London midday: Stocks up but off highs after dovish Fed minutes

08 April 2021

(Sharecast News) - London stocks were up but off earlier highs by midday on Thursday, after the FTSE 100 hit its best level since the pandemic following dovish minutes from the US Federal Reserve.
The top-flight index was up 0.3% at 6,902.68.

<em>IG</em> analyst Chris Beauchamp said: "It has taken three months, but the FTSE 100 is back above 6900, enjoying a rare streak of outperformance compared to other global markets which are showing more hesitation. However, the positive feeling is in evidence across most markets, with steady gains for European indices following on from a broadly positive session for Asia overnight.

"The latest set of Fed minutes delivered yet another reminder of Jerome Powell's determination to let the US economy run hot rather than move too early on rate rises, and this dawning realisation has been reflected in the strength of growth stocks such as those of the Nasdaq, which have made up plenty of lost ground in recent weeks as the shift from growth to value goes into reverse. Still, the 'steady as she goes' mantra from the Fed is likely to be positive for most parts of the market, and even banks will benefit from the rebounding global economy, even if their margins remain squeezed thanks to low interest rates."

On the macro front, investors were mulling a survey showing construction output rose at the fastest pace for more than six years in March as a revival in confidence spread across the sector.

The <em>IHS Markit/CIPS </em>UK construction purchasing managers' index registered 61.7 in March - a sharp rise from 53.3 in February and the strongest growth rate since September 2014. Growth was spread across all major sections of the industry.

Housebuilding remained the strongest category and commercial construction and civil engineering had their best scores since the second half of 2014. Job creation accelerated to a 27-month high.

In equity markets, <strong>Johnson Matthey</strong> rallied after the specialty chemicals business said its annual performance would be around the top end of market expectations as it announced a strategic review of its health business.

Homewares group <strong>Dunelm</strong> gained even as it reported a 16.8% fall in third-quarter sales, reflecting the impact of the latest national Covid lockdown, as it said it is set to finish the year "modestly ahead" of expectations.

<strong>Airtel Africa</strong> was boosted by an upgrade to 'overweight' from 'neutral' at <em>JPMorgan</em>.

On the downside, <strong>Aviva</strong>, <strong>Smurfit Kappa</strong>, <strong>Mondi</strong>, <strong>DS Smith</strong>, <strong>Direct Line</strong>, <strong>Grafton</strong>, <strong>Moneysupermarket</strong>, <strong>Ultra Electronics</strong> and <strong>Quilter</strong> were all weaker as their stock went ex-dividend.

<strong>Market Movers</strong>

FTSE 100 (UKX) 6,902.68 0.25%
FTSE 250 (MCX) 22,170.59 0.05%
techMARK (TASX) 4,328.92 0.49%

<strong>FTSE 100 - Risers</strong>

Johnson Matthey (JMAT) 3,191.00p 2.97%
Aveva Group (AVV) 3,726.00p 2.64%
Sage Group (SGE) 645.60p 2.61%
AstraZeneca (AZN) 7,283.00p 2.59%
3i Group (III) 1,242.00p 2.56%
Hikma Pharmaceuticals (HIK) 2,438.00p 2.44%
Reckitt Benckiser Group (RKT) 6,589.00p 1.90%
Spirax-Sarco Engineering (SPX) 11,880.00p 1.84%
National Grid (NG.) 903.80p 1.78%
Diageo (DGE) 3,144.50p 1.75%

<strong>FTSE 100 - Fallers</strong>

Aviva (AV.) 405.00p -3.66%
Smurfit Kappa Group (CDI) (SKG) 3,475.00p -3.12%
Smith (DS) (SMDS) 414.60p -2.31%
Mondi (MNDI) 1,885.50p -2.15%
International Consolidated Airlines Group SA (CDI) (IAG) 213.25p -2.11%
BT Group (BT.A) 153.25p -2.01%
Prudential (PRU) 1,539.00p -1.79%
Barratt Developments (BDEV) 777.20p -1.60%
Royal Dutch Shell 'A' (RDSA) 1,419.60p -1.44%
Melrose Industries (MRO) 172.95p -1.42%

<strong>FTSE 250 - Risers</strong>

Airtel Africa (AAF) 85.85p 3.56%
Spirent Communications (SPT) 249.40p 3.06%
Indivior (INDV) 137.20p 2.77%
Dunelm Group (DNLM) 1,383.00p 2.60%
Playtech (PTEC) 477.80p 2.44%
FDM Group (Holdings) (FDM) 1,058.00p 2.12%
Plus500 Ltd (DI) (PLUS) 1,468.00p 1.94%
Chemring Group (CHG) 273.00p 1.87%
Mitie Group (MTO) 65.00p 1.72%
Scottish American Inv Company (SAIN) 482.50p 1.69%

<strong>FTSE 250 - Fallers</strong>

Direct Line Insurance Group (DLG) 307.70p -4.53%
Moneysupermarket.com Group (MONY) 269.20p -3.86%
Quilter (QLT) 162.05p -3.43%
Carnival (CCL) 1,739.00p -3.34%
Wizz Air Holdings (WIZZ) 4,962.00p -3.12%
Elementis (ELM) 121.30p -2.96%
Hiscox Limited (DI) (HSX) 864.00p -2.79%
easyJet (EZJ) 996.60p -2.34%
Mitchells &amp; Butlers (MAB) 322.20p -2.19%
Shaftesbury (SHB) 642.50p -1.98%