London close: FTSE gains despite sterling's strength on manufacturing data
By Andrew Schonberg
Date: Tuesday 02 May 2017
(ShareCast News) - Equities in London held out for a positive close as sterling made mild gains on the dollar and with the market looking ahead to the US Federal Reserve's interest-rate decision tomorrow.
The FTSE 100 was up 0.64% to 7,250.05, and the FTSE 250 was higher by 0.97% to 19,805.29. The Euro Stoxx 50, Dax and Cac 40 all advanced, but in the US gains were mixed on Wall St.
"Markets returned from May Day (Labour Day) holidays in positive spirit," said Jasper Lawler, senior market analyst at London Capital Group.
He said investors were buying up stocks while discarding bonds and havens, including gold. This was despite an embarrassing start to Brexit talks between the EU and UK, which turned out to be a sideshow to more immediate events in the diary.
"Event-risk like Wednesday's US interest rate decision and the final round of French elections at the weekend may just need to pass to make room for the next leg higher," said Lawler.
Earlier in the session, sterling popped up on the greenback after a survey showed UK manufacturing activity was much stronger than expected in April.
UK's April's manufacturing purchasing managers' index from IHS Markit and CIPS unexpectedly hit a three-year high of 57.3, from 54.2 in March and versus views for a modest fall.
"Markets in Europe have got off to a solid start to the month of May," said Michael Hewson, chief market analyst at CMC Markets UK.
They were helped by a series of upbeat manufacturing surveys from Europe and the UK, and some decent Q1 company announcements, as investors push political concerns into the background.
IG analyst Joshua Mahony continued, adding the recent deterioration in UK manufacturing growth appeared to have arrested, with this morning's bumper PMI announcement sending the pound surging in response.
"The jump to a three-year high (in the PMI) has proven that manufacturing is more resilient than many thought, with employment, output and new orders growth all improving markedly."
In corporate news, house builders and commercial property were performing notably well, as were a number of pharmaceutical giants and supermarkets. Both precious metals and general miners were firmly down.
Shire, which completed its $32bn merger with Baxalta last June, reported a 109% surge in revenues for the first quarter as it said it was on course to achieve its full-year guidance. Total revenues rose to $3.6bn, while operating income rose 82% to $1.5bn.
Smiths Group completed the sale of its Interconnect's Microwave Telecoms (SMT) business, to Infinite Electronics for an enterprise value of £85m.
Oil giant BP gushed higher after saying it got off to a strong first quarter, with a £1.45bn profit and expectations of a "material improvement" in cash flow from the second half of the year.
AstraZeneca turned lower after it and and its global biologics research and development arm, MedImmune, said the US Food and Drug Administration (FDA) has granted accelerated approval to the bladder cancer treatment Imfinzi (durvalumab).
Medical technology company ConvaTec rose as it announced the US launch of the Flexi-Seal PROTECT Fecal Management System, following receipt of 510(k) clearance from the US FDA.
Ocado shares surged on reports it is considering a tie-up with Marks & Spencer.
Market Movers
FTSE 100 (UKX) 7,250.05 0.64%
FTSE 250 (MCX) 19,805.29 0.97%
techMARK (TASX) 3,524.30 1.43%
FTSE 100 - Risers
Intertek Group (ITRK) 4,200.00p 3.30%
Standard Life (SL.) 374.00p 2.78%
Barratt Developments (BDEV) 595.00p 2.67%
Worldpay Group (WPG) 308.00p 2.67%
Persimmon (PSN) 2,390.00p 2.58%
Shire Plc (SHP) 4,651.00p 2.51%
CRH (CRH) 2,887.00p 2.41%
Hikma Pharmaceuticals (HIK) 1,983.00p 2.37%
DCC (DCC) 7,280.00p 2.10%
Paddy Power Betfair (PPB) 8,775.00p 2.03%
FTSE 100 - Fallers
Antofagasta (ANTO) 808.50p -3.52%
Fresnillo (FRES) 1,411.00p -2.82%
Anglo American (AAL) 1,079.00p -2.49%
Randgold Resources Ltd. (RRS) 6,660.00p -2.13%
Glencore (GLEN) 297.85p -1.91%
Ashtead Group (AHT) 1,602.00p -1.78%
Standard Chartered (STAN) 709.00p -1.69%
Burberry Group (BRBY) 1,595.00p -1.18%
Barclays (BARC) 209.85p -1.13%
GKN (GKN) 355.50p -0.95%
FTSE 250 - Risers
Ocado Group (OCDO) 265.50p 5.78%
esure Group (ESUR) 258.90p 5.67%
Cobham (COB) 139.60p 5.36%
Aberdeen Asset Management (ADN) 290.50p 4.12%
Euromoney Institutional Investor (ERM) 1,087.00p 3.92%
Bellway (BWY) 2,955.00p 3.83%
NMC Health (NMC) 2,062.00p 3.77%
Nostrum Oil & Gas (NOG) 463.40p 3.35%
BTG (BTG) 701.00p 3.01%
Fidessa Group (FDSA) 2,437.00p 2.96%
FTSE 250 - Fallers
Vedanta Resources (VED) 649.50p -6.07%
Hochschild Mining (HOC) 241.80p -4.88%
Drax Group (DRX) 309.90p -4.06%
Cairn Energy (CNE) 188.30p -3.09%
Virgin Money Holdings (UK) (VM.) 307.80p -2.99%
Tullow Oil (TLW) 204.60p -2.53%
Telecom Plus (TEP) 1,221.00p -2.32%
Evraz (EVR) 212.10p -2.08%
Atkins (WS) (ATK) 2,105.00p -1.96%
Centamin (DI) (CEY) 173.50p -1.92%
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