London open: Stocks little changed ahead of manufacturing data
By Michele Maatouk
Date: Wednesday 01 Jul 2020
(Sharecast News) - London stocks were little changed in early trade on Wednesday amid ongoing concerns about the coronavirus pandemic, as investors eyed the latest reading on the UK manufacturing sector.
At 0835 BST, the FTSE 100 was down 0.1% at 6,165.56.
CMC Markets analyst Michael Hewson said investors appear to be caught in two minds at the moment, with optimism about a continued improvement in economic data on the one hand being offset by caution on the other over the prospect that any second wave could push out any recovery well into next year.
"The continued rise in US coronavirus cases appears to be being pushed to one side for now, despite dark warnings from Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, that cases could soar to 100,000 a day. This could change if death rates start to follow suit, which in turn could see current sentiment take a turn for the worst."
On home shores, the latest survey from Nationwide showed house prices fell in June for the first time since 2012 as the pandemic took its toll.
On an yearly basis, house prices dipped 0.1% following a 1.8% increase in May and versus expectations of 1% growth.
On the month, prices were 1.4% lower, which was an improvement on the 1.7% drop seen in May but worse than the 0.7% decline expected.
Nationwide's chief economist Robert Gardner said: "It is unsurprising that annual house price growth has stalled, given the magnitude of the shock to the economy as a result of the pandemic. Economic output fell by an unprecedented 25% over the course of March and April - almost four times more than during the entire financial crisis.
"Housing market activity also slowed sharply as a result of lockdown measures implemented to control the spread of the virus. While latest data from HMRC showed a slight pickup in residential property transactions from April's low, in May they were still 50% lower than the same month in 2019."
Still to come, Markit's manufacturing PMI for June is due out at 0930 BST.
In equity markets, John Laing was in the red as it said first-half net asset value before deducting dividends was expected to show a single-digit decline as investment activity was hampered by the coronavirus lockdown.
SSP lost ground after saying it was looking to slash 5,000 jobs in the UK as it dealt with the collapse in air travel due to the pandemic. The company, which operates food outlets at airports and train stations, said it expected only 20% of stores to be open by the autumn.
On the upside, Smith & Nephew was a high riser as it said it expects second-quarter revenue to drop around 29% but noted an improving performance as the quarter progressed.
Sainsbury's was also up after supermarket chain reported an 8.2% rise in first-quarter like-for-like sales driven by groceries as Britons stocked up during the coronavirus lockdown.
B&M European Value Retail gained as it hailed a "strong" first quarter, with a particularly pleasing performance in the UK, where revenue rose 33.7%.
In broker note action, Hargreaves Lansdown was knocked lower by a downgrade to 'sell' at Citi but Close Brothers was boosted by an upgrade to 'outperform' at RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 6,165.56 -0.07%
FTSE 250 (MCX) 17,185.19 0.39%
techMARK (TASX) 3,716.04 0.29%
FTSE 100 - Risers
Smith & Nephew (SN.) 1,541.00p 2.36%
Kingfisher (KGF) 225.90p 2.31%
Sainsbury (J) (SBRY) 212.30p 1.72%
Royal Dutch Shell 'B' (RDSB) 1,243.80p 1.62%
BP (BP.) 311.75p 1.48%
JD Sports Fashion (JD.) 631.00p 1.41%
Royal Dutch Shell 'A' (RDSA) 1,304.80p 1.38%
Melrose Industries (MRO) 115.30p 1.14%
DCC (DCC) 6,792.00p 0.92%
Prudential (PRU) 1,228.50p 0.82%
FTSE 100 - Fallers
National Grid (NG.) 974.00p -1.54%
Ocado Group (OCDO) 1,997.00p -1.53%
International Consolidated Airlines Group SA (CDI) (IAG) 218.90p -1.49%
Vodafone Group (VOD) 127.14p -1.33%
Pearson (PSON) 568.80p -1.22%
Polymetal International (POLY) 1,596.00p -1.21%
Hargreaves Lansdown (HL.) 1,609.00p -1.20%
Severn Trent (SVT) 2,450.00p -1.17%
Homeserve (HSV) 1,292.00p -1.00%
Smiths Group (SMIN) 1,398.00p -0.99%
FTSE 250 - Risers
Helios Towers (HTWS) 156.40p 5.25%
Energean (ENOG) 644.00p 4.72%
PayPoint (PAY) 622.00p 3.84%
Impax Environmental Markets (IEM) 328.00p 3.80%
B&M European Value Retail S.A. (DI) (BME) 411.30p 3.47%
Close Brothers Group (CBG) 1,143.00p 3.44%
Wood Group (John) (WG.) 200.40p 3.38%
TBC Bank Group (TBCG) 924.00p 3.36%
Babcock International Group (BAB) 320.60p 3.35%
Cineworld Group (CINE) 62.50p 3.24%
FTSE 250 - Fallers
John Laing Group (JLG) 320.20p -8.09%
SSP Group (SSPG) 248.00p -3.58%
Watches of Switzerland Group (WOSG) 270.50p -3.57%
TUI AG Reg Shs (DI) (TUI) 369.50p -2.99%
Carnival (CCL) 957.60p -2.86%
Telecom Plus (TEP) 1,386.00p -2.67%
Wizz Air Holdings (WIZZ) 3,250.00p -2.58%
Drax Group (DRX) 251.80p -2.10%
Bank of Georgia Group (BGEO) 1,048.00p -2.06%
TI Fluid Systems (TIFS) 182.00p -1.83%
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