UK stocks on the move as Wall Street returns

We look at Wednesday's stock market winners and losers as Wall Street returns after the 4th July holiday.

Data from China helped set the opening direction for London Wednesday as investors await the return of US markets closed yesterday for the 4th July national holiday. 

Chinese service sector data came in weaker than expected, underlining concerns about the pace of economic growth in the world’s second largest economy. Miners Anglo American, Antofagasta and Endeavour are all lower, but it’s Ocado that leads the fallers as another day passes with no news on a rumoured takeover bid from Amazon. 

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Education materials provider Pearson (LSE:PSON) is best of the blue-chips after broker UBS upgraded its rating to ‘buy’ from ‘hold’. UBS flagged recent share price weakness given concerns for the impact of Artificial Intelligence (AI). However, UBS questions the threat from AI, with investors potentially underestimating the strength of the company’s core Assessment & Qualifications business.  

In the FTSE 250, engineer and foundations specialist Keller Group (LSE:KLR) upped its full-year profit predictions following strong first-half trading and what it described as “a robust order book”. Annual underlying operating profit is now expected to be materially ahead of existing analyst forecasts, with management pre-announcing a 5% improvement to its pending half-year dividend payment. Shares rose by more than 10% Wednesday. 

Specialist insulation firm SIG (LSE:SHI) found itself on the back foot, its share price down over 10% at prices not seen since early January. Recent soft demand in Germany and France is expected to leave first half sales flat, with full-year profit now tipped to come in at the lower end of management’s forecasts. Interim results are scheduled for 8 August. 

There’s been a similar reaction to news out of vehicle hire company Redde Northgate (LSE:REDD). It posted a near 10% increase in annual profits to £178.7 million but flagged a deficit between improving vehicle supply and high customer demand. Shares in the group, whose fleet totals over 130,000 vehicles, reversed 8%.

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Big event Wednesday is the release of minutes from the US central bank’s last interest rate policy meeting, with investors awaiting comment on future policy. 

On Friday, US monthly employment data for June is due. In May, workers back on the payroll totalled 339,000, significantly better than Wall Street estimates of 190,000. Average hourly earnings, an important inflation indicator, rose 4.3% year-over-year, beating forecasts for a gain of 4.4%.  

Economists currently expect job, or payroll growth to slow to a gain of 240,000 for June, with average hourly earnings easing further to a gain of 4.2% year-over-year – potentially strengthening investor hopes that interest rates are close to their peak.