LONDON MARKET MIDDAY: Stocks rise as OPEC+ meets to decide on output

Wed, 01st Sep 2021 12:07

(Alliance News) - Stocks in London were higher at midday on Wednesday as investors digested the latest set of manufacturing PMI figures, while attention turns to a meeting of OPEC and other producers.

The FTSE 100 index was up 42.07 points, or 0.6%, at 7,161.77. The mid-cap FTSE 250 index was up 132.07 points, or 0.6%, at 24,234.26. The AIM All-Share index was up 0.6% at 1,301.03.

The Cboe UK 100 index was up 0.6% at 711.41. The Cboe 250 was up 0.7% at 22,023.52, and the Cboe Small Companies was up 0.1% at 15,573.81.

In mainland Europe, the CAC 40 stock index in Paris was up 0.9%, while the DAX 30 in Frankfurt was up 0.7%.

"Most market operators are confident about the reopening of economies as well as the global recovery as a whole. That said, the main bullish driver for stocks remains the extremely accommodative environment and, despite talk about an upcoming reduction in stimulus policies, investors may want to extend gains before the year-end and the official start of tapering in both Europe and the US," said analysts at ActivTrades.

In the FTSE 100, property companies Land Securities and British Land were up 2.7% and 2.9% respectively after Morgan Stanley raised the stocks to Equal Weight from Underweight.

At the other end of the large-caps, miners were among the worst performers amid lower base metal prices. Antofagasta down 2.3%, Rio Tinto down 1.6%, BHP down 1.4% and Anglo American down 1.2%.

In base metals, spot copper eased to USD9,323.60 a tonne from USD9,345.00, while spot aluminium softened to USD2,649.50 a tonne from USD2,655.50.

In the FTSE 250, Tyman was the best performer, up 8.4%, after Berenberg raised the door and window components supplier to Buy from Hold.

888 Holdings was up 3.6% after the gambling firm said it delivered record first half revenue and profit, made strong strategic progress, and increased its full year expectations.

For the six months ended June 30, revenue was up 39% to USD528.4 million from USD379.1 million last year and pretax profit up 14% to USD57.9 million from USD50.9 million.

888 declared an interim dividend of 4.5 US cents, up from 3.2 cents paid out at the same time last year.

Looking ahead, 888 said it was confident that revenue and adjusted earnings before interest, tax, depreciation, and amortisation in the full year will be slightly ahead of its prior expectations.

At the other end of the midcaps, WH Smith was the worst performer, down 4.8%, after the books and stationery retailer cautioned on the year ahead amid an "uncertain" travel rebound path.

WH Smith, which has outposts in train stations and airports as well as the high street, said second half group revenue was 65% of the same period two years ago. This marked an improvement from the first half figure of 60%. For the eight weeks to August 28, revenue showed a further improvement, standing at 71% of the levels reported two years ago.

For its travel unit, second half revenue stood at 38% of 2019's levels. UK travel passenger numbers remain "significantly" down on 2019 levels, the company said, but it is seeing a gradual recovery.

However, it warned on the financial year ahead.

WH Smith said: "As previously stated, we remain confident in revenues returning to pre-Covid levels in the next two to three years. While there will be a return to good levels of profitability in the year ending August 2022, the trajectory of the recovery in travel remains uncertain. This combined with the previously announced accounting finance charges relating to the successful convertible bond issue on April 29, means that we currently anticipate the levels of profitability for the year ending August 2022 will be at the lower end of market expectations."

The pound was quoted at USD1.3755 at midday on Wednesday against USD1.3753 at the London equities close Tuesday, unmoved after data showed the UK manufacturing sector lost momentum.

UK manufacturing sector activity slowed slightly in August as momentum was hurt by supply chain disruptions and raw material shortages, IHS Markit said.

The UK manufacturing purchasing managers' index decreased slightly to 60.3 points in August from 60.4 in July and was little-changed from a preliminary estimate of 60.1. Still, the score remained well above the 50.0 mark which separates expansion from contraction.

The euro was priced at USD1.1818, up from USD1.1802. Against the yen, the dollar was trading at JPY110.30, up from JPY110.01.

On the continent, growth in the eurozone's manufacturing sector slowed to a six-month low in August, Markit survey results showed, but steady growth continued.

The final eurozone manufacturing PMI slipped to 61.4 points in August from 62.8 in July, and marginally below the 61.5 flash reading. The euro area manufacturing sector registered another marked expansion during August, with the index remaining well above the no-change mark of 50.0, although momentum waned once again as the headline index fell to a six-month low.

Brent oil was quoted at USD71.90 a barrel Wednesday midday, down from USD72.12 late Tuesday, ahead of a virtual OPEC meeting. Gold was trading at USD1,813.44 an ounce, up from USD1,805.13.

OPEC and its allies will meet to review its plans for reviving halted oil production, with investors expecting the group to ratify another increase with the global recovery largely still on track.

"OPEC's meeting today with allies should be simple - agree to raise output by 400k bpd as they have already set out the schedule through to December. Delta has increased downside risks for oil demand but prices have stabilised around USD70 and the physical market remains tight even if speculative sentiment rolled over in July and August," said Markets.com analyst Neil Wilson.

US stock market futures were set to start September on the front foot following a record-setting run in August, ahead of manufacturing PMI figures in the afternoon.

The Dow Jones Industrial Average was called up 0.3%, the S&P 500 up 0.3%, and the Nasdaq Composite up 0.2%.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com