fed has shown a willingness in the past to consider the market response when determining its policy."

In equity markets, travel-related shares were the standout performers after the government confirmed that Covid testing will be scrapped for double-jabbed travellers arriving in England. BA and Iberia owner IAG, InterContinental Hotels, Premier Inn owner Whitbread and engine maker Rolls-Royce all rose, along with cruise operator Carnival and travel firm Tui.

EasyJet was also a high riser, with the added benefit of an upgrade to ‘buy’ from ‘hold’ at Stifel.

Pets at Home gained as it upgraded its full-year profit expectations following "continued growth momentum" in the third quarter. It now expects FY22 group underlying pre-tax profit to be at least £140m, compared to analyst expectations of £134m to £137m.

Online trading platform CMC Markets was up after it backed its full-year guidance as it said its performance in the third quarter was in line with expectations.

On the downside, gambling software maker Playtech fell after it again urged shareholders to accept a £2.7bn takeover offer from Australia’s Aristocrat Leisure following reports that it is planning a breakup and sale of the group if the bid is blocked by a bloc of Asia-based investors. Sky News reported that Playtech's directors and its investment banking advisers are discussing dismantling the group, citing unnamed sources.

Precious metals miner Fresnillo tumbled as it cut its production guidance, citing operational challenges and new labour laws.

Market Movers

FTSE 100 (UKX) 7,495.24 1.68%
FTSE 250 (MCX) 21,964.73 1.47%
techMARK (TASX) 4,403.83 1.19%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 157.80p 6.65%
Aveva Group (AVV) 2,879.00p 4.69%
Prudential (PRU) 1,267.50p 4.02%
Shell 'A' (RDSA) 1,883.60p 4.02%
Shell 'B' (RDSB) 1,884.80p 4.02%
ITV (ITV) 112.60p 3.92%
Barclays (BARC) 204.20p 3.81%
Scottish Mortgage Inv Trust (SMT) 1,080.50p 3.74%
Compass Group (CPG) 1,686.00p 3.66%
Glencore (GLEN) 402.85p 3.57%

FTSE 100 - Fallers

Fresnillo (FRES) 715.00p -11.18%
Sage Group (SGE) 731.80p -4.01%
Unilever (ULVR) 3,863.50p -1.84%
Royal Mail (RMG) 436.30p -1.36%
Reckitt Benckiser Group (RKT) 6,277.00p -1.17%
Pearson (PSON) 614.80p -0.68%
Coca-Cola HBC AG (CDI) (CCH) 2,442.00p -0.33%
Dechra Pharmaceuticals (DPH) 3,988.00p -0.15%
London Stock Exchange Group (LSEG) 7,412.00p 0.03%
Rentokil Initial (RTO) 514.20p 0.08%

FTSE 250 - Risers

JTC (JTC) 762.00p 5.69%
Carnival (CCL) 1,397.80p 5.19%
Virgin Money UK (VMUK) 191.85p 5.01%
TUI AG Reg Shs (DI) (TUI) 258.20p 4.96%
Allianz Technology Trust (ATT) 281.00p 4.85%
CMC Markets (CMCX) 240.50p 4.34%
Baillie Gifford US Growth Trust (USA) 230.00p 4.31%
Wizz Air Holdings (WIZZ) 4,441.00p 4.30%
easyJet (EZJ) 629.60p 4.27%
Edinburgh Worldwide Inv Trust (EWI) 232.00p 4.27%

FTSE 250 - Fallers

Quilter (QLT) 138.70p -3.51%
Domino's Pizza Group (DOM) 388.60p -1.62%
PZ Cussons (PZC) 193.80p -1.22%
Hilton Food Group (HFG) 1,042.00p -0.95%
BB Healthcare Trust (Red) (BBH) 167.20p -0.95%
Playtech (PTEC) 636.00p -0.86%
Centamin (DI) (CEY) 93.04p -0.81%
Workspace Group (WKP) 864.00p -0.80%
Ultra Electronics Holdings (ULE) 2,974.00p -0.60%
TBC Bank Group (TBCG) 1,416.00p -0.56%