London midday: Stocks extend gains as sterling slides on Brexit woes
By Michele Maatouk
Date: Wednesday 08 Aug 2018
(Sharecast News) - London stocks had pushed further into the green by midday on Wednesday as Brexit worries sent the pound tumbling to its lowest level versus the dollar in nearly a year.
The FTSE 100 was up 0.8% to 7,782.65 as sterling dropped below $1.29, trading down 0.5% to 1.2880. Against the euro, the pound was 0.4% weaker at 1.1106 - its lowest level since November - amid jitters about the potential for a no-deal Brexit.
Lukman Otunuga, research analyst at FXTM, said: "Concerns of a potential hard Brexit scenario have haunted investor attraction towards the pound and have left the currency vulnerable to downside shocks.
"The currency is likely to remain depressed ahead of Friday's second quarter UK GDP report, which could offer fresh insight into the health of Britain's economy. While a solid GDP print could throw the bruised pound a short-term lifeline, any meaningful gains may be obstructed by Brexit-related uncertainty and an appreciating dollar."
A weaker sterling tends to benefit the top-flight index as around 70% of its constituents derive most of their earnings from abroad.
Despite the positive tone, trade war concerns were never far from investors' minds as the US said it will start collecting 25% tariffs on $16bn worth of Chinese imports from 23 August.
Market participants were also digesting trade balance data from China overnight, which showed that exports in July rose 12.2%, up from 11.2% the month before and beating expectations for a 10% jump. Imports increased 27.3% compared to a 14.1% rise in June and ahead of analysts' forecasts for a 16.2% increase.
Meanwhile, China's surplus with the US shrank a touch to $28.09bn last month from a record $28.97bn in June.
In corporate news, Spirax-Sarco Engineering was on the front foot after posting a rise in first-half operating profit, while Hastings Group edged up after reporting a jump in first-half pre-tax profit as gross written premiums and net revenue grew and saying it remains on track to deliver on its 2019 targets.
Quilter, formerly Old Mutual Wealth Management, advanced following the release of its maiden set of results as a standalone company, while recruiter PageGroup ticked up after saying that first-half revenue rose 12%.
Going the other way, Glencore was down but well off earlier lows as its adjusted earnings for the first half fell slightly short of analysts' expectations.
Paddy Power Betfair was under the cosh as it lowered its guidance for full-year earnings before interest, taxes, depreciation and amortisation to between £460m and £480m from between £470m and £490m, partly due to losses from the FanDuel daily fantasy sports business
Bellway was weaker after the housebuilder said it has broken through the 10,000 homes barrier for the first time and reported a jump in full-year revenue but warned over a slowdown in house price growth.
UDG Healthcare slumped as it released a third-quarter trading update and announced the sale of its Aquilant division for up to €23m.
Hill & Smith tumbled as the infrastructure supplier posted a 12% drop in first-half core earnings and warned that it does not expect to make up for the fall in profits seen in the first half of the year.
In broker note action, Rio Tinto was upgraded to 'add' at AlphaValue and Countrywide was lifted to 'neutral' at Credit Suisse.
Pendragon was boosted to 'neutral' at JPMorgan, while BBA Aviation was upgraded to 'buy' at Investec. Spire Healthcare was under the cosh after a double downgrade to 'sell' at Berenberg and Rotork was downgraded to 'hold' at SocGen.
Market Movers
FTSE 100 (UKX) 7,782.65 0.83%
FTSE 250 (MCX) 20,761.02 0.41%
techMARK (TASX) 3,622.96 0.34%
FTSE 100 - Risers
Standard Life Aberdeen (SLA) 329.66p 2.60%
Burberry Group (BRBY) 2,226.00p 2.34%
Ashtead Group (AHT) 2,401.00p 2.26%
Hargreaves Lansdown (HL.) 2,076.00p 2.22%
InterContinental Hotels Group (IHG) 4,701.00p 2.04%
Rentokil Initial (RTO) 332.80p 1.77%
Scottish Mortgage Inv Trust (SMT) 560.50p 1.63%
Carnival (CCL) 4,496.00p 1.63%
Smith (DS) (SMDS) 514.20p 1.58%
Whitbread (WTB) 3,965.00p 1.54%
FTSE 100 - Fallers
Paddy Power Betfair (PPB) 7,715.00p -4.99%
Ocado Group (OCDO) 1,053.50p -0.61%
British Land Company (BLND) 645.89p -0.60%
Associated British Foods (ABF) 2,455.00p -0.24%
London Stock Exchange Group (LSE) 4,528.00p -0.24%
Glencore (GLEN) 325.60p -0.21%
Berkeley Group Holdings (The) (BKG) 3,729.00p -0.19%
Lloyds Banking Group (LLOY) 62.29p -0.10%
GVC Holdings (GVC) 1,134.00p -0.09%
Halma (HLMA) 1,403.88p -0.08%
FTSE 250 - Risers
TI Fluid Systems (TIFS) 266.00p 6.40%
Inmarsat (ISAT) 568.80p 5.37%
Kaz Minerals (KAZ) 638.40p 4.52%
Synthomer (SYNT) 564.66p 3.32%
AA (AA.) 114.24p 3.15%
Sirius Minerals (SXX) 38.07p 3.11%
Aggreko (AGK) 846.60p 3.04%
Meggitt (MGGT) 576.40p 2.78%
FDM Group (Holdings) (FDM) 1,016.00p 2.52%
Pagegroup (PAGE) 614.00p 2.50%
FTSE 250 - Fallers
Hill & Smith Holdings (HILS) 1,176.00p -20.00%
Spire Healthcare Group (SPI) 169.70p -10.59%
UDG Healthcare Public Limited Company (UDG) 772.50p -5.74%
Bellway (BWY) 2,894.00p -2.79%
Just Group (JUST) 96.40p -2.63%
Polypipe Group (PLP) 359.60p -2.60%
On The Beach Group (OTB) 423.50p -1.74%
Daejan Holdings (DJAN) 6,030.00p -1.47%
Ultra Electronics Holdings (ULE) 1,589.00p -1.24%
Renishaw (RSW) 5,320.00p -1.12%
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