The UK’s blue-chip index heads higher as vaccine optimism grows and businesses welcome roadmap out of lockdown

• FTSE 100 climbs 55 points
• Deliveroo ahead
• Flutter hit by Fox legal dispute

9.43am: Positive UK survey supports market
The UK service sector performed strongly in March, according to the final update on the month, albeit marginally worse than the initial estimates.
The IHS/Markit purchasing managers index came in at 56.3 compared to estimates of 56.8, but sharply higher than the 49.5 recorded in February and just 39.5 in January. Anything over 50 marks expansion rather than contraction, and March has seen the first growth for four months.
The composite index – which includes both the service and manufacturing sectors – was 56.4, up from 49.6 in February and above the 50 threshold for the first time in 2021 so far.
UK Markit Services PMI Mar F: 56.3 (est 56.8; prev 56.8)UK Markit Composite PMI Mar F: 56.4 (est 56.6; prev 56.6)
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Tim Moore, Economics Director at IHS Markit, which compiles the survey, said: UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders. Total business activity increased at the fastest rate since August 2020 and this return to growth ended a four-month sequence of decline.
“Forward bookings for consumer services and rising optimism about recovery prospects resulted in extra staff hiring across the service economy for the first time since the start of the pandemic. Business optimism improved for the fifth month running in March and was the highest since December 2006.”
The FTSE 100 is holding onto its gains following the survey, up 55.61 points or 0.81% at 6879.16.
9.17am: Food delivery firm regains a little lost ground
Deliveroo (LON:ROO) has shrugged off a proposed strike by its riders over pay and conditions, as restrictions on trading its shares came to an end.
Following its flop flotation last week which saw its shares slump in conditional trading from the 390p offer price, it has picked up 10p or 3% to 290p despite general investors being able to sell for the first time.
Neil Wilson at Markets.com said: “Deliveroo shares edged higher at the start of unrestricted trading as investors shrugged off the stocks dreadful start to life as a public company. There were fears the 70,000 retail customers who had participated in the float would take the opportunity to offload, but investors are holding the line for the time being.
“Having tumbled 26% on day one, the first day of unrestricted trading saw the stock climb 3%… Im not sure if this is a vote of confidence or a case of averaging in, but its no doubt a big relief to management and the bankers involved that the retail army has not routed at the first sound of gunfire. Given the wipe-out that has already taken place, I think a lot of investors will simply think that it cannot go any lower and its worth holding on for a better price. Cutting losers is harder than letting winners run. It comes as hundreds of Deliveroo riders prepare to strike over pay and conditions. The walkout underlines the regulatory risk attached to the stock and the implied impact any Uber-like ruling could have on margins.”
Overall the market’s buoyant mood continues, with the FTSE 100 up 57.26 points or 0.84% at 6880.81, helped by the success of the vaccine programme and ahead of the first stage of reopening next week.
Neil Wilson again: ” The FTSE 100 rose 0.9% in the early part of the session to trade at its highest since the start of the year 6,900 looks to be on. Id still be confident that the discount in UK equities combined with a solid domestic and global outlook supports the investment thesis and the blue chips could be eyeing a pre-pandemic 7,700 by the end of the year.”
8.52am: UK benefits from international investors
Rotation appears to be the word of the week with international investors ploughing some of the profits made on Americas tech stocks into the more cyclical, lower growth European markets.
London was among the beneficiaries of this trend as it opened up almost 50 points to the good.
Later well get a read on the state of the service sector with monthly purchasing managers data expected, while in the US the tea leaves will be forked over after the latest meeting of the Federal Reserve.
Of interest from the latter will be any minor nod or snort in the direction of American interest rates against a backdrop of growing anxiety over inflation.
On the market, retail landlord Land Securities (LON:LAND) flourished as Britons prepared to return to the shopping malls. Its shares led the Footsie with a 2.7% advance.
BP (LON:BP.) was not far behind with a 2.3% gain after its latest results revealed it was cutting its debt pile at a faster than forecast rate.
Legal wrangling with Fox Corp over a disputed stake in FanDuel put pressure on gaming group Flutter Entertainment (LON:FLTR), which fell 2.5%.
6.50 am: Front foot start predicted 
The FTSE 100 is expected to start higher on Wednesday as traders await clarity on the UKs services sector.
Spread-betters IG expect the blue-chip index to open up around 11 points after ending Tuesdays session 86 points higher at 6,823.
With the UKs lockdown set for another round of easing next Monday, businesses are gearing up for a resumption of trading that saw a flash PMI reading surge last month.
This rebound in activity suggests that businesses are building up inventory as well as preparing for a coiled spring rebound in [the second quarter], said Michael Hewson at CMC Markets, with non-essential retailers, hairdressers and pub beer gardens due to reopen for business from next week.
Aside from the UK services PMI, investors will also be eyeing the latest set of minutes from the Federal Reserve to discern any more detail about the US central banks approach to possible interest rate rises and economic forecasts for the coming years.
Predictions of a higher start in London followed a sluggish session for Wall Street overnight, with the Dow Jones Industrial Average closing 0.29% lower at 33,430 while the S&P 500 dropped 0.1% to 4,073 and the Nasdaq fell 0.05% to 13,698.
The picture was more mixed in Asia this morning, with Japans Nikkei 225 rising 0.13% while Hong Kongs Hang Seng fell 0.8%.
On currency markets, the pound was up 0.01% against the dollar at US$1.382, although the services data and Fed minutes later today could provide some movement catalysts.
Around the markets:
Sterling: US$1.382, up 0.01%
Brent crude: US$63.03 a barrel, up 0.46%
Gold: US$1,738.57 an ounce, up 0.59%
Bitcoin: US$57,743, down 1.87%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mixed on Wednesday following overnight losses on Wall Street, where U.S. stocks fell from record levels.
The Hang Seng index in Hong Kong slipped 0.74% while the Shanghai Composite in China dropped 0.51%.
In Japan, the Nikkei 225 rose 0.14% and South Koreas Kospi gained 0.22%.
Shares in Australia traded higher, with the S&P/ASX 200 advancing 0.52%.
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