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(Alliance News) - Stock prices in London were higher at midday on Wednesday with miners driving the FTSE 100 back above the 7,000 mark, while investors look ahead to key US economic data in the afternoon.
The flagship UK stock index was up 81.95 points, or 1.2%, at 7,005.12. The mid-cap FTSE 250 index was up 47.65 points, or 0.2%, at 22,377.56. The AIM All-Share index was up 0.3% at 1,265.34.
The Cboe UK 100 index was up 1.3% at 697.30. The Cboe 250 was up 0.2% at 20,042.81, and the Cboe Small Companies down 0.1% at 14,675.26.
In mainland Europe, the CAC 40 in Paris was up 0.3%, while the DAX 30 in Frankfurt was up 1.2%.
In the FTSE 100, heavyweight mining stocks were driving gains amid higher copper prices. Anglo American was up 3.7%, BHP up 3.5%, Rio Tinto up 3.3%, Glencore up 2.9% and Antofagasta up 0.9%.
"Mining stocks are enjoying a welcome boost in early trade today, with surging prices across a host of commodities driving up valuations in the sector. Copper prices have been rising steadily of late, with prices touching USD10,000 as inventories dwindle in the face of insufficient supply," said IG Group's Josh Mahony.
Croda International was up 3.6% after the speciality chemicals company said it is launching a strategic review of its Performance Technologies and Industrial Chemicals units.
Croda said the main objective will be to establish what ownership structure best serves this part of the business going forward, to create a stronger platform for its future growth. The review is consistent with Croda's prioritisation of investments in the faster-growth life science and consumer markets, which now represent over 80% of company's profit, it noted. These are represented by its Personal Care and Life Sciences divisions.
Croda said the review will consider whether the company is "the best future owner of all the PTIC businesses within the context of opportunities to deploy more capital and resources within PTIC, as well as in Consumer Care and Life Sciences". The review is expected to conclude by the end of 2021.
In the FTSE 250, Playtech was up 2.6% after the gambling software company said it signed a new, expanded long-term strategic software and services agreement with Holland Casino, in the Netherlands.
At the other end of the mid-caps, Virgin Money UK was the worst performer, down 6.5%, even as the challenger bank posted positive interim results.
Virgin Money swung to pretax profit in the half year that ended March 31 of GBP72 million from a loss of GBP7 million a year before.
Underlying net interest income slipped by 4% to GBP677 million from GBP702 million a year before as net interest margin narrowed to 1.56% from 1.62%. However, Virgin slashed its impairment charge to GBP38 million from GBP232 million, producing the swing to profit.
On AIM, boohoo Group was 2.5% lower despite posting "another set of record results" amid the challenges posed by the Covid-19 pandemic.
For the financial year ended February 28, revenue was up 41% to GBP1.75 billion from GBP1.23 billion the year before, and pretax profit jumped 35% to GBP124.7 million from GBP92.2 million.
The fast-fashion retailer said it saw strong revenue growth across all geographies with UK up 39% and international up 44%.
Boohoo said although trading in the first few week of current financial year have been encouraging, the economic outlook remains uncertain. It expects the benefits from reduced returns of unwanted purchases over the year start to unwind, while still experiencing high freight and carriage costs.
Boohoo is one of the biggest companies on AIM with a market value of GBP4.1 billion.
The pound was quoted at USD1.3920 at midday Wednesday, up from USD1.3871 at the London equities close Tuesday, ahead of the Bank of England's interest rate decision on Thursday.
"Bank Of England is scheduled to meet on Thursday, for the first time since restrictions have been lifted in the UK. The Monetary Policy Committee are expected to keep policy unchanged; however in the face of consistent economic improvement, the committee may decide to hike rates sooner than expected. The pound could remain fairly muted on the vote, but may well move on the tone of [governor] Andrew Bailey's economic rundown," said analysts at OFX.
The euro was priced at USD1.2012, little changed against USD1.2015. Against the yen, the dollar was trading at JPY109.30, flat from JPY109.33.
In economic news from the continent, service sector activity in the eurozone returned to growth in April after seven months of contraction, survey results from IHS Markit showed.
The eurozone purchasing services business activity index registered 50.5 points in April, up from 49.6 in March, and back above the 50.0 mark that separates expansion from contraction. April's reading signalled the first expansion of business activity since last August.
The eurozone composite PMI index print was 53.8 points in April, up from 53.2 in March. It is a combination of the services and manufacturing sector readings.
On Monday, the manufacturing PMI had been reported at 62.9 points in April, down from the flash score of 63.3 but still up from 62.5 in March.
Markit noted divergences in performance among eurozone countries. Spain registered a marked rise in activity, while Germany and Italy experienced contractions. Marginal growth was seen in France.
Brent oil was quoted at USD69.80 a barrel Wednesday at midday, up sharply from USD68.46 a barrel late Tuesday. Gold was priced at USD1,778.23 an ounce, lower from USD1,782.51.
US stock market futures were pointed higher as focus turns to company earnings, with General Motors, Uber Technologies and PayPal Holdings among those reporting quarterly updates on Wednesday.
The Dow Jones Industrial Average was called up 0.3%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.6%.
Wall Street had been hit on Tuesday by a comment from US Treasury Secretary Janet Yellen that interest rates may need to rise.
Ahead in Wednesday's economic calendar, there are US ADP employment figures are at 1315 BST, the services PMI is at 1445 BST, and the ISM services PMI print follows at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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