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(Alliance News) - Stock prices in London were still higher at midday on Tuesday aided by robust UK PMI data and a rise in commodities prices, while the US is gearing up for more corporate earnings this week and key nonfarm payrolls report on Friday.
The FTSE 100 index was up 49.82 points, or 0.7%, at 7,019.43. The mid-cap FTSE 250 index was up 26.95 points, or 0.1%, at 22,524.32. The AIM All-Share index was down 0.6% at 1,276.86.
The Cboe UK 100 index was up 0.8% at 698.80. The Cboe 250 was up 0.2% at 20,173.81, and the Cboe Small Companies up 0.6% at 14,742.26.
In mainland Europe, the CAC 40 in Paris was up 0.5%, while the DAX 30 in Frankfurt was down 0.4%.
"UK traders have returned from the bank holiday in an optimistic mood, pushing the FTSE 100 back above 7,000. A rally in precious metals has put the gold/silver mining contingent at the top of the leaderboard, taking heart from gold's strong performance of late against a more convivial backdrop for the safe haven due to the slowing of the rise in Treasury yields," said IG Chief Market Analyst Chris Beauchamp.
In the FTSE 100, Mexican miner Fresnillo was the best performer, up 5.1%, tracking spot gold prices higher. The metal was quoted at at USD1,782.61 midday Tuesday an ounce, up from USD1,768.81 late Friday.
Oil majors BP and Royal Dutch Shell 'A' and 'B' shares were up 3.2%, 3.1% and 3.0% respectively in a positive read-across from Saudi Aramco, which said income grew by almost a third in the first quarter of 2021.
Brent oil was priced at USD68.81 a barrel Tuesday midday, higher from USD67.32 late Friday.
Saudi Aramco shares were up 0.4% in Riyadh.
The mostly state-owned oil firm said net income was USD21.7 billion for the first quarter of 2021, a 30% increase from USD16.7 billion a year prior, primarily driven by a stronger oil market and higher refining and chemicals margins, partly offset by lower production.
Aramco reported average total hydrocarbon production of 11.5 million barrels per day of oil equivalent in the first quarter of 2021, including 8.6 million barrels per day of crude oil. Cash flow from operating activities and free cash flow was USD26.5 billion and UDS18.3 billion, respectively, in the first quarter, while first quarter capital expenditure stood at USD8.2 billion.
The company declared a dividend of USD18.8 billion for the first quarter, to be paid in the second quarter of 2021, broadly unchanged year-on-year.
International Consolidated Airlines Group was up 3.1%, after JPMorgan upgraded the British Airways-parent to Overweight from Neutral.
Travel stocks were given a boost generally, after the European Commission proposed to ease restrictions on travel to countries in the bloc amid progressing Covid-19 vaccination campaigns and lower infection rates.
Moreover, the UK government's "green list" of countries to which people can travel without having to isolate for 14 days on their return is expected to be released this week, although it is understood details are still being finalised.
Both The Times and The Guardian said destinations likely to make it onto the list for travel from May 17 include Portugal, Malta and Gibraltar, while the Telegraph said Spain, Greece and France could be added by the end of June.
In the FTSE 250, Tui and easyJet were up 4.5% and 3.8% respectively. Elsewhere, Irish carrier Ryanair Holdings was up 1.1%, and Jet2 was 2.1% higher.
At the other end of the midcaps, Provident Financial was 3.5% lower. The doorstep lender confirmed that the review of its Consumer Credit division is nearing completion, following a newspaper report that the review includes the potential wind-up of its home credit unit and online lending business Satsuma.
Over the weekend, The Mail on Sunday reported Provident would close its its doorstep lending business, as well as Satsuma, leaving Provident to focus on its credit card business, Vanquis Bank, and its car finance operation, Moneybarn.
In March, the Bradford-based sub-prime lender warned that the Consumer Credit division faces liquidation unless a deal could be agreed to pay off increasing complaints. Provident will announce the outcome of the review alongside its annual results, which will be published on Monday next week.
The pound was quoted at USD1.3863 at midday Tuesday, higher than USD1.3827 at the London equities close Friday, after positive UK economic data.
UK manufacturing sector activity strengthened in April as lockdown restrictions eased, according to IHS Markit.
The seasonally adjusted IHS Markit/CIPS purchasing managers' index rose to 60.9 points in April, up from 58.9 in March and above the earlier flash estimate of 60.7. The latest reading is the highest since July 1994's record high.
Markit said April saw a further acceleration in the rate of expansion of the UK manufacturing sector. Output growth was attributed to a loosening of lockdown restrictions, improved demand and rising backlogs of work.
Further, solid and accelerated expansions of output were seen across the consumer, intermediate and investment goods industries, with the consumer goods category the strongest performer overall, Markit said.
The euro was priced at USD1.2026, lower from USD1.2035. Against the Japanese yen, the dollar was trading at JPY109.45, up from JPY109.26.
US stock market futures were pointed mostly lower as investors weigh strong US economic data and robust corporate earnings against rising coronavirus cases in parts of the world, such as India.
The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index down 0.1% and the Nasdaq Composite down 0.4%.
The US economy is likely to expand by 7% this year as it bounces back from the Covid-19 pandemic, its fastest rate since the early 1980s, a top Federal Reserve official said.
"This is welcome progress after the toughest period for the economy in living memory and a winter when the pandemic was particularly severe, and the economy suffered as a result," New York Fed President John Williams said in a speech on Monday.
He warned against the tendency to "overreact" to price spikes caused by the unique circumstances of the recovering economy this year, while predicting inflation would return to the central bank's two percent target in 2022.
New York Governor Andrew Cuomo announced a major easing of coronavirus restrictions Monday, including the imminent resumption of 24-hour operations on the city subway. The announcement highlights how far New York City, once the epicentre of the US's outbreak, has come in getting the virus under control.
From May 19, percentage limits on occupancy will be scrapped for many business and cultural venues in the city - including shops, restaurants, cinemas and museums, Cuomo said. These limits currently vary between 33 and 75% capacity.
Meanwhile, Florida Governor Ron DeSantis on Monday lifted all Covid-19 restrictions in the US state, citing the effectiveness and availability of vaccines.
DeSantis signed a law invalidating local emergency orders - which impose restrictions due to Covid-19 - effective from July 1, and then signed an executive order that bridges the gap between now and then. Nearly nine million people - out of a total of 23 million residents - have had at least one dose of the vaccine in Florida, according to the US health department.
Ahead in the US earnings calendar this week are quarterly earnings from drugmakers Pfizer and Moderna on Tuesday and Thursday respectively. Payments processor PayPal and ride-hailing firm Uber Technologies report on Wednesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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