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LONDON MARKET MIDDAY: Flash UK composite PMI growth boosts stocks

Stock prices in London rose on Tuesday heading into the afternoon, as UK economic data buoyed investors with ‘fresh optimism’ and helped the FTSE 100 hit another intraday high.

Amongst individual stocks, AB Foods was the star of the morning, thanks to a jump in its interim profit. JD Sports also rose, after agreed to buy US sports fashion retailer Hibbett for just over $1 billion.

The FTSE 100 index was up 47.48 points, 0.6%, at 8,071.35. The FTSE 250 was up 137.12 points, 0.7%, at 19,736.51, and the AIM All-Share was up 4.38 points, 0.6%, at 753.56.

The Cboe UK 100 was up 0.5% at 805.72, the Cboe UK 250 was up 0.6% at 17,110.56, and the Cboe Small Companies was up 0.4% at 15,101.94.

In European equities on Tuesday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.9%.

‘No sooner had the FTSE 100 hit a new record closing level, the blue-chip index has now scored another goal by achieving a new intraday high at 8,075. This positive showing is exactly what’s needed to help repair the reputation of the UK stock market. It’s going to be a slow process but every little helps,’ said Russ Mould, investment director at AJ Bell.

As well as new records, the a slew of flash purchasing managers’ index data grabbed market attention on Tuesday.

Notably, the headline seasonally adjusted S&P Global flash UK PMI composite output index edged up to 54.0 points in April from 52.8 in March. The reading indicates an expansion of growth, rising further above the 50.0 no-change mark, and marked an 11 month high.

‘Today’s business activity PMI data should raise fresh optimism over the health of the UK economy,’ said Matthew Ryan, analyst at Ebury.

‘Activity in the key services sector continues to rebound at a solid pace, and appears to be fuelling the recovery, helping lift the composite index to its highest level in a year.

‘Not only does recent data suggest that Britain’s economy very likely emerged from recession at the beginning of the year, but that a decent pick-up in growth could be on the way in the second quarter.’

Still to come on Tuesday, there is PMI data from the US out at 1445 BST.

Stocks in New York were called higher, ahead of the reading. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.3%.

The pound was quoted at $1.2355 at midday on Tuesday in London, higher compared to $1.2336 at the equities close on Monday. The euro stood at $1.0660, up against $1.0642. Against the yen, the dollar was trading at JP¥154.79, virtually unchanged compared to JP¥154.78.

In the FTSE 100, AB Foods jumped 9.5%.

In the 24 weeks to March 2, AB Foods reported pretax profit of £881 million, up 37% from £644 million the year prior. Revenue edged up 2.3% to £9.73 billion from £9.56 billion a year before.

In response, AB Foods hiked its interim dividend by a substantial 46% to 20.7p from 14.2p.

‘The group has delivered a strong first half performance and is on track to deliver significant growth in both profitability and cash generation ahead of expectations at the start of this financial year,’ AB Foods said in a statement.

JD Sports rose 6.3%, after it said it has signed a binding agreement to buy US sports fashion retailer Hibbett for just over $1 billion.

The Manchester, England-based sportswear retailer said it will pay $87.50 per Hibbett share in cash. Hibbett is Nasdaq-listed, and its shares closed on Monday in New York at $72.49, up 1.9% on the day, for a $855.14 million market capitalisation.

‘Hibbett’s footprint is highly complementary, adding a stronger presence in communities across the southeastern US, where we currently have a limited presence. It will also provide a stronger platform for the rollout of the JD fascia in the US,’ commented JD Sports CEO Regis Schultz.

Ocado jumped 5.7%, whilst Marks & Spencers rose 1.6%.

According to Kantar data, Ocado Retail was the fastest growing retailer this month. The online-only grocer is a joint venture between Ocado and Marks & Spencer.

The firm improved sales by 12.5% in the latest 12 weeks to £638 million, ahead of the total online market, which rose by 6.8%, to account for 1.9% of all take-home sales.

On the other hand, Anglo American lost 2.9%, dropping to the bottom of the index.

Anglo American said it was ‘pleased’ with its production performance in the first three months of 2024, largely maintaining full-year guidance but cutting its output target for diamond operations.

The London-based mining company said copper production rose 11% to 198,000 tonnes for the first quarter of 2024, compared to 178,000 tonnes in the corresponding period a year before.

In the FTSE 250, Ferrexpo jumped 8.6%, after it reported its best quarterly performance since the beginning of the full-scale invasion of Ukraine in February 2022.

The Baar, Switzerland-based iron ore pellet producer, with operations in Ukraine, said total commercial production during the first quarter of 2024 more than doubled to 2.1 million tonnes from 953,794 tonnes last year.

Executive Chair Lucio Genovese said: ‘During the quarter, we were once again able to export from Ukrainian ports, allowing us to export larger volumes to Europe and resume sales to Middle Eastern, North African, and Asian customers.’

Brent oil was quoted at $86.93 a barrel at midday in London on Tuesday, flat compared to $86.92 late Monday. Gold was quoted at $2,299.30 an ounce, lower against $2,337.50.

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