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Market Wrap - Midday

UK construction sector hits 17-month high in May

02 June 2017 11:58

The UK economy continued to show promising growth as the construction sector rebounded to a 17-month high in May, helped by the fastest upturn in residential work since 2015.

Markit's Purchasing Managers' Index was 56 in May - a sharp hike from 53.1 in April.

Despite a lack of news among the blue-chips, the FTSE 100 rose 0.3% in mid-morning trading to 7,570 thanks to a rally in banking and financial firms.

Royal Bank of Scotland (RBS) enjoyed a 1.5% rise to 262.9p and Standard Chartered (STAN) was also up 1.7% to 758p. HSBC (HSBA) ticked 1.3% higher to 686.1p and Barclays (BARC) advanced 1.1% to 213.5p.

Brent crude oil dropped sharply by 2.4% to $49.43 per barrel while copper cheapened 1.6% to $5,599 per tonne.

Gold weakened 0.3% to $1,262 per ounce.


Encouraging US data on private jobs growth in May and US President Donald Trump's plan to withdraw from the Paris climate deal helped the S&P 500 rally 0.7% to 2,430 on Thursday.

The market was also optimistic of further good news as more US employment data was expected later today.

Japan's Nikkei 225 followed the US higher and closed 1.6% up at 317.2, while China and Hong Kong made smaller gains.


In corporate news, the UK wealth management business of Old Mutual (OML), Old Mutual Wealth, completed the acquisition of Caerus Capital. Shares in the group were up 2.2% to 195p.


Challenger bank Metro (MTRO) boosted its mortgage book with the £597m acquisition of Cerberus's UK mortgages at a discount to its face value in a bid to meet its three-year profit target. Investors approved of the move as the bank advanced 2.1% to £37.98.

Inmarsat (ISAT) nudged 1.2% higher to 855p despite Qatar Airways becoming the first Middle East megacarrier to choose its advanced new GX Aviation in-flight broadband solution.

Inmarsat also awarded a contract to construct an additional Global Xpress broadband network communications satellite to Thales Alenia Space.

Acacia Mining (ACA) benefitted from a small relief rally after the miner announced that it believes it is closer to resolving a mis-reporting issue.

The Tanzanian government recently banned the export of gold/copper concentrates following its accusation that Acacia under-reported the amount it was transporting. Shares in Acacia jumped 3% to 292p as investors were hopeful of an upcoming resolution.


It was good news all round for WYG (WYG) as the company won two major new framework contracts with UK government agencies, as well as a significant new contract in Africa. Shares in the technical consultancy sparked 6.7% to 104p thanks to the contracts' value of £50m over the next three years.

Motif Bio (MTFB) raised approximately £19.4m to fund the further development of iclaprim, its novel antibiotic candidate, triggering a 13.6% slump in the stock to 32.8p.

In the mining sector, Ormonde Mining (ORM) pleased the market with an update of construction activities for the Barruecopardo project in Salamanca, Spain. The stock was up 19.2% to 1.5p.

Elsewhere, the market was concerned about Greka Drilling (GDL) following its $2.5m loan from GRECAP, a company controlled by one of Greka's directors, Randeep Grewal. Investors punished the stock which fell 12.9% to 2.5p.

A multi-year deal for Vipera (VIP) excited investors as shares in the mobile financial service provider were marked 14.2% higher to 6.8p. The deal was sealed with payment processor Bankart. Vipera said it would provide a mobile wallet and payment solution.

The acquisition of Eunisure by AFP Financial (AFHP) for up to £4.5m helped the stock to gain 10.2% to 215p.

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