London midday: Stocks turn green but gains limited as pound breaches $1.25
By Michele Maatouk
Date: Friday 11 Oct 2019
(Sharecast News) - The Footsie had moved into the green by midday on Friday, with banks and housebuilders up on Brexit hopes, but gains were limited and London markets significantly underperformed their European counterparts as sterling surged past the $1.25 mark.
Just before midday, the FTSE 100 was 0.2% firmer at 7,200.55, while the pound was up 1.2% against the dollar at 1.2587 and 0.9% higher versus the euro at 1.1399 as investors cheered positive comments from European Council President Donald Tusk.
In a televised statement in Cyprus, Tusk said: "Unfortunately we are still in a situation in which the UK has not come forward with a workable, realistic proposal."
However, he also said he had received "promising signals that a deal is still possible" from Irish premier Leo Varadkar, who met with UK Prime Minister Boris Johnson on Thursday.
"Technical talks are taking place in Brussels as we speak. Of course there's no guarantee of success and the time is practically up, but even the slightest chance must be used," Tusk said.
Brexit Secretary Stephen Barclay is back in Brussels for talks with the EU's chief Brexit negotiator, Michel Barnier after Johnson and Varadkar said on Thursday that they could see "a pathway" to a possible deal. Sterling surged to its best levels in seven months on the back of their upbeat statement.
Banks and housebuilders were the standout gainers, with RBS, Lloyds, Barclays, Barratt Developments, Persimmon and Taylor Wimpey all sharply higher, while B&Q owner Kingfisher was sitting pretty at the top of the FTSE 100.
The tone was also lifted by signs of progress in Sino-US trade talks after US President Trump said on Thursday that discussions between the two nations were going "really well".
Joshua Mahony, senior market analyst at IG, said: "With Trump expected to meet the Chinese Vice Premier today, there is a growing sense of optimism over a potential deal that could at least deescalate the situation by delaying or postponing currently planned tariffs. Suggestions of a currency pact point towards a short-term solution that could appease Trump for now, buying room for both sides to continue negotiating without the threat of the December tariffs hanging over talks."
London equity markets underperformed their peers in Europe, however, with the benchmark Stoxx 600 index up 1.3% at 387.79. A stronger pound tends to dent the FTSE 100 as around 70% of its constituents derive most of their earnings from overseas.
The more domestically-focused FTSE 250 fared a lot better, trading up 2.4% at 19,694.16 and heading towards its best daily performance since January.
In individual stocks, advertising giant WPP slumped after French rival Publicis cut its 2019 sales outlook, while Burberry was under pressure after German luxury fashion brand Hugo Boss downgraded its 2019 earnings forecast.
Elsewhere, oil prices rose following reports that an Iranian oil tanker had been struck by two missiles in the Red Sea near Saudi Arabia. West Texas Intermediate was up 1.6% at $54.55 barrel and Brent crude was 1.5% higher at $60.05.
Market Movers
FTSE 100 (UKX) 7,200.55 0.20%
FTSE 250 (MCX) 19,694.16 2.38%
techMARK (TASX) 3,810.64 -0.46%
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 217.44p 11.02%
Kingfisher (KGF) 213.60p 10.79%
Barratt Developments (BDEV) 646.88p 10.24%
Lloyds Banking Group (LLOY) 57.76p 9.66%
Persimmon (PSN) 2,248.00p 8.97%
Taylor Wimpey (TW.) 159.29p 7.81%
International Consolidated Airlines Group SA (CDI) (IAG) 495.20p 7.40%
Next (NXT) 6,380.00p 7.19%
TUI AG Reg Shs (DI) (TUI) 984.31p 7.06%
Berkeley Group Holdings (The) (BKG) 4,297.00p 7.05%
FTSE 100 - Fallers
British American Tobacco (BATS) 2,697.00p -4.02%
WPP (WPP) 927.80p -3.74%
GlaxoSmithKline (GSK) 1,649.00p -3.68%
Intertek Group (ITRK) 5,090.00p -3.60%
Burberry Group (BRBY) 1,976.50p -3.49%
Diageo (DGE) 3,212.00p -3.30%
AstraZeneca (AZN) 6,850.00p -2.86%
Unilever (ULVR) 4,643.58p -2.84%
Relx plc (REL) 1,818.50p -2.70%
Reckitt Benckiser Group (RB.) 6,015.00p -2.59%
FTSE 250 - Risers
Grafton Group Units (GFTU) 797.59p 10.32%
Galliford Try (GFRD) 693.18p 10.12%
CYBG (CYBG) 122.55p 9.96%
OneSavings Bank (OSB) 364.56p 9.94%
B&M European Value Retail S.A. (DI) (BME) 379.64p 9.19%
Marks & Spencer Group (MKS) 181.95p 9.18%
Crest Nicholson Holdings (CRST) 396.00p 9.15%
Polypipe Group (PLP) 423.00p 8.68%
Dunelm Group (DNLM) 792.50p 8.49%
Travis Perkins (TPK) 1,332.50p 8.47%
FTSE 250 - Fallers
Man Group (EMG) 158.85p -2.04%
Inmarsat (ISAT) 572.80p -1.68%
Ultra Electronics Holdings (ULE) 1,935.00p -1.43%
Sophos Group (SOPH) 418.20p -1.30%
JPMorgan Indian Investment Trust (JII) 718.00p -1.10%
Pershing Square Holdings Ltd NPV (PSH) 1,510.00p -1.05%
Finsbury Growth & Income Trust (FGT) 895.00p -0.89%
F&C Investment Trust (FCIT) 689.25p -0.54%
JPMorgan American Inv Trust (JAM) 466.01p -0.53%
PZ Cussons (PZC) 205.00p -0.49%
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