Lunchtime market roundup: FTSE 100 back in green as oil price rises

Stock prices in London were higher on Thursday midday amid gains for telecommunications stocks and a boost from data which showed that UK services activity grew at its fastest pace in four months in August.

The FTSE 100 index was up 19.01 points, 0.2%, at 10,775.46. The FTSE 250 was up 3.82 points, marginally higher, at 24,327.33, and the AIM all-share was up 5.83 points, 0.7%, at 795.84.

The Cboe UK 100 was up 0.2% at 1,071.28, the Cboe UK 250 was down 0.1% at 21,152.01, and the Cboe small companies was down 0.2% at 18,942.34.

Oil prices climbed further as investors continued to monitor the latest exchange of fire between the US and Iran and the battle for control of the Strait of Hormuz.

Brent oil was trading at USD97.25 a barrel at midday on Thursday, higher than USD95.40 late Wednesday.

The US and Iran exchanged strikes on Tuesday, with US President Donald Trump saying Washington's attacks were in retaliation for Tehran's attempts to lay sea mines in the Strait of Hormuz and for firing at US service members in the Middle East over the weekend.

Trump, however, suggested the latest US attacks against Iran would likely be short-lived. Asked on Wednesday how long the bombing campaign could last, he told reporters: "I don't think too long."

UK services activity grew at its fastest pace in four months in August, although the final reading was weaker than initially estimated and inflationary pressures picked up.

The seasonally adjusted S&P Global UK services purchasing managers' index rose to 52.5 points in August from 52.1 in July, but came in below the flash estimate of 52.8.

Nevertheless, the reading remained above the 50-point mark separating growth from contraction and was the highest since April.

New business increased for a second consecutive month amid signs of improving business and consumer spending and investment sentiment. However, export sales fell for a sixth successive month amid weak European demand and geopolitical uncertainty.

The S&P Global UK composite PMI also rose to 52.5 points in August from 52.2 in July, matching the earlier flash estimate and reaching its highest level since April.

The data followed figures earlier in the week showing the UK manufacturing PMI fell to a five-month low of 51.7 points in August from 51.9 in July, although it was above the flash estimate of 51.5.

In European equities on Thursday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.1%.

Eurozone producer prices rose more sharply than expected in July, driven by higher energy costs.

Figures from Eurostat showed industrial producer prices increased 1.6% in the euro area in July from June, reversing a 0.3% decline in June and exceeding the FXStreet-cited consensus for a 1.2% rise.

Across the wider EU, producer prices rose 1.4% on a month-on-month basis after falling 0.2% in June.

Compared with a year earlier, producer prices increased 5.8% in the eurozone and 5.6% across the EU.

Energy prices in the eurozone jumped 5.6% on-month, while capital goods prices rose 0.3%. Prices for intermediate goods and durable consumer goods were unchanged, while non-durable consumer goods prices edged 0.1% lower.

The pound was quoted at USD1.3488 at midday Thursday, down from USD1.3505 at the London equities close on Wednesday. Against the euro, sterling fell to EUR1.1627 from EUR1.1648 a day prior.

The euro traded at USD1.1601 at midday Thursday, up from USD1.1594 late Wednesday. Against the yen, the dollar was quoted at JPY156.38 versus JPY158.67.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called marginally higher, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.2%.

The yield on the US 10-year Treasury was quoted at 4.78%, narrowing from 4.79%. The yield on the US 30-year Treasury was quoted at 5.26%, narrowing from 5.27%.

Back in London, Airtel Africa rose 4.2%, while Vodafone climbed 3.1% to the top of the FTSE 100.

At the other end of the index, Admiral Group fell 2.7%, and Aviva lost 1.5% as their shares traded ex-dividend.

On the FTSE 250, Hilton Food Group jumped 15% after upgrading its full-year adjusted pretax profit forecast.

Rosebank Industries rose 5.5% after narrowing its operating loss.

At the bottom of the index, Baltic Classifieds Group dropped 9.6% after JPMorgan cut its price target to EUR2.09.

Ithaca Energy fell 4.7%, Hammerson lost 3.5% and Chesnara declined 3.3%, with all three trading ex-dividend.

Among other London listings, Gem Diamonds surged 68% after swinging to a first-half profit as revenue and diamond prices improved.

The diamond miner reported pretax profit of USD3.1 million, compared with a USD20.0 million loss a year earlier, as revenue rose 32% to USD59.7 million from USD45.4 million.

Gem Diamonds said "encouragingly strong demand" supported an improvement in diamond prices, with the average price achieved rising to USD1,395 per carat from USD1,008.

Hutchmed China jumped 17% after signing an exclusive licensing agreement with GSK for worldwide rights outside Greater China to its experimental cancer treatment HMPL-A830.

Hutchmed will receive USD110 million upfront and is eligible for milestone and royalty payments of up to USD1.30 billion. HMPL-A830 targets cancers with KRAS gene mutations, which are common in colorectal, lung and pancreatic cancers.

On the downside, Crest Nicholson Holdings fell 9.2% after cutting its full-year outlook following weaker-than-expected summer trading.

The housebuilder now expects between 1,350 and 1,400 completions, down from previous guidance of 1,400 to 1,500.

It expects an adjusted loss before interest and tax of around £10 million, having previously guided for a profit of between £5 million and £10 million, as affordability pressures, competitive pricing and weaker open-market demand weigh on sales.

However, Crest Nicholson improved its year-end net debt forecast to between £70 million and £90 million from £100 million to £120 million.

Gold was quoted at USD4,427.03 an ounce at midday on Thursday, higher than USD4,371.82 on Wednesday.

Still to come on Thursday's economic calendar is the US composite PMI reading.

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