London midday: Stocks in the green as traders eye election results
By Michele Maatouk
Date: Thursday 12 Dec 2019
(Sharecast News) - London stocks were higher by midday on Thursday, with sterling weaker as Britons headed to the polls to cast their votes in the general election.
The FTSE 100 was up 0.6% at 7,261.00, extending earlier gains as the pound fell 0.2% against the dollar to 1.3164 and 0.3% versus the euro to 1.1824.
London Capital Group analyst Jasper Lawler said: "The base case scenario of somewhere between a 10-40 seat Conservative majority government is still odds on. The polls have tightened but bookmakers' odds are still stacked heavily in favour of a Boris win.
"If the election gives the Conservatives a working majority in parliament and assuming global sentiment holds up, we'd expect the negative FTSE-GBP relationship to break down temporally, meaning investors simultaneously price in a better economic outcome for Britain by buying sterling while also loading up on the relative value to be found in UK-listed shares."
Investors were also mulling the latest policy announcement from the Federal Reserve, which said overnight that it had voted unanimously to keep interest rates unchanged, as widely expected. The US central bank also signalled that there would be no rate hikes next year.
Later in the day, attention will turn to the European Central Bank's latest policy announcement.
Although the UK election was at the forefront of investors' minds, Sino-US trade talks remained in focus following reports that US President Donald Trump will meet with his top advisors on Thursday to discuss what to do about Sunday's scheduled tariff deadline.
"The markets are desperate for a 'phase one' deal or, failing that, at least a tariff delay - if Washington does indeed go ahead with the hike, things could be pretty ugly on Monday morning," said Markets.com analyst Neil Wilson.
On home shores, the latest survey from the Royal Institution of Chartered Surveyors showed that house prices fell in November amid uncertainty about Brexit and the general election.
The RICS house price balance dropped to -12 from -5 in October, hitting its lowest level since April. Analysts had expected it to remain unchanged.
Meanwhile, the new buyer enquiries balance rose to -9 in November from -15 the month before.
RICS chief economist Simon Rubinsohn said: "Confidence is critical to a well-functioning housing market and whatever happens in the general election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit which continues to highlighted in a disproportionate number of remarks made by respondents to the RICS survey."
In equity markets, Standard Chartered was sitting pretty at the top of the FTSE 100 as it agreed to sell a stake in Indonesia's Bank Permata for $1.3bn.
JD Sports was up, recovering from heavy losses on Wednesday following reports that its largest shareholder, Pentland Group, had sold 24 million shares in the sportswear retailer. Berenberg said in a note that the share price slump was a "good buying opportunity" as it hiked its price target on the stock.
British Airways and Iberia parent IAG flew higher after Deutsche Bank highlighted it as one of its most preferred picks in the sector for 2020.
Ocado was on the front foot after Ocado Retail, its joint venture with Marks & Spencer, reported a slight slowdown in sales growth in the fourth quarter. Retail revenue rose 10.8% during the period to £429.1m, in line with the company's guidance but down a little from 11.4% growth in the third quarter.
Construction group Balfour Beatty rallied as it said it expected full-year profit from operations to be slightly ahead of expectations after additional infrastructure Investment disposals in the second half.
Serco was on the rise as the outsourcer lifted its full-year revenue and profit outlook, while Dixons Carphone advanced even as it said profits in the first half fell 60%.
On the downside, John Laing Group retreated after the greenfield infrastructure investor said full-year net asset value will be "marginally" below market expectations.
Imperial Leather maker PZ Cussons was in the red after it warned that 2019 revenue and profit would be "modestly" below the previous year on a like-for-like basis amid "challenging" market conditions and announced the retirement of its chief executive.
Associated British Foods, 3i Group, Marston's and Cineworld were all weaker as their stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,261.00 0.62%
FTSE 250 (MCX) 20,695.20 0.23%
techMARK (TASX) 4,032.23 0.61%
FTSE 100 - Risers
Standard Chartered (STAN) 708.60p 2.52%
Flutter Entertainment (FLTR) 8,884.00p 2.49%
JD Sports Fashion (JD.) 745.00p 2.48%
International Consolidated Airlines Group SA (CDI) (IAG) 558.60p 2.27%
WPP (WPP) 978.80p 1.87%
Evraz (EVR) 359.80p 1.81%
InterContinental Hotels Group (IHG) 4,898.00p 1.76%
BAE Systems (BA.) 567.60p 1.72%
RSA Insurance Group (RSA) 539.60p 1.62%
Ocado Group (OCDO) 1,216.00p 1.54%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,429.00p -2.02%
Hikma Pharmaceuticals (HIK) 1,950.00p -1.32%
British Land Company (BLND) 593.80p -1.23%
United Utilities Group (UU.) 862.20p -1.21%
Severn Trent (SVT) 2,264.00p -1.01%
Berkeley Group Holdings (The) (BKG) 4,523.00p -0.88%
3i Group (III) 1,041.50p -0.76%
Land Securities Group (LAND) 933.20p -0.66%
Next (NXT) 6,864.00p -0.52%
ITV (ITV) 142.50p -0.49%
FTSE 250 - Risers
Tullow Oil (TLW) 59.90p 13.75%
Aston Martin Lagonda Global Holdings (AML) 604.60p 7.12%
Dixons Carphone (DC.) 139.75p 5.91%
Balfour Beatty (BBY) 238.60p 3.56%
Wood Group (John) (WG.) 352.00p 3.47%
Cairn Energy (CNE) 179.00p 3.11%
Pets at Home Group (PETS) 276.20p 2.45%
William Hill (WMH) 168.50p 2.40%
Grafton Group Units (GFTU) 824.00p 2.23%
Redrow (RDW) 688.00p 2.23%
FTSE 250 - Fallers
John Laing Group (JLG) 350.80p -10.83%
Marston's (MARS) 124.10p -4.10%
Syncona Limited NPV (SYNC) 203.00p -3.33%
Contour Global (GLO) 193.00p -3.21%
Riverstone Energy Limited (RSE) 400.50p -2.91%
Virgin Money UK (VMUK) 179.95p -2.73%
PPHE Hotel Group Ltd (PPH) 1,830.00p -2.66%
Shaftesbury (SHB) 908.00p -2.52%
Apax Global Alpha Limited (APAX) 166.50p -2.35%
TBC Bank Group (TBCG) 1,274.00p -2.00%
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