London midday: Stocks gain on Covid vaccine hopes; airlines fly higher

By Michele Maatouk

Date: Thursday 02 Jul 2020

London midday: Stocks gain on Covid vaccine hopes; airlines fly higher

(Sharecast News) - London stocks were still in the black by midday on Thursday on hopes of a potential coronavirus vaccine, as investors eyed the release of the latest US non-farm payrolls report.
The FTSE 100 was up 0.8% at 6,205.20.

IG said: "Yesterday's news of a promising vaccine from Pfizer and BioNTech provides the first breakthrough which is more than simply a treatment for those that already have the virus. Nevertheless, while an early-stage human trial of their coronavirus vaccine created neutralising antibodies, markets have been burnt before and will watch closely for further oversight over the results.

"While the results provided hope for traders that we could soon return to normality, it is worthwhile noting that the process to approval is likely to be a long one that means a 2020 production looks unlikely. Meanwhile, the US continues to see Covid-19 cases spike, and market sentiment is likely to remain fragile as 12-states now embark on a move to reverse reopening plans."

On the macroeconomic front, the US non-farm payrolls report, unemployment rate and average earnings are due at 1330 BST.

CMC Markets analyst David Madden said the consensus estimate is that 3m jobs were added in June, which would be an improvement on the 2.5m jobs added in May. The unemployment rate is expected to fall from 13.3% to 12.3% and yearly average earnings are set to slip to 5.3% from 6.7%.

In equity markets, airlines put in a strong performance, with British Airways and Iberia parent IAG and easyJet both sharply higher amid expectations the government will announce later in the day that 75 countries will be exempt from UK quarantine rules.

Associated British Foods rallied after a trading update. The company estimated full-year adjusted operating profit for Primark will decline from £913m to between £300m and £350m due to the impact of the coronavirus pandemic, but it said trading at its reopened stores has been "encouraging". In addition, the group's grocery business saw turnover rise by 9% in the third quarter.

Aerospace and defence engineer Meggitt pushed up even as it said it expects civil revenue in the second quarter to decline by 50% on an organic basis.

On the downside, packaging company DS Smith slumped after it reported a 5% increase in full-year profit as strong e-commerce demand offset weaker demand from industrial customers, but a dip in revenue amid weak paper pricing in Europe and North America.

Market Movers

FTSE 100 (UKX) 6,205.20 0.77%
FTSE 250 (MCX) 17,379.87 1.11%
techMARK (TASX) 3,751.49 0.81%

FTSE 100 - Risers

Associated British Foods (ABF) 2,073.00p 5.52%
International Consolidated Airlines Group SA (CDI) (IAG) 229.80p 4.84%
Royal Bank of Scotland Group (RBS) 123.75p 3.60%
HSBC Holdings (HSBA) 384.75p 3.34%
GVC Holdings (GVC) 773.40p 3.34%
Melrose Industries (MRO) 120.85p 3.33%
Fresnillo (FRES) 856.20p 3.28%
Barclays (BARC) 117.08p 3.12%
JD Sports Fashion (JD.) 649.80p 3.11%
Anglo American (AAL) 1,879.00p 2.97%

FTSE 100 - Fallers

Smith (DS) (SMDS) 290.90p -8.72%
National Grid (NG.) 932.80p -5.87%
Smurfit Kappa Group (SKG) 2,538.00p -4.51%
Homeserve (HSV) 1,241.00p -3.42%
Mondi (MNDI) 1,467.50p -1.97%
Coca-Cola HBC AG (CDI) (CCH) 1,984.50p -1.90%
SSE (SSE) 1,354.00p -1.24%
Sainsbury (J) (SBRY) 201.40p -0.89%
Pennon Group (PNN) 1,114.00p -0.85%
Relx plc (REL) 1,856.50p -0.64%

FTSE 250 - Risers

Meggitt (MGGT) 327.00p 7.18%
Virgin Money UK (VMUK) 98.96p 6.39%
Mitchells & Butlers (MAB) 203.00p 5.95%
Network International Holdings (NETW) 475.40p 5.64%
Ferrexpo (FXPO) 173.50p 5.47%
Energean (ENOG) 609.00p 5.00%
Scottish Inv Trust (SCIN) 787.00p 4.93%
WH Smith (SMWH) 1,104.00p 4.74%
easyJet (EZJ) 700.60p 4.63%
Frasers Group (FRAS) 322.20p 4.34%

FTSE 250 - Fallers

Ibstock (IBST) 177.70p -3.37%
Liontrust Asset Management (LIO) 1,370.00p -3.18%
Workspace Group (WKP) 654.50p -3.04%
Airtel Africa (AAF) 60.20p -2.90%
LXI Reit (LXI) 114.00p -2.23%
Contour Global (GLO) 186.60p -1.69%
Morgan Advanced Materials (MGAM) 238.00p -1.65%
Chemring Group (CHG) 245.00p -1.61%
Morgan Sindall Group (MGNS) 1,220.00p -1.45%
Aston Martin Lagonda Global Holdings (AML) 49.64p -1.41%


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