London open: Stocks rise on Covid vaccines hopes, ahead of payrolls
By Michele Maatouk
Date: Thursday 02 Jul 2020
(Sharecast News) - London stocks rose in early trade on Thursday amid hopes of a potential coronavirus vaccine, as investors eyed the release of the latest US non-farm payrolls report.
At 0840 BST, the FTSE 100 was up 0.7% at 6,198.43.
Sentiment was underpinned by news that an experimental Covid-19 vaccine from Pfizer and BioNtech produced positive antibody results.
Neil Wilson, chief market analyst at Markets.com, said: "European equities followed the US and Asia higher on hopes for a vaccine and a strong US jobs report, whilst shrugging off soaring numbers of new cases in the world's largest economy.
"US cases of Covid-19 continue to surge, rising more than 50,000 in a single day for the first time. Florida's new case count rose 4.3%, vs the previous 7-day average of 5.7%, so indications perhaps that the rate of new cases may be coming down there. But California, Texas and Arizona recorded their largest one-day rise in cases."
Wilson said Pfizer's positive vaccine trial results were helping investors to shrug off higher cases. "But we have been here before - it's too early to get too excited - but a working vaccine is the holy grail as it would allow real normality to return to the economy," he added.
On the macroeconomic front, the US non-farm payrolls report, unemployment rate and average earnings are due at 1330 BST.
In equity markets, Associated British Foods was the top performer on the FTSE 100 despite forecasting that full-year adjusted operating profit for Primark will decline from £913m to between £300m and £350m due to the impact of the coronavirus pandemic, as it also said trading at its reopened stores "has in aggregate been reassuring and encouraging".
Richard Hunter, head of markets at Interactive Investor, said: "The diversity of the AB Foods business model has taken some of the sting out of the effects of the pandemic. In particular, the grocery unit, previously responsible for 28% of operating profit, saw an increase in revenues in the third quarter of 9%, leading to a cumulative increase for the year of 3%.
"Meanwhile, the sugar and ingredients businesses also posted progress, with a slight decline at the smaller agriculture unit. This has fed through to operating profits which were ahead of the company's own expectations for grocery, agriculture and ingredients, with a material profit improvement in sugar, driven by higher EU sugar prices."
Aerospace and defence engineer Meggitt rallied even as it said it expects civil revenue in the second quarter to fall by 50% on an organic basis.
Elsewhere, Avon Rubber gained ground after agreeing to sell its DeLaval business for £180m.
On the downside, DS Smith slumped after the packaging company reported a 5% increase in full-year profit but a drop in revenue as strong demand in e-commerce helped to offset weaker demand from industrial customers. Peers Smurfit Kappa and Mondi also retreated.
Mitchells & Butlers was a little weaker after the pub group said it swung a to a first-half pre-tax loss as the pandemic hurt revenue.
Auto Trader was knocked lower by a downgrade to 'hold' from 'buy' at Liberum.
Market Movers
FTSE 100 (UKX) 6,198.43 0.66%
FTSE 250 (MCX) 17,331.01 0.82%
techMARK (TASX) 3,752.03 0.83%
FTSE 100 - Risers
Associated British Foods (ABF) 2,110.00p 7.41%
Rolls-Royce Holdings (RR.) 296.50p 3.82%
ITV (ITV) 73.90p 3.18%
International Consolidated Airlines Group SA (CDI) (IAG) 225.20p 2.74%
CRH (CRH) 2,853.00p 2.59%
WPP (WPP) 637.20p 2.51%
HSBC Holdings (HSBA) 381.60p 2.50%
Johnson Matthey (JMAT) 2,126.00p 2.26%
BT Group (BT.A) 113.45p 2.21%
Lloyds Banking Group (LLOY) 31.37p 2.20%
FTSE 100 - Fallers
Smith (DS) (SMDS) 296.20p -7.06%
National Grid (NG.) 939.00p -5.25%
Auto Trader Group (AUTO) 513.60p -1.83%
Homeserve (HSV) 1,262.00p -1.79%
Polymetal International (POLY) 1,534.50p -1.67%
Coca-Cola HBC AG (CDI) (CCH) 1,991.00p -1.58%
Smurfit Kappa Group (SKG) 2,618.00p -1.50%
Mondi (MNDI) 1,480.00p -1.14%
Avast (AVST) 531.50p -0.84%
Spirax-Sarco Engineering (SPX) 9,794.00p -0.67%
FTSE 250 - Risers
Meggitt (MGGT) 321.70p 5.44%
Virgin Money UK (VMUK) 96.90p 4.17%
Pollen Street Secured Lending (PSSL) 770.00p 4.05%
Law Debenture Corp. (LWDB) 542.00p 3.83%
Investec (INVP) 162.65p 3.80%
easyJet (EZJ) 693.40p 3.55%
Avon Rubber (AVON) 3,405.00p 3.50%
SSP Group (SSPG) 260.00p 3.42%
Mediclinic International (MDC) 274.60p 3.16%
Grafton Group Units (GFTU) 678.00p 3.04%
FTSE 250 - Fallers
Airtel Africa (AAF) 59.90p -3.39%
Hochschild Mining (HOC) 188.30p -1.52%
HarbourVest Global Private Equity Limited A Shs (HVPE) 1,570.00p -1.51%
Workspace Group (WKP) 665.00p -1.48%
Carnival (CCL) 1,009.00p -1.13%
Vesuvius (VSVS) 386.40p -0.92%
Sirius Real Estate Ltd. (SRE) 77.10p -0.90%
PPHE Hotel Group Ltd (PPH) 1,115.00p -0.89%
Provident Financial (PFG) 172.40p -0.86%
Mitchells & Butlers (MAB) 190.00p -0.84%
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