London midday: Stocks in the black as miners rally; Fed eyed

(Sharecast News) - London stocks were still firmly in the black by midday on Tuesday, underpinned by a solid performance from the mining sector and stellar gains for Ocado, as investors eyed the start of the Federal Reserve's two-day policy meeting. The FTSE 100 was up 1.6% at 7,205.79, while sterling was 0.6% higher against the dollar at 1.1539.

Oanda market analyst Craig Erlam said: "While a 75-basis point hike looks locked in tomorrow, the messaging is what investors are interested in. Despite inflation remaining at eye-watering levels, there's a growing belief that the central bank will signal a desire to ease off the brake over the following few meetings starting with a 50bps hike in December.

"It may come too late to avoid a recession but the Fed has been very clear from the start that while a soft landing is the desirable and attainable outcome, getting inflation under control is the primary focus. The question is whether the central bank believes its efforts will achieve that or if more needs to be done.

"With the economy weakening, earnings not impressing and yield curves inverting - signalling an incoming recession - many now believe the risks of aggressive tightening are greater than a more gradual approach. The economy has a lot of tightening to absorb once rates likely hit the 3.75-4% range this week."

Erlam said a dovish signal could be an exciting moment for equity investors, "one they've craved all year, but that doesn't mean it'll be plain sailing from here".

Oh home shores, a survey out earlier showed that activity in manufacturing sector contracted again in October.

The S&P Global/CIPS manufacturing purchasing managers' index fell to a 29-month low of 46.2 from 48.4 in September, remaining below the 50.0 mark that separates contraction from expansion for three months in a row. However, it was above the flash estimate of 45.8.

The survey showed that new order intakes fell at the fastest pace since May 2020. This was put down to weaker domestic market, already high stock levels at clients, subdued client confidence and inflationary pressures.

Rob Dobson, director at S&P Global Market Intelligence, said: "UK manufacturing production suffered a further decline at the start of the fourth quarter, with the sector buffeted by weak demand, high inflation, supply-chain constraints and heightened political and economic uncertainties.

"New work intakes fell at the quickest pace since May 2020 as demand in domestic and export markets weakened. While the downturn has lessened the pressure on prices, the weak pound and high energy prices mean elevated cost inflation remains a prime concern for manufacturers."

Elsewhere, the latest survey from Nationwide revealed that house prices suffered their first monthly decline in October since July 2021. Prices fell 0.9% on the month, having been flat in September, marking the largest monthly fall since June 2020.

On the year, meanwhile, house prices were up 7.2% in October, down from 9.5% growth a month earlier, with the average price standing at £268,282.

In equity markets, Ocado rocketed after the online supermarket said it had signed a partnership between Ocado Solutions and Lotte Shopping, one of the largest business conglomerates in South Korea, to develop Lotte's online business with the Ocado Smart Platform.

Miners were also on the rise as the US dollar eased, with Glencore, Rio Tinto, Antofagasta and Anglo American among the top performers on the FTSE 100.

Auto Trader was boosted by an upgrade to 'buy' from 'neutral' at UBS.

On the downside, pest control and business services group Rentokil fell despite posting a jump in third-quarter profit.

Interdealer broker TP Icap retreated even as it reported a jump in revenue thanks to a solid performance from its global broking division.

BP was trading a smidgen lower even as it reported a surge in quarterly profit, well ahead of City expectations, and announced a further $2.bn share buyback, after Russia's invasion of Ukraine pushed oil and gas prices to historic highs.

BP said third-quarter underlying replacement cost profits had come in at $8.15bn, compared to $3.32bn a year earlier, while total revenues and other income soared to $57.81bn from $37.87bn in 2021. Analysts had been expecting pre-tax profits to be closer to $6.1bn.

Profits were down slightly on the third quarter, however, when they came in at $8.45bn, following an easing in the oil price.

Market Movers

FTSE 100 (UKX) 7,205.79 1.57% FTSE 250 (MCX) 18,317.89 2.39% techMARK (TASX) 4,279.37 0.98%

FTSE 100 - Risers

Ocado Group (OCDO) 648.80p 37.34% JD Sports Fashion (JD.) 103.05p 5.76% Anglo American (AAL) 2,757.00p 5.69% Glencore (GLEN) 525.80p 5.27% Antofagasta (ANTO) 1,235.00p 5.06% Prudential (PRU) 851.20p 4.98% Kingfisher (KGF) 228.20p 4.25% Frasers Group (FRAS) 675.00p 4.25% Intermediate Capital Group (ICP) 1,106.50p 4.19% B&M European Value Retail S.A. (DI) (BME) 335.80p 4.09%

FTSE 100 - Fallers

Rentokil Initial (RTO) 524.40p -3.67% Smith & Nephew (SN.) 1,022.50p -0.73% Relx plc (REL) 2,335.00p -0.26% Unilever (ULVR) 3,971.00p -0.09% Imperial Brands (IMB) 2,123.00p -0.05% Reckitt Benckiser Group (RKT) 5,782.00p 0.03% BT Group (BT.A) 129.90p 0.08% Flutter Entertainment (CDI) (FLTR) 11,590.00p 0.09% BAE Systems (BA.) 815.40p 0.12% Aveva Group (AVV) 3,127.00p 0.22%

FTSE 250 - Risers

Mitchells & Butlers (MAB) 130.00p 11.88% ASOS (ASC) 620.00p 10.03% Wood Group (John) (WG.) 153.50p 9.72% Auction Technology Group (ATG) 816.00p 9.24% Molten Ventures (GROW) 343.60p 7.37% Future (FUTR) 1,305.00p 7.14% Bridgepoint Group (Reg S) (BPT) 213.40p 7.07% Synthomer (SYNT) 119.70p 6.40% Marks & Spencer Group (MKS) 111.80p 5.97% Watches of Switzerland Group (WOSG) 820.50p 5.94%

FTSE 250 - Fallers

TP Icap Group (TCAP) 179.00p -2.72% Helios Towers (HTWS) 122.60p -2.31% Diversified Energy Company (DEC) 125.20p -0.48% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 428.00p -0.35% Hipgnosis Songs Fund Limited NPV (SONG) 87.80p -0.23% Mediclinic International (MDC) 495.20p -0.16% Moneysupermarket.com Group (MONY) 183.20p -0.11% W.A.G Payment Solutions (WPS) 82.00p 0.00% Homeserve (HSV) 1,186.00p 0.00% Euromoney Institutional Investor (ERM) 1,448.00p 0.00%