London midday: Positive UK and China services PMI boost equities

The latest Markit/CIPS UK survey showed the purchasing managers’ index monitoring growth in the UK services sector rose from 53.3 in September to 54.9 last month, registering its first increase since June and remaining above the 50 threshold that indicates expansion for the 34th consecutive month. Analysts had been expecting a reading of 54.5.

“The slight bounce-back in the Markit/CIPS services survey in October brought more evidence of what we expect will be a rebound in growth in the fourth quarter, after the slowdown in the third quarter, Capital Economics said in a note.

Providing another boost to investor sentiment, Caixin’s PMI on China services rose to 52 in October from 50.2. It comes in contrast to Monday’s manufacturing PMI which showed a contraction in October activity.

The final estimate of US services PMI is due at 1445 GMT, while ISM will reveal its non-manufacturing composite at October.

Meanwhile, ADP releases its employment report at 1315 GMT and analysts expect it to show the US added 180,000 jobs in October.

While the private payrolls report is not seen as important as the government’s monthly non-farm payrolls figures, it may provide some clues to the latter ahead of its Friday release.

The Federal Reserve will be scrutinising the data as it determines the best timing for an interest rate hike.

Fed speakers, including chief Janet Yellen and officials Lael Brainard and William Dudley, may offer hints on rates later on Wednesday.

“While Ms Yellen’s thoughts will be of particular interest markets will also be focussing on the view of Ms Brainard given how dovish she was in her previously reported comments, and whether she still believes that economic risks are ‘tilted to the downside’,” said Michael Hewson, chief market analyst at CMC Markets.

In company news, Glencore surged after reporting “significant progress” on plans to cut net debt to the low $20bns by the end of 2016 and increased output from its mines generally in line with estimates.

Other mining stocks were given a lift on reports that Chinese authorities will open a trading link between Shenzhen and Hong Kong this year. Anglo American, Antofagasta, BHP Billiton and Rio Tinto were among the risers. An increase in gold, silver and copper prices on the Comex was also positive for the sector.

Marks & Spencer gained after reporting an increase in first half profit as strong food counterbalanced weak clothing sales.

Legal & General rallied as it posted a 14% rise in net cash generation for the first nine months of the year as it said it is ahead of its target to deliver £80m of operating cost savings this year.

Ryanair flew higher after posting record October passenger numbers.

Wizz Air Holdings declined after announcing its chief financial officer was stepping down and saying that while third quarter bookings were robust it had limited visibility over the final period.

Countrywide slumped after saying the slow pace of recovery in housing sales transactions will most likely result in volumes for the year being at least 5% below 2014 at 950,000 in total. “We anticipate our EBITDA for full year will be less than £121.1 million achieved in 2014”.

Market Movers

FTSE 100 (UKX) 6,457.18 1.15%
FTSE 250 (MCX) 17,253.52 0.38%
techMARK (TASX) 3,094.16 0.56%

FTSE 100 - Risers

Glencore (GLEN) 128.65p 7.70%
Anglo American (AAL) 604.60p 7.60%
BHP Billiton (BLT) 1,103.50p 4.25%
Antofagasta (ANTO) 555.00p 3.64%
Rio Tinto (RIO) 2,430.00p 3.51%
Marks & Spencer Group (MKS) 537.00p 3.17%
Fresnillo (FRES) 751.00p 3.09%
Standard Chartered (STAN) 685.50p 2.93%
Morrison (Wm) Supermarkets (MRW) 175.90p 2.93%
Aberdeen Asset Management (ADN) 366.30p 2.92%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 3,082.00p -3.57%
Taylor Wimpey (TW.) 181.60p -3.25%
Persimmon (PSN) 1,871.00p -2.60%
Barratt Developments (BDEV) 574.00p -2.13%
Meggitt (MGGT) 366.30p -1.82%
Whitbread (WTB) 4,751.00p -1.70%
Hammerson (HMSO) 617.00p -0.72%
British Land Company (BLND) 851.50p -0.64%
GKN (GKN) 292.30p -0.54%
Intu Properties (INTU) 342.00p -0.41%

FTSE 250 - Risers

Premier Oil (PMO) 87.65p 7.68%
Petrofac Ltd. (PFC) 894.50p 6.24%
Amec Foster Wheeler (AMFW) 770.50p 6.20%
Drax Group (DRX) 281.40p 6.07%
Wood Group (John) (WG.) 638.00p 5.11%
Hunting (HTG) 384.60p 4.74%
Kaz Minerals (KAZ) 127.40p 4.08%
Weir Group (WEIR) 1,182.00p 3.96%
Ophir Energy (OPHR) 105.90p 3.72%
Electrocomponents (ECM) 220.70p 3.62%

FTSE 250 - Fallers

Countrywide (CWD) 416.40p -10.45%
Foxtons Group (FOXT) 186.10p -6.95%
TalkTalk Telecom Group (TALK) 238.40p -6.40%
Wizz Air Holdings (WIZZ) 1,831.00p -5.18%
Wetherspoon (J.D.) (JDW) 736.50p -5.09%
Redrow (RDW) 429.30p -2.98%
Marston's (MARS) 156.70p -2.97%
Enterprise Inns (ETI) 103.20p -2.73%
Bellway (BWY) 2,458.00p -2.69%
Bovis Homes Group (BVS) 961.00p -2.68%