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(Alliance News) - Stock prices in London continued to march higher at midday on Friday, now fully recovered from the coronavirus pandemic trough seen last year, while the flurry of activity in the IPO market showed no signs of abating.
The FTSE 100 index was up 49.86 points, or 0.7%, at 7,033.36 - breaching 7,000 points for the first time since February 2020.
The mid-cap FTSE 250 was up 86.95 points, or 0.4%, at 22,558.99, having hit a fresh record high of 22,587.28 in early trade. The AIM All-Share index was up just 0.88 of a point at 1,249.01.
The Cboe UK 100 index was up 0.6% at 700.40. The Cboe 250 was up 0.4% at 20,177.30. The Cboe Small Companies was flat at 14,566.45.
In mainland Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.7% and 1.0% respectively.
"While the FTSE 100 continues to be a laggard in international terms, the fact it has broken through the 7,000 mark for the first time since February last year can be read as a sign of cautious optimism among investors. The UK's blue-chip index is now more than 40% higher than it was at the worst of last year's sell-off, although growth has stagnated in the past week or so," said eToro's Adam Vettese.
"The FTSE 100 is often derided for its 'old world' constituents, but it is these miners, banks, oil companies and airlines that will power the recovery, and investors are beginning to wake up to that. Add in the fact that UK shares are looking relatively cheap when compared with other developed markets, and the investment case becomes quite compelling," Vettese added.
China's economy expanded at its fastest pace on record in the first quarter of 2021, data showed, in a sharp turnaround from the historic contraction caused by the coronavirus outbreak last year.
The 18% explosion in gross domestic product from a year ago was the fastest pace of economic growth since quarterly records began three decades ago, accelerating sharply from growth of 6.5% in the fourth quarter of 2020.
The world's second largest economy was the only major one to grow at all in 2020, supported by strong retail spending and industrial activity as well as better-than-expected exports as the coronavirus hit markets around the world.
IG Group's Josh Mahony said: "An overnight data surge out of China provided a fresh insight into just how the Asian powerhouse continues to lead the world out of the pandemic. Much of the reason behind today's incredible 18.3% GDP reading is the basing effect that comes as [first quarter] 2021 is compared with the now historic first three-months of 2020.
"However, there is no doubt that China has led the world in both suppressing the virus and stimulating their economy to outperform throughout this pandemic. A significant part of the Chinese outperformance comes through their reliance on manufacturing, which has been the benefactor of stimulus in a world of services-sector lockdowns."
In the FTSE 100, Experian was up 2.2%, after Goldman Sachs upgraded the credit checking agency to Buy from Neutral.
Miners were giving the large-cap index a boost following the China economic data, with Anglo American up 2.1%, Rio Tinto up 1.6%, Antofagasta up 1.5%, and BHP up 0.5%.
Ocado Group was 1.7% higher after the online grocer said it has launched a commercial partnership with Oxbotica to collaborate on hardware and software interfaces for autonomous vehicles.
Ocado expects to see the first prototypes of some early use cases for autonomous vehicles within two years. Under the terms, Ocado will invest GBP10 million in Oxbotica as part of Oxbotica's latest Series B equity funding round and will also take a seat on Oxbotica's board.
In the FTSE 250, WH Smith was the best performer, up 3.7%, after RBC Capital upgraded the books and stationery retailer to Outperform from Sector Perform.
At the other end of the midcaps, TI Fluid Systems was the worst performer, down 5.5% at 291.00p. Goldman Sachs placed 54.4 million shares in the automotive fluid systems manufacturer at 280p to raise GBP146.8 million. The shares were sold on behalf of Bill Kozyra and BC Omega, which retains a 44% stake.
Dixons Carphone was 1.9% lower after RBC downgraded the electrical goods and mobile phone retailer to Sector Perform from Outperform.
Grafton Group was 1.7% lower, surrendering earlier gains. The Irish building materials firm said it is mulling the potential sale of its UK traditional merchant businesses, as part of a strategic review.
On the IPO front, NFT Investments, which invests in non-fungible tokens, said its IPO raise of GBP35 million was a record for the Aquis Stock Exchange. NFT said the placing was oversubscribed with an order book in excess of GBP100 million. It was trading on AQSE on Friday at 4.5 pence, down 10% from its listing price of 5.0p.
The IPO market in London is in good health so far this year after many firms abandoned plans to list in 2020 due to the coronavirus crisis.
musicMagpie on Friday became the latest firm to announce plans for a listing on AIM. musicMagpie is to raise GBP15 million for company and GBP95 million for selling shareholders in its initial public offering. Based on the placing price of 193 pence, it expects a market capitalisation of GBP208 million on admission. The company expects to start trading on AIM on Thursday next week.
Founded in 2007, musicMagpie provides 're-commerce' of consumer technology, including smartphones, tablets, consoles and computers. It has an established presence in the UK, with operations in Stockport and Manchester, and in the US in Atlanta, Georgia.
Additionally, Sky News reported on Thursday that investment bank Peel Hunt is considering an initial public offering in London, 20 years after it was taken private. Peel Hunt has appointed Evercore as adviser for a possible flotation that could value it at GBP350 million, Sky News said, citing "insiders".
Fintech Wise is in talks with UK regulators over going public via a direct listing, the Financial Times reported.
Wise, formerly known as TransferWise, is aiming to list in June and has been discussing the mechanics of a direct listing with the UK Financial Conduct Authority, the FT reported, citing people close to the company.
One of the people said the timing and structure of the deal were not finalised yet, but the company had decided on a direct listing in London as its preferred route.
The pound was quoted at USD1.3788 at midday Friday, unchanged from its price at the London equities close on Thursday.
The euro was priced at USD1.1985, up from USD1.1965. Against the Japanese yen, the dollar was quoted at JPY108.75, little changed from JPY108.71.
Brent oil was trading at USD67.18 a barrel Friday at midday, up sharply from USD66.58 late Thursday.
New York stock market futures were pointed mostly higher, following a record close on Thursday, supported by buoyant economic data and a strong start to the US earnings season.
The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.1% and the Nasdaq Composite down 0.1%.
Ahead, investment bank Morgan Stanley will round off major bank earnings when it reports first-quarter results before the opening bell in New York. The stock was up 0.7% in pre-market trade.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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