FTSE 100 up, while Labour commits to defence

(Alliance News) - Stock prices in London were up at midday, after data from S&P Global signalled a return to growth for the UK manufacturing sector.

The FTSE 100 index was up 17.18 points, or 0.2%, at 8,292.63. The FTSE 250 was up 165.40 points, or 0.8%, at 20,895.27, and the AIM All-Share was up 2.30 points, or 0.3%, at 808.09.

The Cboe UK 100 was up 0.3% at 827.98, the Cboe UK 250 was up 1.0% at 18,355.42, and the Cboe Small Companies was up 0.2% at 17,110.40.

The UK manufacturing sector returned to growth in May, according to purchasing managers' index survey results on Monday.

The seasonally adjusted S&P Global UK manufacturing purchasing managers' index rose to 51.2 in May from 49.1 in April. This was its highest reading since July 2022, but below an earlier flash estimate of 51.3 points.

Nevertheless, manufacturing production expanded at the quickest rate since April 2022.

"May saw a solid revival of activity in the UK manufacturing sector, with levels of production and new business both rising at the quickest rates since early 2022.

"The breadth of the recovery was also a positive, with concurrent output and new order growth registered for all of the main subindustries (consumer, intermediate and investment goods) and all company size categories for the first time in over two years," said Rob Dobson, director at S&P Global Market Intelligence.

In political news, Labour committed Monday to ensuring the UK's nuclear arsenal, pitching itself as strong on defence for July's election, reported AFP.

Leader Keir Starmer said Labour was "the party of national security" as he tried to reassure voters that the centre-left grouping has changed since he succeeded Jeremy Corbyn four years ago.

Starmer has committed to what it calls a "nuclear deterrent triple lock" that involves the construction of four new nuclear submarines. The other two elements are maintaining Britain's continuous at-sea deterrent and the delivery of all future upgrades needed for submarines to patrol waters effectively.

In European equities on Monday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.8%.

Manufacturing activity in the eurozone was less negative in May, amid a continued decline in input costs and optimism among producers.

The HCOB eurozone manufacturing purchasing managers' index came in at 47.3 points in May, a 14-month high and up from 45.7 in April, but lower than the flash estimate of 47.4 on May 23. The manufacturing PMI output index improved to a 14-month high of 49.3 points in May from 47.3 in April, but was below the flash estimate of 49.6.

Meanwhile, in Germany, the manufacturing PMI ticked up to 45.4 points in May from 42.5 in April. It was in line with the flash estimate. The manufacturing PMI output index for Germany rose to 48.9 points in May from 45.4 in April, a 13-month high and also in line with the flash estimate.

The pound was quoted at USD1.2703 at midday on Monday in London, compared to USD1.2719 at the equities close on Friday. The euro stood at USD1.0833, against USD1.0844. Against the yen, the dollar was trading at JPY156.92 compared to JPY157.24.

In the FTSE 100, GSK lost 9.0%.

The pharmaceutical firm told investors that there is "no scientific consensus" that ranitidine increases risk of any cancer, as it plans to immediately seek appeal to a ruling by the Delaware State Court, whereby a judge found the evidence backing up claims that Zantac - or ranitidine - causes cancer is legitimate and can be heard by juries.

GSK said that the ruling contradicts the Federal Court's Multidistrict Litigation ruling under the same legal standard, and emphasised that the ruling does not determine liability.

In the FTSE 250, Sirius Real Estate gained 1.3%.

For the year ended March 31, the London and Johannesburg-listed property investor posted pretax profit of EUR115.2 million, up 32% from EUR87.0 million a year prior. Revenue was up 6.9% to EUR288.8 million from EUR270.1 million.

Sirius declared a second-half dividend of 3.05 euro cents per share, up 2.3% from 2.98 cents year-on-year.

Chief Executive Officer Andrew Coombs said: "Looking ahead, our outlook remains positive: our active asset recycling programme, strong cash position and post balance sheet issuance of EUR59.9 million of debt means our balance sheet is in rude health.

Taseko Mines lost 15%.

It has suspended operations at its Gibraltar Mine in British Columbia, Canada, after collective bargaining with Gibraltar's union representatives ended without an agreement being reached. Gibraltar's unionised workforce informed the company that they intended to take strike action as of midnight on Friday.

Taseko opted to systematically shut down mining and milling operations prior to the midnight deadline, and the mine is now on care and maintenance with only essential staff operating and maintaining critical systems.

Beacon Energy lost 78%.

The oil and gas company said that the SCHB-2 sidetrack in Erfelden field was kicked off from the original well bore, and that the well will be temporarily shut-in to allow the rig to be demobilised. During this time, pressure build-up data will be obtained to better inform Beacon's understanding of the reservoir response.

Once the rig has left the drilling site, remedial actions will be undertaken, and the well will be reconnected to the Schwarzbach facility to allow well clean-up and a long-term flow rate.

Stocks in New York were called predominantly higher. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.4%.

Brent oil was quoted at USD80.93 a barrel at midday in London on Monday, down from USD81.30 late Friday.

The OPEC+ group of oil-producing nations agreed Sunday to extend their production cuts in a bid to support prices, as economic and geopolitical uncertainty looms over the market, reported AFP.

The 12-member oil cartel and its 10 allies decided to "extend the level of overall crude oil production...starting 1 January 2025 until 31 December 2025," a statement by the alliance said.

Some of those cuts will run until September before being phased out, while others will be kept in place until December 2025.

Gold was quoted at USD2,328.20 an ounce, against USD2,328.36.

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

By Holly Beveridge, Alliance News reporter

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