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(Alliance News) - Gold miners led the charge higher on Wednesday in London after the precious metal smashed the USD2,000 mark and continued to climb, aided by a weaker dollar.
The FTSE 100 index closed up 68.72 points, or 1.1%, at 6,104.72. The FTSE 250 ended up 330.60 points, or 1.9%, at 17,638.30, and the AIM All-Share closed up 42.64 points, or 1.3%, at 3,398.94.
The Cboe UK 100 ended up 1.2% at 607.68, the Cboe UK 250 closed up 2.3% at 14,977.79, and the Cboe Small Companies ended up 0.9% at 9,208.32.
"With its miners in full swing – benefiting from another record-breaking, USD2,000 per ounce-crossing performance from gold – and oil up on a drop in US inventories, the FTSE matched the Dow Jones's 1% rise," said Connor Campbell at Spreadex.
He added: "Bruised, but not broken, by the morning's service PMIs disappointments, the eurozone indices remained in the green on Wednesday, but lagged behind their UK and US peers."
In European equities on Wednesday, the CAC 40 in Paris ended up 0.9%, while the DAX 30 in Frankfurt ended up 0.5%.
The eurozone's private sector economy grew at the fastest pace in over two years in July, data from IHS Markit on Wednesday showed, helped by the manufacturing sector finally returning to growth after more than a year in the doldrums.
The IHS Markit eurozone composite purchasing managers' index rose to 54.9 in July, above the 50.0 no-change mark for the first time since February. In June, the index came in at 48.5.
The eurozone's services PMI "comfortably" sat above the 50.0 mark in July, rising to 54.7 from 48.3 in June. This was, though, below the consensus expectation of 55.1, according to FXStreet.
The euro stood at USD1.1901 at the European equities close Wednesday, up against USD1.1769 at the same time on Tuesday.
In the UK, service sector activity expanded at its fastest pace in five years in July as lockdown measures eased and businesses reopened. IHS Markit's PMI rose to 56.5 points in July, up sharply from 47.1 in June and signalling the fastest pace of expansion since July 2015. The print was back above the 50.0 mark which separates expansion from contraction.
It again, though, was slightly lower than expected - with analysts pencilling in a reading of 56.6.
The pound was quoted at USD1.3144 at the London equities close Wednesday, higher compared to USD1.3062 at the close on Tuesday as traders look to the Bank of England's interest decision.
The BoE will announce its latest policy move at 0700 BST on Thursday, followed by a press conference with Governor Andrew Bailey at 1000 BST.
"For now, with evidence that the economy is recovering from the low point in April, the MPC is likely to keep policy unchanged, including maintaining Bank Rate at 0.1%," said Lloyds Bank.
Over in the US, IHS Markit's services PMI registered 50.0 in July, up from 47.9 in June and improving on the flash reading of 49.6. Rising to the no-change mark of 50.0 in July signals the US service sector stabilised last month, IHS Markit said.
Meanwhile, the ISM's services PMI continued its strong rebound, up to 58.1 in July from 57.1 in June.
"This reading represents growth in the services sector for the second straight month after contraction in April and May, preceded by a 122-month period of expansion," noted Anthony Nieves, chair of the ISM Services Business Survey Committee.
Less encouragingly out the US on Wednesday, data from payroll processor ADP showed the number of private sector jobs slowed sharply in July from the prior month, as the resurgence in Covid-19 cases halted the reopening of businesses in a number of states.
According to ADP, private-sector employment increased by 167,000 in July from June, on a seasonally adjusted basis. The reading was well below the 1.5 million consensus estimate, supplied by FXStreet.
June's figure was revised upwards to show job gains of 4.3 million from the 2.3 million gain that was initially reported.
ADP's figures come just a few days before Friday's nonfarm payrolls data.
Ahead of Friday's jobs report, ING said: "We feel there is significant downside risk to the market's consensus prediction of a 1.5 million gain. Yes, we have to remember the data is effectively measured mid-month to mid-month and there was still some job creation going on in the second half of June, but the evidence from the first half of July is much bleaker."
Stocks in New York were higher at the London equities close, with the DJIA up 1.3%, the S&P 500 index up 0.7%, and the Nasdaq Composite up 0.3%.
Against the yen, the dollar was trading at JPY105.47 compared to JPY105.87 late Tuesday.
Brent oil was quoted at USD45.96 a barrel at the London equities close Wednesday, up from USD44.27 late Tuesday.
Gold was quoted at USD2,046.16 an ounce at the London equities close Wednesday against USD1,995.19 at the close on Tuesday.
Among the blue-chip gainers on Wednesday were gold miners, following the price of the precious metal higher after it smashed the USD2,000 mark. Fresnillo shares ended up 5.9% and Polymetal International up 6.4%.
Elsewhere in the FTSE 100, Coca-Cola HBC rose 8.1% despite the soft drinks bottler saying volumes and subsequently revenue took a knock in the first half of this year due to Covid-19.
Pretax profit for the first half of 2020, ended June 26, was EUR167.2 million, down 36% from EUR260.8 million in the same period ended June 28 a year prior. Forex-neutral net sales revenue for the half-year was down 15% at EUR2.83 billion from EUR3.32 billion a year prior. Net sales revenue at actual currency rates was down 16% at EUR2.83 billion from EUR3.35 billion.
Volumes were down in the half 9.2% to 990.5 million cases from 1.09 billion cases a year prior. The sparkling drinks category showed resilience, Coca-Cola HBC said.
In the FTSE 250, Morgan Sindall surged 18%. The construction firm said it will not pay an interim dividend as profit for its first half nosedived due to the Covid-19 pandemic, but added it expects an improvement in performance for the second half.
Pretax profit for the six months ended June 30 was GBP13.6 million, down 62% from GBP35.5 million the year prior. Revenue fell 4% year-on-year to GBP1.36 billion from GBP1.42 billion.
Morgan Sindall blamed the deterioration in its earnings on the Covid-19 pandemic and the subsequent lockdown restrictions imposed across the UK. Revenue for the second quarter was down 23% on the prior year, with April revenue falling 35% year-on-year.
Looking ahead, the London-based company said it expects pretax profit for full year 2020 to be between GBP50 million and GBP60 million. For comparison, pretax profit for 2019 was GBP88.6 million.
Hastings bounced 18% after agreeing to a takeover bid from Dorset Bidco as well as reporting a rise in revenue for the first half of 2020.
The East Sussex, England-based holding company has agreed to a 250 pence per share offer by Bidco which is a newly formed company jointly owned by a consortium comprising of Sampo and Rand Merchant Investment Holdings. Sampo and RMI own 30% of Hastings' shares.
The value of the deal is approximately GBP1.66 billion.
In the six months ended June 30, Hastings posted a pretax profit of GBP63.5 million, up from GBP46.1 million the year before. Gross written premiums for the half increased by 3.1% to GBP514.9 million from GBP499.2 million.
The corporate calendar for Thursday has interim results from broadcaster ITV, miner Glencore, insurer Aviva and packaging firm Mondi.
Thursday's economic calendar has German factory orders at 0700 BST and a UK construction PMI at 0930 BST, with US initial jobless claims at 1330 BST.
By Lucy Heming; lucyheming@alliancenews.com
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