London open: Stocks rally after upbeat corporate updates; UK manufacturing eyed

London stocks rose in early trade on Thursday, helped along by well-received updates from the likes of AB Foods and Aveva, as investors eyed the latest UK manufacturing data and US jobless claims.

At 0850 BST, the FTSE 100 was up 1% at 7,109.20.

Neil Wilson, market analyst at Markets.com, said: "European stock markets have made a solid start to the second half of the year, making up for yesterday’s losses, whilst Asian shares got the session off to a soft start. Equity indices are looking positive this morning as the FTSE 100 rose 1% and popped above 7,100 again, with the Euro Stoxx 50 and DAX also both +1%, but continue to tread over well-worn ranges.

"European and global stock markets have enjoyed a strong run-up in the last six months as a combination of ultra-loose monetary policy, fiscal largesse and a vaccine-enabled reopening of economies allowed investors to look ahead to a brighter future for earnings and growth. Now there are risks on the horizon, but the market remains biased to the upside."

Investors were digesting the latest manufacturing figures out of China. The Caixin purchasing managers’ index for the sector fell to 51.3 in June from 52.0 in May as new export orders fell, coming in slightly below expectations for reading of 51.9.

Capital Economics said: "The Caixin manufacturing index published today dropped back last month and adds to signs from the official PMI released yesterday that momentum in industry is waning. The surveys point to a levelling off in demand and easing of price pressures, even as supply shortages continue to constrain output."

Coming up later in the day, Markit’s UK manufacturing PMI for June is due at 0930 BST, while US initial jobless claims are at 1330 BST.

In equity markets, industrial software firm Aveva rallied after saying it had a good start to FY22, achieving approximately 10% revenue growth in the first two months of the financial year on an organic constant currency basis.

Associated British Foods was also on the rise after saying it expected annual profit to be in line with the year before as sales at Primark outstripped forecasts in the third quarter.

JD Sports gained after it said it was on track to deliver annual profits of at least £550m as it pledged to split the roles of chief executive and chairman and would consider paying back government furlough cash.

On the downside, Micro Focus fell despite saying that its first-half revenue performance was ahead of expectations.

AO World lost ground even as the online electricals retailer reported a jump in full-year profits and revenue as it continues to benefit to a shit to online shopping since the pandemic.

Market Movers

FTSE 100 (UKX) 7,109.20 1.02%
FTSE 250 (MCX) 22,585.22 0.93%
techMARK (TASX) 4,477.64 0.72%

FTSE 100 - Risers

Fresnillo (FRES) 802.20p 3.97%
Associated British Foods (ABF) 2,298.00p 3.70%
Aveva Group (AVV) 3,845.00p 3.69%
JD Sports Fashion (JD.) 945.00p 2.83%
Rolls-Royce Holdings (RR.) 101.62p 2.73%
International Consolidated Airlines Group SA (CDI) (IAG) 178.86p 2.66%
Evraz (EVR) 606.40p 2.43%
Compass Group (CPG) 1,558.00p 2.37%
Melrose Industries (MRO) 158.35p 2.10%
Smith (DS) (SMDS) 426.50p 2.06%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 558.20p -2.62%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,606.00p -1.29%
Admiral Group (ADM) 3,120.00p -0.76%
SEGRO (SGRO) 1,088.00p -0.59%
Burberry Group (BRBY) 2,063.00p -0.15%
Spirax-Sarco Engineering (SPX) 13,600.00p -0.11%
Royal Mail (RMG) 576.80p -0.10%
London Stock Exchange Group (LSEG) 7,966.00p -0.05%
Scottish Mortgage Inv Trust (SMT) 1,331.00p 0.00%
Hargreaves Lansdown (HL.) 1,589.50p 0.03%

FTSE 250 - Risers

Indivior (INDV) 162.00p 4.79%
NCC Group (NCC) 306.00p 4.08%
FirstGroup (FGP) 84.90p 3.66%
Petropavlovsk (POG) 24.52p 3.63%
Herald Investment Trust (HRI) 2,255.00p 3.44%
PZ Cussons (PZC) 252.00p 3.07%
Grafton Group Ut (CDI) (GFTU) 1,181.00p 2.96%
easyJet (EZJ) 920.60p 2.88%
Ascential (ASCL) 427.80p 2.84%
Mitchells & Butlers (MAB) 286.40p 2.80%

FTSE 250 - Fallers

Micro Focus International (MCRO) 527.00p -3.66%
AO World (AO.) 248.60p -1.74%
Liontrust Asset Management (LIO) 1,848.00p -1.70%
Morrison (Wm) Supermarkets (MRW) 243.20p -1.42%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,606.00p -1.29%
Workspace Group (WKP) 826.00p -0.96%
Watches of Switzerland Group (WOSG) 828.00p -0.96%
Premier Foods (PFD) 108.60p -0.91%
Chrysalis Investments Limited NPV (CHRY) 244.00p -0.81%
Murray International Trust (MYI) 1,174.00p -0.68%