London midday: Stocks gain on US stimulus hopes, UK construction data

4th Jun 2013 11:45

Hopes that the US Federal Reserve would delay pulling the plug on stimulus and a surprise return to growth in the UK construction sector gave markets a boost on Tuesday morning, with the FTSE 100 rebounding from a one-month low the day before.London's FTSE 100 fell to 6,525 on Monday, a level not seen since May 3rd, after factory activity in both China and the US weakened in May. Manufacturing in the UK and Eurozone improved slightly, though the latter region was still in contraction.However, the weaker-than-expected data from the States prompted a rebound for Wall Street stocks last night, as traders hoped that the Federal Reserve could be prompted to hold off from 'tapering' its stimulus programme. The head of the Atlanta Fed, Dennis Lockhart, also said that scaling back quantitative easing wouldn't happen at the next meeting this month.Economic data provides a boostThe UK construction sector unexpectedly returned to growth in May, boosted by a surge in house building. The construction purchasing managers' index (PMI) rose to 50.8 in May from 49.4 in April. The last time the index was above 50, which indicates an expansion, was in October 2012. Analysts were expecting a smaller rise to 49.8.Meanwhile, UK retail sales rebounded in May driven by demand for furniture and flooring, the British Retail Consortium (BRC) revealed. Like-for-like sales at stores open at least 12 months grew by 1.8% from a year earlier after dropping 2.2% in April.Markets were also reacting to a substantial fall in Spanish unemployment of 98,300 in May, the largest fall in 11 months. Analysts were expecting a decline of just 50,000."This comes off the back of yesterday's positive Spanish and Italian manufacturing PMI figures and helps contribute to a growing feeling that the Eurozone is beginning to gain more traction in its push back towards stability," said Market Analyst Craig Erlam from Alpari.FTSE 100: GKN up after UBS commentsShares in GKN were performing well on Tuesday morning after UBS lifted its target price for the stock from 275p to 350p and kept its 'buy' rating, saying the engineering group is well positioned after the acquisitions of Getrag and Volvo Aero which have transformed its Driveline and Aerospace divisions and strengthened its position in both markets.Budget airline easyJet was also higher, extending its impressive year-to-date surge to around 66%. Prime Markets said this morning the stock's "sheer growth momentum" is accelerating.Glencore Xstrata was on the rise on reports that its copper mines in Peru are being eyed by two companies linked to Chinese state-backed groups. Reuters said that the assets are roughly worth $5.0bn.Plumbing and heating products group Wolseley was among the worst performers after its third-quarter statement. Despite registering a pick-up in like-for-like sales growth, its performance is still relying on strong growth in the US and UK, while markets in Europe remain weak.Biopharmaceuticals giant AstraZeneca fell after saying that it will be hit by a one-off impairment charge worth $140m after admitting that it has decided not to pursue a regulatory filing for fostamatinib, an oral drug it was hoping could be an alternative treatment for rheumatoid arthritis. FTSE 100 - RisersGKN (GKN) 314.70p +5.50%easyJet (EZJ) 1,258.00p +3.03%Aberdeen Asset Management (ADN) 466.90p +2.28%SABMiller (SAB) 3,372.00p +1.87%Old Mutual (OML) 205.50p +1.63%Standard Life (SL.) 392.30p +1.53%BT Group (BT.A) 298.60p +1.46%Schroders (SDR) 2,371.00p +1.45%Tate & Lyle (TATE) 835.50p +1.40%HSBC Holdings (HSBA) 728.20p +1.38%FTSE 100 - FallersWolseley (WOS) 3,218.00p -4.14%ARM Holdings (ARM) 908.50p -1.14%Smiths Group (SMIN) 1,358.00p -0.95%Evraz (EVR) 136.40p -0.94%Carnival (CCL) 2,147.00p -0.74%Polymetal International (POLY) 699.00p -0.64%Bunzl (BNZL) 1,275.00p -0.62%Aggreko (AGK) 1,696.00p -0.59%Vedanta Resources (VED) 1,284.00p -0.54%Antofagasta (ANTO) 965.50p -0.52%FTSE 250 - RisersAnite (AIE) 131.20p +4.21%Man Group (EMG) 118.00p +3.87%New World Resources A Shares (NWR) 100.00p +3.04%Dignity (DTY) 1,388.00p +2.81%Rentokil Initial (RTO) 90.90p +2.77%Jupiter Fund Management (JUP) 327.20p +2.51%Perform Group (PER) 568.00p +2.34%IG Group Holdings (IGG) 594.50p +2.32%AZ Electronic Materials SA (DI) (AZEM) 318.70p +1.98%Sports Direct International (SPD) 523.50p +1.95%FTSE 250 - FallersCobham (COB) 272.20p -4.86%Petropavlovsk (POG) 132.80p -3.07%African Barrick Gold (ABG) 134.40p -2.96%Lancashire Holdings (LRE) 763.00p -2.74%Kentz Corporation Ltd. (KENZ) 394.70p -2.30%Spectris (SXS) 2,042.00p -1.78%Hochschild Mining (HOC) 238.80p -1.77%Carpetright (CPR) 620.50p -1.74%Ultra Electronics Holdings (ULE) 1,722.00p -1.60%Petra Diamonds Ltd.(DI) (PDL) 113.20p -1.57%