London midday: Stocks gain as investors mull services reading

(Sharecast News) - London stocks had extended gains by midday on Thursday, helped along by a solid performance from the mining sector, as investors mulled the latest reading on the UK services sector. The FTSE 100 was up 0.5% at 7,972.90.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 ticked higher on Thursday as US markets enjoyed a better session overnight.

"Miners were in demand as commodities prices continued to surge - an inflationary development which might provoke some nervousness about the fate of long-awaited interest rate cuts.

"Federal Reserve chair Jerome Powell warned yesterday of a risk of having to delay cuts thanks to stubborn inflationary pressures, although there was enough to reassure investors that a rate cut is coming at some point this year."

On home shores, a survey showed that business activity continued to expand again in March, albeit less than expected.

The S&P Global services purchasing managers' index dipped to 53.1 from 53.8 in February. This remained comfortably above the 50.0 mark that separates contraction from expansion and marked the fifth month of growth.

However, it was below the flash estimate of 53.4 and signalled the slowest rate of business activity expansion since November 2023.

The composite output index - which measures activity in the services and manufacturing sectors - came in at 52.8 in March, down slightly from February's nine-month high of 53.0 but still indicative of a solid upturn in private sector business activity.

Tim Moore, economics director at S&P Global Market Intelligence, said: "The recovery in service sector output lost a little bit of momentum during March, and more so than suggested by the flash PMI results, but the overall picture remains reasonably positive.

"Business activity has now expanded for five consecutive months, supported by sustained improvements in new order intakes. The solid growth rate achieved in March reinforces the view that a rebound in service sector performance is helping the UK economy to pull out of last year's shallow recession.

"Survey respondents once again commented on a turnaround in business and consumer spending, despite constraints on clients' budgets from strong inflation and elevated borrowing costs."

Still to come, investors were eyeing the latest US initial jobless claims at 1330 BST, ahead of Friday's all-important non-farm payrolls release.

In equity markets, Entain gained as the sports betting and gambling group currently without a permanent chief executive announced that chair Barry Gibson will also step down later this year following a four-year tenure. Stella David, the non-executive director who stepped in as interim CEO, was named as Gibson's successor.

BT Group rallied as JPMorgan said the shares appear heavily undervalued and "ripe for a major re-rating".

Future surged as it reported a return to organic revenue growth in the second quarter, largely attributed to robust performances in Go.Compare, B2B sectors, and resilient magazine sales.

Melrose spinoff Dowlais advanced as it announced the start of a £50m share buyback.

Vodafone was in focus after the Competition and Markets Authority said it was launching an in-depth investigation into its planned £15bn merger with CK Hutchison's Three after they failed to provide solutions to address competition concerns.

Ocado lost ground as it said that chairman Rick Haythornthwaite will be stepping down next year "due to his increasing commitment" as the recently-appointed chair of NatWest.

InterContinental Hotels Group, Mondi, Rentokil Initial, IMI, Direct Line, Domino's Pizza, Games Workshop, Hammerson and OSB Group were all in the red as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,972.90 0.45% FTSE 250 (MCX) 19,812.38 0.30% techMARK (TASX) 4,481.73 0.45%

FTSE 100 - Risers

Entain (ENT) 784.80p 3.37% Antofagasta (ANTO) 2,169.00p 3.29% Fresnillo (FRES) 541.00p 3.24% Anglo American (AAL) 2,110.00p 3.03% BT Group (BT.A) 107.10p 2.29% Standard Chartered (STAN) 709.00p 2.19% Barclays (BARC) 192.38p 2.04% Legal & General Group (LGEN) 255.90p 1.99% AstraZeneca (AZN) 10,770.00p 1.97% Reckitt Benckiser Group (RKT) 4,302.00p 1.94%

FTSE 100 - Fallers

Mondi (MNDI) 1,347.00p -1.93% Ocado Group (OCDO) 431.50p -1.78% InterContinental Hotels Group (IHG) 7,988.00p -1.48% Scottish Mortgage Inv Trust (SMT) 861.80p -1.40% Rolls-Royce Holdings (RR.) 418.10p -1.39% Rentokil Initial (RTO) 461.10p -1.37% Admiral Group (ADM) 2,663.00p -1.15% Halma (HLMA) 2,311.00p -1.07% Convatec Group (CTEC) 290.60p -0.95% Relx plc (REL) 3,294.00p -0.90%

FTSE 250 - Risers

Future (FUTR) 684.00p 14.10% Pagegroup (PAGE) 475.60p 5.55% Ascential (ASCL) 316.40p 3.67% Mitie Group (MTO) 109.60p 3.59% Dr. Martens (DOCS) 95.95p 3.39% Aston Martin Lagonda Global Holdings (AML) 167.00p 3.21% SSP Group (SSPG) 219.60p 2.62% Hays (HAS) 96.35p 2.61% TUI AG Reg Shs (DI) (TUI) 656.00p 2.42% SDCL Energy Efficiency Income Trust (SEIT) 60.20p 2.38%

FTSE 250 - Fallers

OSB Group (OSB) 366.40p -3.22% Hilton Food Group (HFG) 845.00p -2.65% Hammerson (HMSO) 27.80p -2.59% Domino's Pizza Group (DOM) 339.40p -2.08% Empiric Student Property (ESP) 90.50p -1.84% Trustpilot Group (TRST) 190.00p -1.66% Games Workshop Group (GAW) 9,775.00p -1.56% W.A.G Payment Solutions (WPS) 66.00p -1.49% Hargreaves Lansdown (HL.) 737.80p -1.44% Breedon Group (BREE) 384.50p -1.41%