London midday: Stocks nudge up as investors mull raft of data; StanChart gains

London stocks had nudged higher by midday on Friday as investors digested a raft of UK data releases, while Standard Chartered surged after well-received results.

The FTSE 100 was up 0.1% at 8,673.76.

A survey out earlier show that private-sector activity growth in the UK eased slightly in February, driven by the sharpest contraction in manufacturing output in more than a year.

The S&P Global 'flash' reading of the composite PMI - which measures activity in both the services and manufacturing sectors combined - fell to 50.5 this month from 50.6 in January, meeting analysts' forecasts.

Growth unexpectedly picked up in the services sector, with the PMI rising to 51.1 from 50.9, ahead of the consensus forecast of 50.8.

However, industrial conditions worsened for the fourth consecutive month, with the contraction in manufacturing - represented by any figure under the neutral 50-point mark - falling from 48.3 to 46.4. This was well below the market estimate of 48.4 and the lowest level recorded since December 2023.

For both sectors combined, sales pipelines were said to have remained subdued as total new work fell for the third straight month and at its steepest decline since August 2023.

Private-sector staffing numbers also fell by their most since November 2020, which S&P said was a result of higher payroll costs and weak demand, with average cost burdens rising by their most in 21 months. Purchasing managers said that average cost burdens increased by their most in 21 months.

"Early PMI survey data for February indicate that business activity remained largely stalled for a fourth successive month, with job losses mounting amid falling sales and rising costs," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

"The lack of growth alongside rising price pressures points to a stagflationary environment which will present a growing dilemma for the Bank of England."

Investors were also mulling the latest borrowing figures from the Office for National Statistics, which showed that January’s monthly budget surplus was the biggest on record, although it still missed expectations.

Public finances recorded a £15.4bn surplus in January, up £800m on the previous year. This marked the highest figure for January since monthly records began in 1993.

Nevertheless, the figure was below the £20.5bn forecast by the Office for Budget Responsibility and consensus forecasts of £18.8bn.

The ONS said combined self-assessed income and capital gains tax receipts were provisionally estimated at £36.2bn in January, up £3.8bn on the year and the highest January receipts since monthly records began in 1999.

Alex Kerr, UK economist at Capital Economics, said: "While January’s disappointing public finances figures may not be as bad as they first appear, they continue the run of bad news for the Chancellor in 2025 and underline the difficult choices she faces.

"While there is increasing pressure on the government to commit to higher defence spending, the OBR is likely to conclude that the Chancellor’s headroom against her fiscal rules has been wiped out and she will probably need to tighten fiscal policy as a result."

Separate figures from the ONS showed that retail sales bounced back more than expected last month.

Retail sales grew 1.7% on the month following four consecutive months of falls and after a downwardly-revised 0.6% drop in December. Economists were expecting a smaller increase of 0.3%.

The ONS said food store sales volumes grew strongly in January 2025, following falls in recent months.

More broadly, sales volumes declined by 0.6% in the three months to January 2025, compared with the three months to October 2024, but they were up 1.4% compared with the three months to January 2024.

Food stores sales volumes rose 5.6% on the month - the largest jump since March 2020.

Sales at non-food stores - the total of department, clothing, household and other non-food stores - fell 1.3%. Clothing retailers and household goods stores suggested the fall was due to reduced consumer confidence.

Paul Dales, chief UK economist at Capital Economics, said: "The 1.7% m/m leap in retail sales volumes in January (CE +1.0%, consensus +0.3%) suggests the retail sector shot out of the blocks at the start of the year.

"But some of that strength will have come at the expense of weakness in other parts of the economy. And with households in a fairly glum mood, we doubt it will last."

In equity markets, Asia-focused bank Standard Chartered surged as it said it would hand back $1.5bn to shareholders after a rise in annual earnings.

Pre-tax profits for 2024 came in at $6bn, up from $5.1bn a year earlier and slightly below average estimates of $6.2bn.

NatWest and Barclays were also higher.

Ferrexpo gained sharply, having tumbled late on Thursday after Ukrainian officials said they planned to nationalise the company’s Poltava mining and processing plant amid allegations of illegal mining and fund misappropriation.

GSK was on the back foot following a Bloomberg report suggesting it could be targeted by activist investors after a long period of lagging behind rivals.

Market Movers

FTSE 100 (UKX) 8,673.76 0.12%
FTSE 250 (MCX) 20,774.92 0.79%
techMARK (TASX) 4,718.56 0.12%

FTSE 100 - Risers

NATWEST GROUP (NWG) 452.70p 3.81%
Standard Chartered (STAN) 1,181.50p 3.64%
Diageo (DGE) 2,182.00p 2.75%
JD Sports Fashion (JD.) 83.60p 2.75%
Centrica (CNA) 147.30p 2.61%
Barclays (BARC) 305.05p 2.23%
Sainsbury (J) (SBRY) 253.80p 2.09%
BT Group (BT.A) 149.85p 1.94%
Croda International (CRDA) 3,209.00p 1.94%
Associated British Foods (ABF) 1,917.50p 1.86%

FTSE 100 - Fallers

Mondi (MNDI) 1,235.50p -2.33%
GSK (GSK) 1,416.00p -2.14%
Fresnillo (FRES) 774.00p -1.65%
British American Tobacco (BATS) 2,988.00p -1.55%
Entain (ENT) 736.40p -1.23%
BAE Systems (BA.) 1,269.00p -1.17%
Shell (SHEL) 2,653.00p -1.15%
Relx plc (REL) 3,938.00p -1.15%
BP (BP.) 447.70p -0.95%
Imperial Brands (IMB) 2,726.00p -0.55%

FTSE 250 - Risers

Ferrexpo (FXPO) 78.00p 12.88%
Aston Martin Lagonda Global Holdings (AML) 119.60p 5.47%
Ocado Group (OCDO) 312.50p 3.31%
Genus (GNS) 1,810.00p 3.19%
Lion Finance Group (BGEO) 5,330.00p 3.09%
SThree (STEM) 257.00p 3.01%
Chrysalis Investments Limited NPV (CHRY) 102.80p 2.80%
Helios Towers (HTWS) 95.80p 2.79%
Domino's Pizza Group (DOM) 297.80p 2.76%
Barr (A.G.) (BAG) 636.00p 2.58%

FTSE 250 - Fallers

Indivior (INDV) 688.00p -6.01%
Oxford Nanopore Technologies (ONT) 126.70p -4.02%
Endeavour Mining (EDV) 1,764.00p -2.27%
Burberry Group (BRBY) 1,090.50p -1.31%
Pennon Group (PNN) 438.00p -1.08%
JPMorgan Indian Investment Trust (JII) 971.00p -1.02%
Raspberry PI Holdings (RPI) 670.25p -0.85%
XPS Pensions Group (XPS) 395.00p -0.75%
Diversified Energy Company (DEC) 1,143.00p -0.61%
Energean (ENOG) 1,024.00p -0.58%