London midday: Stocks maintain gains as sterling ticks higher
By Michele Maatouk
Date: Friday 16 Aug 2019
(Sharecast News) - London stocks were still in the green by midday on Friday, bouncing back from heavy losses in the previous session, but underperforming their European peers somewhat as sterling ticked higher.
The FTSE 100 was up 0.6% at 7,105.85, having opened late after a technical software issue at the London Stock Exchange affected trading in the top-flight index and its sister FTSE 250.
In currency markets, the pound was up 0.6% against the dollar at 1.2159 and 0.8% firmer versus the euro at 1.0977, underpinned by a recent slew of upbeat economic data and growing opposition to a no-deal Brexit.
Neil Wilson, chief market analyst at Markets.com, said: "Sterling has stabilised above 1.21. The Remain rebels are girding themselves for the assault." He pointed to signs that it may be trickier for Boris Johnson to force through a no deal Brexit.
Meanwhile, Oanda analyst Craig Erlam said that while investors appear "more relaxed" on Friday, recession fears are still "alive and well" and "it would be naive to expect it to continue".
"This week everyone has become obsessed with the inverted yield curve and whether it means we're headed for recession or if it's 'different this time'. Of course, it's always different this time. Although there are good arguments why 'this time' that may actually be true.
"The problem we have is that if enough people are convinced, it could become self-fulfilling. The reality is that this is just a trend that has been reliable over the last 50 years or so, rather than having any solid foundation. If Trump and Xi miraculously resolve the trade war tomorrow, are we still headed for recession? I would think not and the curve would adjust to reflect that.
"At this stage though, there's probably more reason to have faith in an indicator like to 2-10 inversion than the US and China bringing an end to this unnecessary damaging exercise. Trump is happy to continue to blame the Fed for any evidence of the trade war hurting the US while both sides seem happy to see this through and accept the consequences."
In equity markets, Hiscox gained after an upgrade to 'overweight' at Morgan Stanley.
ITV was also in the green after Spain's La Liga said it signed an initial deal for its matches to be shown on the London-listed broadcaster's free-to-air network in the UK.
Ultra Electronics rallied after saying that it and joint venture partner Sparton DeLeon Springs have won a contract worth up to $1.04bn to manufacture sonobuoys for the US Navy.
On the downside, Acacia Mining edged lower as it said it had resumed gold exports from its North Mara mine after receiving export permits from the Tanzanian government, but warned that production at the plant was still halted over a ban on the use of its tailings facility.
Elsewhere, Ted Baker shares slipped after it signed a five-year deal with Next to produce and sell Ted Baker childrenswear from spring 2020.
In broker note action, BHP was downgraded to 'underperform' at Bank of America Merrill Lynch, while Ferrexpo was double-downgraded to 'underperform' and Glencore was cut to 'neutral'.
Market Movers
FTSE 100 (UKX) 7,105.85 0.55%
FTSE 250 (MCX) 18,699.65 0.32%
techMARK (TASX) 3,785.11 0.38%
FTSE 100 - Risers
NMC Health (NMC) 1,869.00p 3.26%
Ashtead Group (AHT) 2,086.00p 2.15%
ITV (ITV) 105.80p 2.12%
Royal Bank of Scotland Group (RBS) 181.00p 1.89%
British Land Company (BLND) 476.80p 1.82%
Hiscox Limited (DI) (HSX) 1,607.00p 1.77%
WPP (WPP) 953.20p 1.73%
Standard Life Aberdeen (SLA) 242.10p 1.68%
St James's Place (STJ) 929.80p 1.66%
Schroders (SDR) 2,697.00p 1.62%
FTSE 100 - Fallers
Fresnillo (FRES) 658.60p -1.88%
Evraz (EVR) 490.40p -1.70%
Kingfisher (KGF) 190.00p -0.96%
British American Tobacco (BATS) 3,022.00p -0.90%
International Consolidated Airlines Group SA (CDI) (IAG) 413.60p -0.65%
Centrica (CNA) 64.68p -0.43%
Imperial Brands (IMB) 2,079.50p -0.41%
Next (NXT) 5,628.00p -0.21%
Unilever (ULVR) 4,971.50p -0.10%
TUI AG Reg Shs (DI) (TUI) 744.40p -0.05%
FTSE 250 - Risers
Kaz Minerals (KAZ) 440.10p 5.01%
CYBG (CYBG) 139.10p 4.82%
Balfour Beatty (BBY) 218.80p 3.11%
Elementis (ELM) 137.40p 3.08%
Hunting (HTG) 425.60p 2.75%
GVC Holdings (GVC) 559.80p 2.68%
Premier Oil (PMO) 66.78p 2.64%
Bakkavor Group (BAKK) 95.70p 2.57%
Marshalls (MSLH) 631.50p 2.43%
Synthomer (SYNT) 297.80p 2.41%
FTSE 250 - Fallers
Riverstone Energy Limited (RSE) 658.00p -3.52%
Intu Properties (INTU) 37.61p -3.19%
Hochschild Mining (HOC) 209.20p -2.88%
Acacia Mining (ACA) 241.20p -2.74%
Hilton Food Group (HFG) 929.00p -2.62%
Cineworld Group (CINE) 207.15p -2.29%
Bank of Georgia Group (BGEO) 1,309.00p -1.95%
Apax Global Alpha Limited (APAX) 153.00p -1.92%
NewRiver REIT (NRR) 145.20p -1.89%
IP Group (IPO) 61.50p -1.76%
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