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LONDON MARKET MIDDAY: FTSE 100 higher and Paris stocks jump

1st Jul 2024 12:10

(Alliance News) - Stock prices in Europe were higher at midday on Monday, with strong gains for equities in Paris setting the tone as investors digest poll results in France.

The FTSE 100 index was up 24.91 points, or 0.3%, at 8,189.06. The FTSE 250 was up 74.56 points, or 0.4%, at 20,360.19, and the AIM All-Share was up 1.46 points, or 0.2%, at 765.84.

The Cboe UK 100 was up 0.2% at 815.04, the Cboe UK 250 was up 0.6% at 17,732.61, and the Cboe Small Companies was up 0.1% at 16,871.51.

The main focus of the week in Europe is politics, notably in the UK and France.

French voters propelled the far-right National Rally to a strong lead in first-round legislative elections on Sunday and plunged the country into political uncertainty, according to polling projections on Sunday.

French President Emmanuel Macron, who called the surprise elections just three weeks ago, urged voters to rally against the far right in the second round of balloting.

French far-right leader Marine Le Pen called on voters to give the National Rally an "absolute majority" at parliament.

The UK also has its own election to contend with, with Brits heading to polling stations on Thursday.

"A Labour win is seen as a net positive for financial markets, and would benefit banks, homebuilders and groceries the most according to JPMorgan. A Labour [win] should also benefit the British pound in the long run on hope of improved relations with Europe post-Brexit. In the short run, however, a Labour win is broadly priced in. Therefore the return of the Bank of England doves following the election could keep the pound's upside potential limited," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The pound was quoted at USD1.2669 at midday on Monday in London, up compared to USD1.2639 at the equities close on Friday. The euro rose to USD1.0748, against USD1.0713. Against the yen, the dollar was trading at JPY161.13, rising from JPY160.88.

In European equities on Monday, the CAC 40 in Paris was up 1.5%, while the DAX 40 in Frankfurt was up 0.4%.

Manufacturing activity continued to contract in the eurozone, albeit at a slower pace than expected, data published by S&P Global showed Monday.

The HCOB eurozone manufacturing PMI declined to 45.8 in June from May's 14-month high of 47.3. This however outperformed the flash estimate of 45.6 posted on June 21. Falling further from the 50-mark separating growth from contraction, it indicates that the slowdown in activity accelerated.

The UK manufacturing sector continued to grow in June, but at a slower rate, data showed.

The seasonally adjusted S&P Global UK manufacturing purchasing managers' index registered 50.9 in June, down slightly from May's 22-month high of 51.2 and below the earlier flash estimate of 51.4.

The PMI has posted above the neutral 50.0 mark – signalling expansion – in each of the past two months.

Numbers showed UK house prices climbed. The Nationwide tracker showed a 0.2% increase in seasonally adjusted UK house prices in June, following a 0.4% climb a month earlier.

Annually, the house price index rose by 1.5%, picking up speed from 1.3% in May.

"Although house prices rose slightly in June, an earlier dip means they were flat on the quarter in Q2. With signs mortgage rates are causing demand to falter and that supply is improving, we think that house prices will flatline at best over the coming months," said Andrew Wishart at Capital Economics.

London's housebuilders got a boost on the back of the data. Taylor Wimpey was up 1.8%, while Persimmon and Barratt Developments each jumped 1.9%.

On the other hand, Anglo American fell 2.4%.

The miner suspended production at Grosvenor steelmaking coal mine in Queensland, Australia following an underground gas incident over the weekend.

Anglo American said it will provide steelmaking coal production guidance "once more information is available", and indicated that assessment of the incident may take several months as a result of the likely damage underground.

It suspended production at its Grosvenor, following an underground coal gas ignition incident on Saturday.

On London's AIM, Echo Energy jumped 13%.

It said its wholly owned subsidiary, Echo Natural Resources, has entered into a shareholders joint venture agreement in Peru with the founding partners of Boku Resources.

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

Brent oil was quoted at USD85.38 a barrel at midday in London on Monday, up from USD84.84 late Friday.

Gold was quoted at USD2,330.80 an ounce, up against USD2,326.14.

Still to come on Monday's economic calendar, there is manufacturing PMI data from the US at 1445 BST, and ISM manufacturing PMI at 1500.

By Holly Beveridge, Alliance News senior reporter

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