London midday: Stocks hold on to gains before US CPI, Vodafone continues to rise

Strong gains from Vodafone, HSBC and a host of stocks in the mining sector were supporting markets in London.

The FTSE 100 was up 0.37% at 7,039.32 by midday, on track for its highest close since 8 May when it settled at 7,046.82.

Along with key speeches from central bank heads Mario Draghi, Mark Carney and Janet Yellen on Friday, the US consumer price index (CPI) at 13:30 is likely to steal the spotlight. The US CPI print is forecast to show that the annual rate of inflation worsened to -0.2% in April from -0.1% in March.

"After noted dove John Williams, head of the Federal Reserve Bank of San Francisco, ducked questions over the rate hike outlook in a speech last night, investors will be eager to note the direction of the USA’s inflation figure, which holds a key role in the interest rate debate," said Spreadex analyst Connor Campbell.

Data released during the morning showed that the UK budget deficit narrowed in April from last year. Public sector net borrowing excluding state-controlled banks fell 27% from a year earlier to £6.8bn, compared with economists’ expectations for a shortfall of £8.1bn, thanks to stronger tax receipts.

Meanwhile, the German Ifo business climate index nudged down to 108.5 in May from 108.6 in April, marking its first drop since October last year, but still a touch ahead of analysts’ expectations for a reading of 108.3.

Vodafone continues to rise, HSBC gains

Vodafone's stock continued its surge this week as speculation continues about a merger or partial take over by Liberty Global. Positive comments from the likes of Goldman Sachs and Deutsche Bank about Vodafone's recent results were also seen helping the shares on Friday.

HSBC rose after confirming rumours that it is looking at a possible disposal of its Brazilian operations, though it has not yet made a decision. Recent reports suggested that Banco Santander's Brazilian unit could be a potential buyer.

Mining stocks were snapped up, with Anglo American, BHP Billiton and Fresnillo all on the rise as metal prices advanced. BHP was also up after Investec upgraded the shares to 'hold'.

Oil major BP was also on the rise after analysts at JPMorgan Cazenove lifted their stance on the stock to 'neutral' and raised their target price from 410p to 450p.

Shareholders of Costa and Premier Inn owner Whitbread gave a cool reaction to the news that the company has appointed Alison Brittain, current head of Lloyds's high street banking division, as its new chief executive.

Utility company Severn Trent disappointed with a 53.5% drop in full-year pre-tax profit, pointing to a fair value loss on financial instruments, largely due to lower expectations for future interest rates and an exceptional tax credit in the previous year.

Shares of building materials peers Wolseley, Travis Perkins, Howden Joinery and Grafton Group were all on the rise after Jefferies upgraded all four stocks by two notches from 'underperform' to 'buy'.

Market Movers
techMARK 3,301.79 +0.47%
FTSE 100 7,039.32 +0.37%
FTSE 250 18,211.39 +0.31%

FTSE 100 - Risers
Vodafone Group (VOD) 252.05p +3.94%
Anglo American (AAL) 1,078.00p +1.79%
Randgold Resources Ltd. (RRS) 4,793.00p +1.70%
BHP Billiton (BLT) 1,428.00p +1.67%
Fresnillo (FRES) 773.50p +1.64%
Dixons Carphone (DC.) 468.10p +1.43%
Rio Tinto (RIO) 2,912.50p +1.36%
Travis Perkins (TPK) 2,204.00p +1.29%
Weir Group (WEIR) 1,940.00p +1.25%
AstraZeneca (AZN) 4,471.50p +1.05%

FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 545.00p -1.62%
Severn Trent (SVT) 2,149.00p -1.51%
BT Group (BT.A) 453.60p -1.21%
Tesco (TSCO) 219.10p -0.72%
3i Group (III) 556.00p -0.71%
easyJet (EZJ) 1,599.00p -0.68%
Pearson (PSON) 1,333.00p -0.67%
Whitbread (WTB) 5,230.00p -0.57%
Hargreaves Lansdown (HL.) 1,270.00p -0.55%
InterContinental Hotels Group (IHG) 2,749.00p -0.54%

FTSE 250 - Risers
Just Eat (JE.) 450.30p +3.85%
Zoopla Property Group (WI) (ZPLA) 230.30p +3.18%
Kaz Minerals (KAZ) 250.60p +3.13%
Vedanta Resources (VED) 653.50p +2.91%
Evraz (EVR) 185.90p +2.59%
Halfords Group (HFD) 488.70p +2.45%
Paragon Group Of Companies (PAG) 439.90p +2.37%
Tullett Prebon (TLPR) 393.00p +2.18%
Howden Joinery Group (HWDN) 511.00p +2.10%
Dairy Crest Group (DCG) 497.00p +2.03%

FTSE 250 - Fallers
Clarkson (CKN) 2,425.00p -1.90%
Computacenter (CCC) 717.50p -1.58%
Greencore Group (GNC) 347.90p -1.42%
Countrywide (CWD) 576.50p -1.28%
Laird (LRD) 374.90p -1.19%
Playtech (PTEC) 833.50p -1.13%
Cranswick (CWK) 1,576.00p -1.13%
Kier Group (KIE) 1,294.00p -0.99%
QinetiQ Group (QQ.) 236.90p -0.96%
Ophir Energy (OPHR) 135.80p -0.95%