London midday: Stocks maintain gains as travel sector rallies

(Sharecast News) - London stocks were still firmly in the black by midday on Tuesday despite weak UK jobs data, amid reports US President Donald Trump is considering a $1 trillion infrastructure package and after the Federal Reserve launched a corporate bond-buying programme.
The FTSE 100 was up 2.5% at 6,216.30.

Neil Wilson, chief market analyst at Markets.com, said: "Yesterday, I noted that policymakers would be forced to chuck even more money at pandemic relief as second waves of cases and a painful and incomplete economic recovery bit. Right on cue, the Federal Reserve announced it would start buying individual corporate bonds, building on the existing purchases of ETFs. The Fed 'will purchase corporate bonds to create a corporate bond portfolio that is based on a broad, diversified market index of US corporate bonds', the central bank said.

"The Fed is stepping things up after its statement last week left investors more than a little concerned about the pace of recovery. The move suggests that the Fed, as was clear last week, is worried about the economy enduring a protracted downturn. Meanwhile the White House is again said to be mulling a $1tn infrastructure plan to stimulate the economy. The two horsemen of risk sentiment recovery - monetary and fiscal stimulus - riding to the rescue again."

On home shores, the latest figures from the Office for National Statistics showed the number of hours worked in the UK fell at a record pace as an extra 6m people stayed off work during the Covid-19 crisis.

Total weekly hours in the three months to the end of April fell by 94.2m, or 8.9%, to 959.9m a year earlier.

The number of workers on payrolls dropped by more than 600,000 between March and May and job vacancies fell to a record low as the Covid-19 crisis continued to hit the labour market. ONS figures indicated vacancies plunged 60% between March and May. Total pay fell in real terms for the first time since January 2018.

The unemployment rate surprised economists by holding steady at 3.9% versus an average forecast for an increase to 4.5%.

But experts warned the figures showed the government's furlough programme doing its job while delaying the long-term damage once state support for workers' wages ends in October.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the headline rate showed employment held "in suspended animation" by the government's job retention scheme. "The true damage from Covid-19 will emerge in the autumn," he said.

In equity markets, travel stocks IAG, Carnival and easyJet were high risers. The sector rallied as travel company TUI, also firmly higher, said it plans to partially restart its Summer 2020 programme.

Elsewhere, Ashtead rosse after the construction equipment hire firm said fourth-quarter profits had halved but paid a dividend despite the impact of the coronavirus pandemic.

Building materials company CRH was also a high riser, with traders pointing to a potential boost from US infrastructure spending.

Outsourcer Capita racked up strong gains as it said it has been awarded a five-year, €10m contract by Irish Water for the transformation and operation of its customer contact centre services.

Cineworld rose after saying it will reopen its UK and US cinemas on 10 July, with social distancing measures in place.

4imprint pushed higher as it said orders had risen to almost half last year's amount as US states began lifting Covid-19 restrictions that had hit the promotional merchandise company's sales hard.

Greggs advanced after saying it had frozen almost all shop openings and asked landlords for rent cuts as it set out plans to reopen about 800 stores for takeaway this week.



Market Movers

FTSE 100 (UKX) 6,216.30 2.50%
FTSE 250 (MCX) 17,595.38 2.96%
techMARK (TASX) 3,744.23 2.02%

FTSE 100 - Risers

Carnival (CCL) 1,389.50p 10.32%
International Consolidated Airlines Group SA (CDI) (IAG) 289.50p 9.37%
Ashtead Group (AHT) 2,628.00p 8.73%
easyJet (EZJ) 833.40p 8.57%
CRH (CRH) 2,892.00p 7.43%
Taylor Wimpey (TW.) 155.05p 6.34%
Rolls-Royce Holdings (RR.) 343.70p 6.15%
Intermediate Capital Group (ICP) 1,299.00p 6.13%
Ferguson (FERG) 6,390.00p 5.83%
Barratt Developments (BDEV) 528.00p 5.77%

FTSE 100 - Fallers

Admiral Group (ADM) 2,261.00p -0.70%
Hikma Pharmaceuticals (HIK) 2,349.00p -0.42%
Intertek Group (ITRK) 5,258.00p -0.15%
BAE Systems (BA.) 499.30p 0.26%
Spirax-Sarco Engineering (SPX) 9,742.00p 0.47%
Tesco (TSCO) 223.60p 0.68%
Polymetal International (POLY) 1,479.00p 0.72%
Severn Trent (SVT) 2,426.00p 0.79%
National Grid (NG.) 922.40p 0.81%
London Stock Exchange Group (LSE) 8,034.00p 0.83%

FTSE 250 - Risers

Capita (CPI) 45.22p 10.72%
4Imprint Group (FOUR) 2,650.00p 9.96%
Wood Group (John) (WG.) 230.90p 9.48%
Aston Martin Lagonda Global Holdings (AML) 75.10p 7.67%
PureTech Health (PRTC) 258.00p 7.50%
TUI AG Reg Shs (DI) (TUI) 484.50p 7.17%
Telecom Plus (TEP) 1,446.00p 7.11%
Petrofac Ltd. (PFC) 214.00p 7.11%
Ferrexpo (FXPO) 197.80p 6.92%
Go-Ahead Group (GOG) 1,082.00p 6.60%

FTSE 250 - Fallers

Apax Global Alpha Limited (APAX) 135.40p -1.17%
Provident Financial (PFG) 199.40p -0.80%
Contour Global (GLO) 183.20p -0.76%
IG Group Holdings (IGG) 774.00p -0.58%
Senior (SNR) 82.15p -0.30%
Dechra Pharmaceuticals (DPH) 2,702.00p -0.30%
Personal Assets Trust (PNL) 44,050.00p 0.11%
Plus500 Ltd (DI) (PLUS) 1,270.00p 0.20%
JPMorgan Indian Investment Trust (JII) 503.00p 0.20%
B&M European Value Retail S.A. (DI) (BME) 382.10p 0.21%