London midday: Stocks stay up as miners, airlines rally

(Sharecast News) - London stocks were still a little firmer by midday on Friday as comments from a US Federal Reserve official and encouraging Chinese and UK data underpinned the mood. The FTSE 100 was up 0.2% at 7,962.71, with sentiment boosted after Atlanta Federal Reserve President Raphael Bostic said he was in favour of "slow and steady" quarter-point US rate increases to limit risk to the economy.

Neil Wilson, chief market analyst at Finalto, said: "This seemed to placate markets somewhat after being on a relentless 'higher for longer' train for the last few days."

The latest data out of China also helped, as it showed that activity in the services sector picked up more than expected in February amid a recovery in demand.

The Caixin services purchasing managers' index rose to 55.0 from 52.9 in January. This was above consensus expectations for a reading of 54.5 and comfortably above the 50.0 mark that separates contraction from expansion.

Wang Zhe, senior economist at Caixin Insight Group, said: "There was still a lot of optimism in the services sector in February as business owners continued to express great confidence in an economic recovery upon the easing of Covid controls."

Wilson said: "The Chinese recovery is important...a smart exit from Covid and surge in demand from Chinese consumers could be all that's needed to get the global economy out of its funk."

On home shores, a survey showed the service sector returned to growth in February as business activity expanded at the fastest pace since June 2022.

The S&P Global/CIPS services purchasing managers' index rose to 53.5 from 48.7 in January, coming in above the 50.0 mark that separates contraction from expansion for the first time in six months. The reading was above the initial estimate of 53.3.

The composite PMI, which measures activity in services and manufacturing, ticked up to 53.1 in February from 48.5 the month before. This was above the initial estimate of 53.0.

Tim Moore, economics director at S&P Global Market Intelligence, said: "UK service providers moved back into expansion mode in February as fading recession fears and improving business confidence resulted in the strongest rise in new orders since May 2022. However, elevated borrowing costs and stretched household finances remained constraints on growth."

Moore said there was "clear evidence" that input price inflation has peaked, with the latest increase in average cost burdens the weakest since June 2021. Service sector firms commented on lower fuel bills and transport costs, as well as a gradual easing of broader inflationary pressures due to falling wholesale gas prices, he said.

In equity markets, miners rallied on the back of the Chinese services data, with Antofagasta, Glencore, Rio Tinto and Anglo American all up.

Airlines flew higher after well-received results from Lufthansa, with IAG, Wizz Air and easyJet all stronger.

On the downside, educational publisher Pearson fell despite reporting a better-than-expected rise in annual profits driven by revenue growth and cost savings and saying it would grow sales by low to mid-single digits this year.

Property portal Rightmove also lost ground after it posted a rise in full-year operating profit, pointing to "resilient traffic despite a significantly less frenetic property market than 2021".

In the year to the end of December 2022, operating profit was up 7% at £241.3m, with revenues 9% higher at £332.6m.

Rightmove said a total of 16.3bn minutes were spent on the platform during the year, down from 18.3bn in 2021 but still 34% higher than the pre-pandemic record of 2019.

IMI nudged down after the engineering group reported a rise in full-year profits and revenue and hiked its dividend as it said all three divisions had achieved organic revenue growth.

In broker note action, Admiral was knocked lower by a downgrade to 'neutral' from 'buy' at Citi, while Hunting slumped after a downgrade to 'hold' from 'buy' at Berenberg.

Market Movers

FTSE 100 (UKX) 7,962.71 0.24% FTSE 250 (MCX) 19,943.09 0.46% techMARK (TASX) 4,642.80 0.12%

FTSE 100 - Risers

Antofagasta (ANTO) 1,676.50p 3.42% Rio Tinto (RIO) 6,218.00p 3.32% Glencore (GLEN) 527.90p 3.31% Ocado Group (OCDO) 543.00p 3.11% London Stock Exchange Group (LSEG) 7,638.00p 2.88% Anglo American (AAL) 3,075.00p 2.88% International Consolidated Airlines Group SA (CDI) (IAG) 154.60p 2.22% Ashtead Group (AHT) 5,708.00p 2.15% BT Group (BT.A) 144.00p 1.77% Smurfit Kappa Group (CDI) (SKG) 3,242.00p 1.63%

FTSE 100 - Fallers

Admiral Group (ADM) 2,089.00p -2.88% Rightmove (RMV) 549.60p -2.52% Pearson (PSON) 901.60p -2.28% Abrdn (ABDN) 226.70p -2.20% Flutter Entertainment (CDI) (FLTR) 13,140.00p -1.43% Frasers Group (FRAS) 785.50p -1.32% Compass Group (CPG) 1,916.00p -0.88% BP (BP.) 556.70p -0.80% BAE Systems (BA.) 912.80p -0.74% Reckitt Benckiser Group (RKT) 5,876.00p -0.71%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 2,870.00p 5.09% easyJet (EZJ) 505.40p 4.27% Carnival (CCL) 806.80p 3.86% Aston Martin Lagonda Global Holdings (AML) 226.70p 3.75% National Express Group (NEX) 142.00p 3.35% Genuit Group (GEN) 310.50p 2.64% International Distributions Services (IDS) 240.70p 2.56% FirstGroup (FGP) 108.80p 2.45% BlackRock World Mining Trust (BRWM) 743.00p 2.20% Harbour Energy (HBR) 300.40p 2.18%

FTSE 250 - Fallers

Coats Group (COA) 75.70p -4.18% Hunting (HTG) 295.00p -3.44% TBC Bank Group (TBCG) 2,480.00p -1.59% Vietnam Enterprise Investments (DI) (VEIL) 560.00p -1.58% Liontrust Asset Management (LIO) 1,164.00p -1.52% Baltic Classifieds Group (BCG) 162.00p -1.10% Direct Line Insurance Group (DLG) 174.15p -1.08% Bellevue Healthcare Trust (Red) (BBH) 165.60p -0.96% Spectris (SXS) 3,551.00p -0.92% Spire Healthcare Group (SPI) 228.00p -0.87%