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London open: Stocks gain ahead of UK construction PMI
London stocks rose on Wednesday ahead of a report on UK construction that is expected to show growth in sector activity accelerated in February.
Markit’s purchasing managers’ index on UK construction, released at 0930 GMT, is expected to rise to 55.0 in February from 50.0 the previous month. A reading above 50 signals an expansion while a level below that indicates a contraction.
The data follows disappointing UK manufacturing PMI on Tuesday. The Markit/CIPS manufacturing PMI fell to 50.8 in February from 52.9 in January. It was below economists’ expectations for a reading of 52.2 and marked the lowest reading since April 2013.
Manufacturing PMIs out of Europe, China and the US were also released on Tuesday and came in mixed.
“Unlike yesterday’s manufacturing mayhem, which the markets admittedly faced down with aplomb, Wednesday’s economic calendar contains far fewer hurdles for the global indices to overcome if they wish to sustain their current gains,” said Connor Campbell, financial analyst at Spreadex.
Wednesday’s economic calendar also includes the release of the US private payrolls report from ADP at 1315 GMT and the US crude inventories report at 1530 GMT.
Oil prices were sitting lower in morning trade with Brent crude falling 0.49% to $36.63 per barrel and West Texas Intermediate declining 1.4% to $33.90 per barrel.
In company news, ITV was in the red despite reporting a 6% rise in annual pre-tax profits of £641m on the back of revenue growth across the firm.
Entertainment One plunged as it posted a 3% drop in group revenue for the nine months to 31 December.
AB InBev gained after agreeing the sale of SABMiller’s 49% interest in a Chinese joint venture, China Resources Snow Breweries, to joint venture partner China Resources Beer. The deal comes ahead of AB InBev’s completion of its takeover of SABMiller.
Mining stocks were the biggest risers including Anglo American, Antofagasta and BHP Billiton as metal prices recovered overnight.
