London midday: Stocks still a touch lower as investors mull construction data

(Sharecast News) - London stocks were still just a touch lower by midday on Tuesday as investors mulled over the latest reading on the UK construction sector and updates from the likes of Ocado and Sainsbury's.
The FTSE 100 was down 0.1% at 7,157.05.

IG market analyst Chris Beauchamp said: "The FTSE 100 is an island of relative calm this morning as European markets take a knock in the wake of poor German economic data. Factory orders and the ZEW index provided a double-whammy, knocking back the nascent rally in European stocks that seemed to be gathering strength yesterday, although lighter summer markets may also be playing a part, with investors still keen to ease up on risk for the time being.

"Downgrades for REITs like Land Securities and British Land have seen losses for the sector, but their small weighting in the index means the effect is fairly contained, while on the flip side continued strength in oil prices after the breakdown of OPEC talks has seen Shell and BP make gains, providing a support for the FTSE 100 that has allowed it to remain relatively close to flat for the day, outperforming indices on the continent."

On home shores, the latest survey from IHS Markit/CIPS showed that new orders fuelled the fastest rise in construction activity for 24 years, although the sector faces rising costs. The purchasing managers' index rose to 66.3 in June from 64.2 a month earlier - the biggest rise since June 1997 - as the sector continued to emerge from the Covid-19 crisis.

Tim Moore, economics director at IHS Markit, said: "Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening UK economy.

"Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997. Survey respondents widely reported delays due to low stocks of building materials, shortages of transport capacity and long wait times for items sourced from abroad."

In equity markets, British Land and Land Securities were the worst performers on the FTSE 100 after a downgrade to 'hold' at Jefferies, while Lancashire Holdings was hit by a downgrade to 'neutral' at JPM.

On the upside, Ocado rose after the online grocer said first-half losses narrowed as retail revenue rose during further Covid-19 restrictions in the UK. The pre-tax loss for the six months to the end of May was £23.6m compared with £40.6m a year earlier as group revenue rose 21.4% to £1.32bn.

Sainsbury's was higher after it increased its guidance for annual profit as sales beat expectations in the first 16 weeks of 2021. The FTSE 100 supermarket group said it expected annual underlying pre-tax profit of at least £660m compared with equivalent profit of £356m last year and earlier guidance of about £620m.

British Airways and Iberia parent IAG flew higher as Germany relaxed restrictions for travellers from the UK and some other countries.

Oil giants Shell and BP gushed higher as oil prices rose after talks between OPEC and its allies were postponed amid rising tensions between the UAE and Saudi Arabia.

Lloyd's of London insurers Hiscox and Beazley were lifted by upgrades to 'overweight' at JPMorgan.

Market Movers

FTSE 100 (UKX) 7,157.05 -0.11%
FTSE 250 (MCX) 23,008.24 -0.06%
techMARK (TASX) 4,492.41 -0.04%

FTSE 100 - Risers

Ocado Group (OCDO) 2,037.00p 2.62%
Entain (ENT) 1,893.00p 2.02%
Tesco (TSCO) 235.60p 1.77%
International Consolidated Airlines Group SA (CDI) (IAG) 191.84p 1.51%
Polymetal International (POLY) 1,598.50p 1.07%
BHP Group (BHP) 2,204.50p 1.01%
Sainsbury (J) (SBRY) 280.50p 0.83%
Fresnillo (FRES) 818.60p 0.81%
Spirax-Sarco Engineering (SPX) 13,835.00p 0.80%
Aveva Group (AVV) 3,861.00p 0.68%

FTSE 100 - Fallers

Land Securities Group (LAND) 680.20p -3.46%
British Land Company (BLND) 504.20p -3.45%
Informa (INF) 513.20p -1.95%
Barclays (BARC) 174.30p -1.91%
Melrose Industries (MRO) 160.40p -1.35%
Associated British Foods (ABF) 2,300.00p -1.33%
Vodafone Group (VOD) 120.54p -1.33%
ITV (ITV) 127.25p -1.32%
Intermediate Capital Group (ICP) 2,177.00p -1.23%
Antofagasta (ANTO) 1,453.50p -1.22%

FTSE 250 - Risers

Auction Technology Group (ATG) 1,188.00p 2.77%
Rank Group (RNK) 186.00p 2.20%
RHI Magnesita N.V. (DI) (RHIM) 4,230.00p 1.63%
Crest Nicholson Holdings (CRST) 435.80p 1.63%
PZ Cussons (PZC) 257.50p 1.58%
Kainos Group (KNOS) 1,528.00p 1.53%
Drax Group (DRX) 428.40p 1.47%
Hochschild Mining (HOC) 165.10p 1.35%
Dechra Pharmaceuticals (DPH) 4,452.00p 1.32%
Centamin (DI) (CEY) 107.55p 1.32%

FTSE 250 - Fallers

Virgin Money UK (VMUK) 199.50p -2.64%
IWG (IWG) 319.90p -2.08%
Meggitt (MGGT) 464.20p -2.03%
Vesuvius (VSVS) 546.50p -1.80%
Bodycote (BOY) 862.00p -1.65%
Lancashire Holdings Limited (LRE) 617.50p -1.52%
4Imprint Group (FOUR) 2,750.00p -1.43%
Trustpilot Group (TRST) 340.00p -1.39%
TI Fluid Systems (TIFS) 322.50p -1.38%
Aston Martin Lagonda Global Holdings (AML) 1,890.00p -1.31%