London midday: Upbeat readings on global manufacturing boost stocks

Rio Tinto

5,201.00p

17:00 07/11/24

3.13%

158.00p

Stocks in London have shaken off early losses, helped by the release of a much better than expected reading on euro area factory activity last month and similarly upbeat survey results overnight in China.

FTSE 100

8,140.74

17:09 07/11/24

n/a

FTSE 350

4,495.56

17:10 07/11/24

n/a

FTSE All-Share

4,453.48

16:30 07/11/24

n/a

Mining

11,474.12

17:04 07/11/24

-0.16%

-18.76

A comparable survey for the UK also pointed to a fast recovery in the sector, but as in the rest of Europe, analysts were concerned that any improvement might lack staying power if joblessness didn't follow suit soon.

"Of course, these survey's can be volatile at the best of times and this is far from that," said Oanda's Craig Erlam.

"The risk of further restrictions and lockdowns will continue to be a huge cloud of uncertainty for many industries but after months of disruption, there may be a sense of relief at this data. Whether fears become a reality will depend on how good localized containment efforts turn out to be."

Against that backdrop, as of 11:55 BST the top flight index was adding 0.66% to 5,936.30.

IHS Markit's UK manufacturing sector Purchasing Managers' Index was revised lower from a preliminary reading of 53.6 for July to 53.3 and against the June reading of 50.1.

Samuel Tombs, Pantheon Macroeconomics's chief UK economist, said the figures showed a "rapid" recovery in the sector but he was concerned by the fact that it partly reflected so-called 'pent-up' demand in the wake of the Covid-19 lockdown that "ultimately will fade away by the autumn".

To take note of as well were reports at the weekend of the increasing odds that stricter Covid-19 restrictions could be in the pipeline, both in the UK and the US.

Still high tensions between Beijing and Washington continued in the background meanwhile, with US Secretary of State, Mike Pompeo, signalling at the weekend that the Trump administration was set to clamp down on an array of Chinese state-controlled software manufacturers due to national security concerns.

Still ahead on the economic front, the US Institute for Supply Management's manufacturing PMI was due for release at 1500 BST.

HSBC and Rolls Royce weight on FTSE 100

Lenders' shares were the biggest drag on the FTSE 100 as a group after HSBC posted by a 65% drop in interim profits and warned that it was expecting full-year loan losses of between $8bn - $13bn "given the deterioration in consensus economic forecasts and actual loss experience" during the second quarter.

Rolls Royce was at the bottom of the pile on the top-flight index amid speculation that tighter lockdown restrictions could be on the cards in the US and the UK.

Hargreaves Lansdown on the other hand was at the top of the leaderboard, with its shareholders enjoying a good day as the stock was buoyed by data showing heightened interest in the stock market from millennials.

Rio Tinto was also higher as iron ore futures hit a one-year high during Singapore trading hours, which analysts at SP Angel said were the product of continued stockpiling by Chinese firms, supply worries around Brazil linked to the Covid-19 pandemic in the South American giant and some analysts' forecasts for a small deficit in the market in 2020.

Out on the FTSE 250 meanwhile, Hammerson was unwanted after the property developer confirmed that it was in discussions over a possible disposal of its 50% interest in VIA Outlets to its joint venture partner APG, and was also considering an equity raise via a rights issue.

Also moving lower on the back of talk of a possible tightening in Covid-19 restrictions were the likes of Trainline, Mitchells&Butlers, Carnival, Cineworld and National Express.

Shares of Lloyd's of London insurer Hiscox were also in the red after swinging to a loss in the first half and setting aside $232m for Covid-19 related claims. The company reported a pretax loss of $138.9m (£106m) for the six months to the end of June compared with a $168m profit a year earlier. Gross premiums written fell to $2.236bn from $2.338bn.

Market Movers

FTSE 100 (UKX) 5,938.83 0.70%
FTSE 250 (MCX) 16,967.51 0.21%
techMARK (TASX) 3,733.55 0.51%

FTSE 100 - Risers

Avast (AVST) 596.50p 3.83%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,552.00p 3.66%
Hargreaves Lansdown (HL.) 1,813.00p 3.66%
Fresnillo (FRES) 1,276.50p 3.57%
CRH (CRH) 2,850.00p 3.04%
Ashtead Group (AHT) 2,506.00p 2.92%
Intertek Group (ITRK) 5,526.00p 2.75%
Rio Tinto (RIO) 4,735.50p 2.61%
Smurfit Kappa Group (SKG) 2,600.00p 2.36%
Experian (EXPN) 2,738.00p 2.28%