London open: Stocks steady ahead of services PMI
By Michele Maatouk
Date: Friday 03 Jul 2020
(Sharecast News) - London stocks were flat in early trade on Friday following solid gains in the previous session, with a fairly quiet day expected as US markets will be closed for the Independence Day holiday.
At 0900 BST, the FTSE 100 was steady at 6,238.47.
Spreadex analyst Connor Campbell said: "In a taste of what could be the tone for the rest of the session, things got off to an awfully slow start on a US-free Friday.
"Investors' reticence is understandable. For though the US markets won't be around to set the pace later this afternoon, news from America certainly is, with the country once against seeing a fresh record number of one-day covid-19 cases. Thursday saw a further 55,220 infections, clearing Wednesday's high by around 2,500.
"Alarmingly for Florida, the state made up almost exactly a fifth of those cases, in a stark example of what happens when you have the laxest lockdown measures imaginable.
"Without the US to guide the way this afternoon, it is going to be interesting to see whether Europe can strike out on its own, or whether it will wait for the return of the market daddy next week."
Market participants were mulling over the latest reading on the Chinese services sector, which showed it grew at the fastest rate in more than a decade in June.
The Caixin/Markit services purchasing managers' index rose to 58.4 from 55.0 in May, coming in comfortably ahead of consensus expectations for a reading of 53.2 and marking the highest reading since April 2010.
A level above 50.0 signals expansion, while a reading below indicates contraction.
Total new orders rose at the quickest pace since August 2010 and new export work expanded for the first time since January, the survey found. Firms widely reported that overall market conditions had continued to improve following an easing of measures related to the coronavirus pandemic.
Meanwhile, employment fell again, albeit modestly, with some firms noting that staff had left roles voluntarily.
Business confidence hit a three-year high in June amid forecasts of further increases in customer demand.
On home shores, the latest survey from GfK showed consumer confidence was improving a little as more businesses prepare to reopen after the coronavirus lockdown, but the mood remains fragile.
In a flash report using data collected between 18 and 26 June, GfK said its long-running consumer confidence index has risen by three points over the past two weeks to -27 from -30. Four of the five measures of the index were higher.
Joe Staton, client strategy director at GfK, said: "Despite the backdrop of dire warnings about the state of the economy, large-scale job losses, the end of furlough with the prospect of further unemployment, and a possible second-wave of Covid-19, consumers appear to be slightly more confident as lockdown loosens across parts of the UK.
"After the recent near-historic low of -36 for the Consumer Confidence Barometer last month, we're seeing some early signs of improvement across most measures for our fourth Covid-19 flash, even though all our core scores remain negative."
Still to come on the macro front, Markit's UK services PMI for June is at 0930 BST.
In equity markets, commercial property owner Land Securities rose as it said it planned to reinstate dividends after half year results in November as tenants reopened premises after the easing of coronavirus lockdowns.
The company said it had received 60% of June net rent due after concessions and deferrals, compared with 94% a year ago.
Plastic and fibre product maker Essentra was in the black as it said it expected a 9% fall in interim like-for-like revenue but reported an improving sales trend over the second quarter.
Rank Group was higher as it said it will begin reopening its Mecca bingo clubs from Saturday but warned that underlying operating profit for the year ended 30 June is expected to be at the lower end of guidance.
Outside the FTSE 350, shares of CMC Markets surged after the online trading platform said 2021 net operating income will exceed the upper end of current market consensus.
Market Movers
FTSE 100 (UKX) 6,238.47 -0.03%
FTSE 250 (MCX) 17,425.04 0.33%
techMARK (TASX) 3,772.57 0.38%
FTSE 100 - Risers
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,666.00p 2.10%
Smurfit Kappa Group (SKG) 2,594.00p 1.81%
Auto Trader Group (AUTO) 534.20p 1.79%
JD Sports Fashion (JD.) 663.20p 1.69%
Land Securities Group (LAND) 583.80p 1.53%
Whitbread (WTB) 2,384.00p 1.49%
Homeserve (HSV) 1,294.00p 1.33%
Rightmove (RMV) 562.80p 1.30%
Smith (DS) (SMDS) 300.50p 1.28%
CRH (CRH) 2,895.00p 1.26%
FTSE 100 - Fallers
Taylor Wimpey (TW.) 138.90p -3.04%
Next (NXT) 4,919.00p -2.21%
RSA Insurance Group (RSA) 415.00p -1.98%
Associated British Foods (ABF) 2,011.00p -1.71%
International Consolidated Airlines Group SA (CDI) (IAG) 227.80p -1.68%
Prudential (PRU) 1,209.50p -1.55%
Standard Chartered (STAN) 435.70p -1.47%
Lloyds Banking Group (LLOY) 31.44p -1.30%
Barratt Developments (BDEV) 498.40p -1.27%
Melrose Industries (MRO) 118.90p -1.25%
FTSE 250 - Risers
PureTech Health (PRTC) 286.00p 8.75%
Scottish American Inv Company (SAIN) 439.00p 6.04%
Rank Group (RNK) 151.40p 4.41%
Apax Global Alpha Limited (APAX) 146.00p 3.99%
Ascential (ASCL) 301.00p 3.79%
Fisher (James) & Sons (FSJ) 1,396.00p 3.41%
Trainline (TRN) 449.80p 3.40%
Softcat (SCT) 1,154.00p 2.94%
Telecom Plus (TEP) 1,496.00p 2.89%
Fidelity Special Values (FSV) 192.80p 2.88%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 47.70p -4.10%
Hiscox Limited (DI) (HSX) 778.40p -3.42%
Sirius Real Estate Ltd. (SRE) 77.50p -2.88%
Wood Group (John) (WG.) 194.15p -2.71%
Hochschild Mining (HOC) 184.90p -2.43%
Meggitt (MGGT) 316.40p -2.35%
Investec (INVP) 156.70p -2.28%
Carnival (CCL) 1,006.00p -1.90%
Dunelm Group (DNLM) 1,208.00p -1.79%
PPHE Hotel Group Ltd (PPH) 1,115.00p -1.76%
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