London midday: FTSE pushes higher ahead of ADP report; BAT slumps

(Sharecast News) - London stocks had extended gains by midday on Wednesday as investors eyed the latest ADP jobs report in the US, but British American Tobacco slumped after a disappointing update. The FTSE 100 was up 0.5% at 7,524.1o..

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 moved higher on Wednesday as it responded to positive trading in Asia.

"Cooling job vacancy data from the US helped bolster expectations that we are at the pivot point of this rate hiking cycle - though more news on the US labour market through the course of this week will provide a fuller picture."

On home shores, a survey showed that activity in the construction sector declined for the third consecutive month in November on the back of another sharp drop in residential housebuilding.

The S&P Global and Chartered Institute of Procurement & Supply (CIPS) UK construction purchasing managers' index fell to 45.5 last month from 45.6 in October. This marked the third straight reading below the key 50-point level which separates growth from contraction.

It was the second-lowest reading since May 2020 and came in below the consensus estimate for an increase to 46.3.

The survey showed that elevated borrowing costs and subdued demand for new housing projects were the main factors holding back construction activity in November.

House building was by far the weakest-performing segment of the sector, with the sub-index at just 39.2, while civil engineering was at 43.5 and commercial building at 48.1.

There was a continued lack of new work to replace completed projects, with total new orders down for the fourth month in a row, albeit declining at the smallest pace since August.

One bright spot was a big fall in input costs, with data showing the steepest reduction in purchasing costs across the construction sector for more than 14 years due to lower raw material prices and greater competition among suppliers.

"There is no doubt that 2023 has been a difficult year for the UK construction sector. Inflated borrowing costs and falling demand have conspired to further slow new building this month," said John Glen, chief economist at CIPS.

"Despite this, the sector has finally emerged from a period of intense supply chain pressure and prices are now falling across the board, especially for timber and steel. Projects are no longer being delayed due to unexpectedly high material costs with November seeing the sharpest reduction in purchasing prices since July 2009."

Still to come, the ADP report for November is due at 1315 GMT.

In equity markets, miners were among the top performers on the FTSE 100 as copper prices rose, with Anglo American, Rio Tinto and Glencore all up.

Weir Group gained after saying it is now targeting £60m in absolute savings by 2026, as part of its goal to reach an operating margin of 20% by the same year. It also confirmed that market conditions and its 2023 guidance remained unchanged, with the company on track to deliver an operating margin of 17%.

Travel giant Tui rallied as it said it expects a 25% rise in operating profit this year after 2023 earnings surged by more than double on the back of strong demand. It also announced a potential move of its stock market listing from London to Frankfurt.

Paragon Banking jumped after saying it delivered a 25% jump in annual profits and announcing another £50m share buyback following a stronger-than-expected full-year performance.

Tobacco and nicotine giant British American Tobacco was under the cosh as it scaled back expectations for organic growth this year. The company said macroeconomic pressures in the US were impacting its combustibles performance and organic revenues are now expected to grow at the low end of the 3-5% guidance range at constant exchange rates.

BAT said it will take a non-cash adjusting impairment charge of around £25bn relating to some of its US combustibles brands.

Imperial Brands was also sharply lower.

Market Movers

FTSE 100 (UKX) 7,524.10 0.46% FTSE 250 (MCX) 18,584.64 0.53% techMARK (TASX) 4,092.12 0.40%

FTSE 100 - Risers

Prudential (PRU) 883.40p 3.52% Weir Group (WEIR) 1,925.00p 3.24% Ashtead Group (AHT) 4,852.00p 2.47% Standard Chartered (STAN) 659.20p 2.07% BT Group (BT.A) 132.95p 2.07% Anglo American (AAL) 2,199.50p 2.06% Rio Tinto (RIO) 5,526.00p 1.96% Experian (EXPN) 3,025.00p 1.95% Marks & Spencer Group (MKS) 256.70p 1.91% Fresnillo (FRES) 579.80p 1.90%

FTSE 100 - Fallers

British American Tobacco (BATS) 2,308.00p -7.22% Imperial Brands (IMB) 1,842.00p -1.15% Diageo (DGE) 2,792.50p -0.71% SSE (SSE) 1,861.00p -0.61% United Utilities Group (UU.) 1,080.50p -0.41% BAE Systems (BA.) 1,040.50p -0.38% Shell (SHEL) 2,517.50p -0.34% Rentokil Initial (RTO) 424.20p -0.28% Pearson (PSON) 937.20p -0.21% Convatec Group (CTEC) 223.20p -0.18%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 566.50p 10.64% Paragon Banking Group (PAG) 524.00p 6.72% OSB Group (OSB) 390.60p 3.88% Digital 9 Infrastructure NPV (DGI9) 32.50p 3.83% Redde Northgate (REDD) 373.00p 3.76% 4Imprint Group (FOUR) 4,660.00p 3.56% Ashmore Group (ASHM) 193.90p 3.14% Baltic Classifieds Group (BCG) 214.00p 3.13% PureTech Health (PRTC) 151.40p 2.30% IWG (IWG) 157.00p 2.28%

FTSE 250 - Fallers

Discoverie Group (DSCV) 659.00p -6.26% Bakkavor Group (BAKK) 81.00p -4.26% Ceres Power Holdings (CWR) 175.20p -2.94% Future (FUTR) 778.50p -2.08% Marshalls (MSLH) 243.40p -1.93% Spirent Communications (SPT) 109.00p -1.45% Indivior (INDV) 1,233.00p -1.44% Computacenter (CCC) 2,652.00p -1.27% Auction Technology Group (ATG) 489.50p -1.11% Diversified Energy Company (DEC) 1,325.80p -0.94%