London midday: Stocks higher ahead of stimulus talks in US, talk of Brexit breakthrough

Overnight, White House chief of staff, Mark Meadows, told reporters aboard Air Force One that the latest offer from the Trump administration is "certainly above the $1.5 trn that has been articulated to date", versus the $2.2trn proposed by Democrats.

With Democrats and Republicans set to sit down for negotiations again on Thursday, Craig Erlam, senior market analyst at Oanda, said: "Whether it actually yields anything is another thing but there's more optimism around a pre-election stimulus package than there was a week ago and that's obviously great news for investors.

"The recovery has far exceeded expectations in the US but there's still a long way to go and a failure to agree a stimulus package will be hugely detrimental to the economy. A poor jobs report may force Congress to compromise, under pressure from the White House, with a self-imposed stalled recovery being the last thing Trump needs going into election day."

As of 1259 BST, the FTSE 100 was 35.29 points or 0.61% higher at 5,901.65, while the second-tier index was putting on 0.45% or 77.29 points to 17,392.42.

Also on Wednesday evening, Trump had signed the stop gap spending bill needed to tidy government over until 11 December.

There was also some positive news to be had on the Brexit front, with analysts highlighting a Financial Times report of a breakthrough in negotiations between the UK and European Union over state aid rules - which in theory left fishing rights as the sole potential stumbling block.

Potentially of enormous import, the chief executive officer of Moderna, one of the front-runners to develop a Covid-19 vaccine, earlier told the FT that it would not be ready by the 3 November elections in the US.

However, while submission for approval under expedited emergency use authorisation would not be sought before 25 November - at the earliest - he believed that full-scale public distribution might be possible in spring 2021.

Closer to home, IHS Markit's factory sector Purchasing Managers' Index for September was revised lower from a preliminary reading of 54.3 to 54.1, while that for the single currency bloc was confirmed at 53.7.

Still ahead, a barrage of high-frequency data was due out in the States starting from 1330 BST, including for weekly jobless claims, manufacturing and vehicle sales, together with a reading on personal incomes and spending in September.

A speech from European Central Bank chief economist, Philip Lane, at 1645 BST, will likely be also closely monitored after his boss at the ECB, Christine Lagarde, floated the possibility of reviewing the monetary authority's inflation target just the day before.

Covid-19 vaccines in focus at quarter's start

America's main health regulator, the Food and Drug Administration, has widened its investigation into the adverse event related to one patient in AstraZeneca's ongoing phase three clinical trial of its Covid-19 vaccine candidate, Reuters reported, which remains on hold in the States. While the expanded probe increases the chances of longer delays before a potential restart of the trial in that country, it does mean that the FDA thinks there were safety issues linked to the vaccine, rather that it intends to be through.

Aircraft engine maker Rolls-Royce has unveiled plans to raise at least £3bn to shore up its balance sheet in the face of the coronavirus pandemic. The company on Thursday announced a 10-for-three £2bn rights issue and £1bn bond offering. It has also agreed a new £1bn two-year term loan facility conditional upon the rights issue completing. Roll-Royce has been hammered particularly hard by the collapse in air travel as it is paid by the number of miles flown by aircraft using its engines.

Medical technology company Smith & Nephew announced on Thursday that it is expecting a third quarter underlying revenue decline of about 4%. The FTSE 100 company said all three of its franchises showed “significant” recovery, following an overall underlying revenue decline of 29.3% for the second quarter. It said the improvement was strongest in its orthopaedics franchise, as global levels of elective surgery continued to recover.

Market Movers

FTSE 100 (UKX) 5,901.10 0.60%
FTSE 250 (MCX) 17,410.30 0.55%
techMARK (TASX) 3,774.77 0.84%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 3,148.00p 3.55%
Smiths Group (SMIN) 1,423.50p 3.53%
Coca-Cola HBC AG (CDI) (CCH) 1,979.00p 3.50%
SSE (SSE) 1,245.00p 3.06%
Standard Life Aberdeen (SLA) 232.90p 3.05%
Smith (DS) (SMDS) 303.60p 3.02%
Melrose Industries (MRO) 118.90p 2.94%
M&G (MNG) 163.75p 2.66%
SEGRO (SGRO) 956.20p 2.55%
Associated British Foods (ABF) 1,914.00p 2.49%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 115.95p -10.81%
Ocado Group (OCDO) 2,572.00p -6.27%
DCC (DCC) 5,748.00p -4.33%
International Consolidated Airlines Group SA (CDI) (IAG) 92.00p -3.18%
Royal Dutch Shell 'B' (RDSB) 920.80p -2.06%
Royal Dutch Shell 'A' (RDSA) 944.50p -2.01%
BP (BP.) 221.80p -1.51%
InterContinental Hotels Group (IHG) 4,035.00p -1.44%
British American Tobacco (BATS) 2,738.50p -1.40%
GVC Holdings (GVC) 962.80p -1.15%

FTSE 250 - Risers

Liontrust Asset Management (LIO) 1,325.00p 6.85%
Greencore Group (GNC) 103.70p 5.82%
Premier Foods (PFD) 97.20p 5.08%
Clarkson (CKN) 2,360.00p 4.42%
Greggs (GRG) 1,226.00p 4.34%
Aggreko (AGK) 383.00p 3.57%
Unite Group (UTG) 868.00p 3.46%
Bodycote (BOY) 602.50p 3.43%
Oxford Instruments (OXIG) 1,642.00p 3.14%
Avon Rubber (AVON) 4,380.00p 3.06%

FTSE 250 - Fallers

Network International Holdings (NETW) 260.00p -4.83%
Britvic (BVIC) 785.00p -4.38%
TP ICAP (TCAP) 219.60p -3.77%
Pets at Home Group (PETS) 407.00p -3.74%
Aston Martin Lagonda Global Holdings (AML) 49.12p -3.59%
Hiscox Limited (DI) (HSX) 865.80p -3.09%
Helios Towers (HTWS) 151.80p -3.07%
4Imprint Group (FOUR) 1,812.00p -3.00%
Capita (CPI) 29.74p -2.72%
Micro Focus International (MCRO) 240.10p -2.44%