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(Alliance News) - The FTSE 100 climbed midday Wednesday, with share price gains for miners and oil stocks ensuring the London's blue-chip index outperformed continental peers, following a raft of mixed PMI readings across the globe.
"Experiences throughout Australia, Japan, and Europe highlight a tough June after many surveys fell short. From a UK perspective, the decline in services growth is worrying, with exports falling for the second-consecutive month," IG market analyst Joshua Mahony commented.
"From a UK perspective, the decline in services growth is worrying, with exports falling for the second-consecutive month. One common theme appears to be the impact of rising prices, with input costs rising at the fastest pace in 13 years."
The FTSE 100 index was up 24.87 points, or 0.4%, at 7,114.88 on Wednesday at midday. The mid-cap FTSE 250 index was up just 8.18 points 22,687.82. The AIM All-Share index was up 2.70 points, or 0.2%, at 1,224.85.
The Cboe UK 100 index was up 0.3% at 708.55. The Cboe 250 was 0.1% higher at 20,378.93, and the Cboe Small Companies up 0.4% at 15,348.99.
The UK's flash composite output index, a weighted average of the services and manufacturing readings, remained above the 50.0 no-change mark but fell to a two-month low of 61.7 points in June, from May's 62.9 tally.
Earlier figures showed Japan's private sector remained in contraction, though the eurozone's flash composite PMI increased to 59.2 in June from 57.1 in May, its highest since June 2006.
The pound was quoted at USD1.3967 midday Wednesday following the PMI data, up from USD1.3927 at the London equities close on Tuesday. The euro stood at USD1.1946, up from USD1.1905.
In mainland Europe, the CAC 40 in Paris was down 0.4%, while the DAX 30 in Frankfurt was down 0.5%.
The luxury retail sector held back the blue-chip benchmark in Paris. Kering was down 2.6%, Hermes International 1.6% lower and LVMH fell 1.3%.
In London, Burberry was down 0.1% after HSBC cut the stock to Hold from Buy.
Brent oil was quoted at USD75.44 a barrel, up from USD74.91.
ActivTrades analyst Pierre Veyret explained: "Most oil traders are also paying attention to the ongoing talks with Iran where an agreement with another superpower could quickly lead to a flood in global supply and seriously dent the current rally. Investors will also keep an eye on today's US crude oil inventories where a significant increase is widely expected."
Royal Dutch Shell A shares rose 1.8% in London and the oil major's B stock was up 1.9%. In addition, Societe Generale raised Shell's A shares to Buy from Hold. Peer BP was trading 1.3% higher.
Rio Tinto climbed 1.0%, Anglo American was up 1.1% and BHP rose 0.7% during a largely positive session for the mining sector.
Phoenix Group shares fell 3.3% to 670.20p, the worst blue-chip performer in London. Swiss Re said it has sold a 6.6% stake in Phoenix Group for GBP437 million, offloading half the stake it acquired after selling its ReAssure Group subsidiary to Phoenix last summer.
Swiss Re sold 66.2 million shares at 660p each, and will hold a 6.6% stake following completion of the sale. Prior to the transaction, Swiss Re held a near 13.3% stake in Phoenix Group.
Phoenix was not a party to the placing and will not receive any proceeds.
As Swiss Re's stake has fallen below 10%, it no longer has the right to appoint a non-executive director to the Phoenix board, the FTSE 100-listed long-term savings and retirement business noted. As a result, Christopher Minter will resign from the Phoenix board with effect from the share sale settlement, expected to be around June 25.
The housebuilding sector was lower. Barratt Developments fell 1.7%, Taylor Wimpey gave back 1.4% and Persimmon fell 1.6%.
The UK Competition & Markets Authority said Persimmon and insurer Aviva have committed to refund leasehold homeowners following an industry probe.
Persimmon will allow homeowners to buy the freehold of their home at a discount, while Aviva will remove certain clauses from leasehold contracts and repay those who were affected by them, the regulator said.
Persimmon said all homeowners who have bought a leasehold property since 2000 will be allowed to buy their freehold, for a price capped at GBP2,000. The company also will reimburse customers who already bought their freehold for more than GBP2,000 under an existing scheme.
Aviva, which buys leasehold contracts from housebuilders, has agreed to remove "doubling clauses" and refund those who were affected by them. It will also end ground rents that rise with inflation, meaning those rents will revert to their original price.
Aviva shares were 0.1% lower.
Berkeley fell 1.8%, despite reporting improved annual earnings. The housebuilder cautioned transaction levels in its key London market were hit by travel restrictions and Berkeley's selective approach to market, but was confident as enquiries in the UK capital are now above pre-pandemic levels.
Berkeley's pretax profit in the year ended April 30 was 2.9% higher at GBP518.1 million from GBP503.7 million. Revenue rose 15% to GBP2.20 billion from GBP1.92 billion.
GlaxoSmithKline shares were on the rise, up 1.6%. The pharmaceutical firm outlined a new strategic focus, plans to boost sales and profit in the medium term and a fresh "progressive dividend policy".
In an investor update, GSK said it plans to achieve GBP33 billion in sales by the end of 2031. Over the next five years, it is eyeing a sales climb of more than 5% and more than a 10% hike in adjusted operating profit.
It added it will retain a 20% stake in its upcoming Consumer Healthcare spin-out, a "short-term financial investment, which it intends to monetise in a timely manner".
New York equities are called higher, building on Tuesday's gains. The Dow Jones Industrial Average is called up 0.2%, and both the S&P 500 and Nasdaq Composite are pointed up 0.1%. Federal Reserve Chair Jerome Powell on Tuesday suggested the central bank will only patiently rein in its vast monetary policy support.
Powell stuck to his prepared script during the House hearing and reiterated that the central bank will continue its supportive stance to ensure that the "sustained improvement" since the depths of Covid-19 pandemic is extended.
BDSwiss head of investment research, Marshall Gittler, commented: "Powell didn't say anything different from what he said in his comments after the FOMC meeting: most of the rise in inflation is due to transitory effects arising from the reopening of the economy, but these effects have been larger than they expected and could turn out to be more persistent. He emphasized that the FOMC 'will wait for actual evidence of actual inflation or other imbalances' before hiking rates and not move in response to projections."
Against the yen, the dollar was trading at JPY111.04, up from JPY110.73.
Gold was trading at USD1,783.29 an ounce midday on Wednesday, up against USD1,780.60 late Tuesday.
Wednesday afternoon's economic calendar has the US flash PMI for June at 1445 BST, before new home sales at 1500 BST.
By Eric Cunha; ericcunha@alliancenews.com
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