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Markets enjoy Biden boost and manufacturing surge

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Simon Neville, PA City Editor
·3-min read
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Strong manufacturing data and a wave of optimism from the US following President Joe Biden’s 2 trillion dollar (£1.45 trillion) infrastructure stimulus boost on Wednesday night helped markets get off to a steady start in April.

The FTSE 100 closed the day up 23.67 points, or 0.35%, at 6737.3 despite the pound rising against the euro and the dollar – up 0.36% and 0.31% respectively. A pound was worth 1.178 euros and 1.383 dollars as markets in Europe closed.

Typically, the FTSE 100 drops when the pound is strong because shares look pricier to investors who typically work in dollars.

The closely followed manufacturing PMI data across Europe – including the UK’s decade-high results – encouraged investors that the recovery is on its way, despite announcements of new restrictions in France.

Michael Hewson, financial analyst at CMC Markets UK, said: “European markets have got off to a solid start to April, after the latest manufacturing PMIs for Europe showed that despite the various lockdowns affecting the region, this part of the economy at least is firing on all cylinders.

“While German manufacturing led the way there was decent activity in France, Italy and Spain with orders looking strong across the board.

“Services activity may be weak domestically but overseas markets and demand looks strong, while costs also increased largely due to supply chain considerations.”

In Germany, the Dax 30 closed up 0.66% and the French Cac 40 rose 0.59%.

In company news, Deliveroo’s disastrous opening day as a listed company on Wednesday was not repeated, although the online delivery platform failed to impress – closing the day down 5.45p at 282p. Not quite the 26% fall of a day earlier, but unlikely to inspire confidence.

Fashion giant Next got things started on a slew of retail results over the next few weeks by revealing it expects profits this year will rise above previous forecasts.

It made the prediction after revealing strong online sales in the past eight weeks – although the predictions came alongside full-year results to the end of January showing pre-tax profits dropped 54% to £342 million.

Investors were pleased with the profits boost forecasts, with shares closing up 248p at 8,114p.

JD Sports confirmed the completion of its 495 million dollar (£358 million) deal to buy US sportswear brand DTLR as part of its strategy to expand further into the US. Investors were pleased, with shares closing up 25.4p at 850p.

Publisher Time Out said it would tap markets for £2 million more than initially planned as it prepares to make the most of a “renaissance” when Covid-19 restrictions lift. Shareholders did not seem to mind, with shares closing up 1p at 41.5p.

Construction firm Galliford Try announced it had won a six-year contract extension with Scottish Water worth £700 million as part of a joint venture. The deal follows a previous six-year contract that ends later this year. Shareholders reacted positively, with shares up 1.4p at 128.4p.

Investors in HS2 contractor Balfour Beatty appeared pleased that current chairman Philip Aiken will stick around a little longer due to a search for his replacement not running to time. Shares closed up 3.4p at 298.6p.

The biggest risers on the FTSE 100 were IAG, up 11.25p at 209.55p; LSEG, up 294p at 7,234p; Melrose, up 6.65p at 173.55p; Fresnillo, up 30.6p at 894.8p; and Rolls-Royce, up 3.62p at 108.92p.

The biggest fallers were Phoenix Group, down 21.4p at 712.8p; Evraz, down 13p at 565p; British American Tobacco, down 58.5p at 2,715.5p; Standard Chartered, down 9.3p at 490.2p; and BP, down 4.85p at 289.8p.