London midday: Stocks lose ground as Rolls-Royce slumps, sterling gains
By Michele Maatouk
Date: Thursday 09 Jul 2020
(Sharecast News) - London equity markets had fallen into the red by midday on Thursday, with Rolls-Royce pacing the decline after a first-half trading update, while a firmer pound also weighed on stocks.
The FTSE 100 was down 0.7% at 6,115.65, with sterling up 0.2% against the dollar at 1.2638, trading near its best level in nearly a month.
IG analyst Chris Beauchamp said sterling has enjoyed a good few days "and yesterday's statement from the Chancellor confirms that the UK government is looking to keep providing stimulus in various forms, even if the amounts discussed on Wednesday are smaller than those seen earlier in the year".
In equity markets, Rolls-Royce tumbled as it said its free cash outflow was £3bn in the first half of 2020 as widebody engine flying hours halved because of the "historic shock" to civil aviation caused by the Covid-19 crisis. The engine maker said it expected performance to improve in the second half and that annual free cash outflow would be about £4bn. It warned that the civil aviation industry would take several years to recover but said its defence business was resilient.
SSE and National Grid were also under the cosh after energy regulator Ofgem said network operators should invest £25bn from 2021 to 2026 to deliver emissions-free energy. It also proposed cutting the returns companies can make to reduce household bills. Both SSE and National Grid said they were "disappointed" with the plans.
Recruiter PageGroup was weaker as it said second-quarter gross profit slid 47.6%.
On the upside, Persimmon was the standout gainer on the top-flight index after it reported a drop in half-year revenues and completions due to the pandemic but said demand since its reopening has been "positive", with weekly average net private sales reservations of 278 new homes being around 30% higher than the same period a year ago
Other housebuilders followed suit, with Barratt Developments, Taylor Wimpey and Berkeley all higher.
Ladbrokes owner GVC Holdings rallied after saying it had agreed with joint-venture partner MGM Resorts to increase investment in its US sports betting and online gaming business.
On the FTSE 250, Vistry rallied after saying improving demand as the lockdown eased would help to restore gross margin in the second half of the year.
Market Movers
FTSE 100 (UKX) 6,115.65 -0.66%
FTSE 250 (MCX) 17,185.34 0.00%
techMARK (TASX) 3,683.97 -0.21%
FTSE 100 - Risers
Persimmon (PSN) 2,570.00p 5.63%
GVC Holdings (GVC) 836.20p 3.26%
Taylor Wimpey (TW.) 145.95p 3.18%
Berkeley Group Holdings (The) (BKG) 4,372.00p 3.14%
Next (NXT) 4,806.00p 2.85%
Antofagasta (ANTO) 996.60p 2.70%
Avast (AVST) 559.50p 2.19%
Barratt Developments (BDEV) 533.40p 2.18%
Fresnillo (FRES) 926.20p 1.94%
Scottish Mortgage Inv Trust (SMT) 915.50p 1.78%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 263.70p -8.37%
National Grid (NG.) 851.80p -5.27%
British American Tobacco (BATS) 2,941.00p -3.53%
SSE (SSE) 1,298.50p -3.17%
Informa (INF) 436.20p -2.37%
United Utilities Group (UU.) 865.80p -2.37%
Land Securities Group (LAND) 554.80p -2.12%
Severn Trent (SVT) 2,386.00p -2.09%
Ocado Group (OCDO) 1,998.50p -2.08%
Compass Group (CPG) 1,102.00p -2.04%
FTSE 250 - Risers
Babcock International Group (BAB) 296.20p 4.81%
Pantheon International (PIN) 2,135.00p 4.66%
Marks & Spencer Group (MKS) 99.10p 4.32%
Scottish Inv Trust (SCIN) 769.00p 3.92%
ICG Enterprise Trust (ICGT) 770.00p 3.77%
PPHE Hotel Group Ltd (PPH) 1,100.00p 3.77%
Cineworld Group (CINE) 57.50p 3.72%
C&C Group (CCR) 237.00p 3.49%
Grafton Group Units (GFTU) 661.50p 3.36%
Carnival (CCL) 967.60p 3.35%
FTSE 250 - Fallers
Pagegroup (PAGE) 358.20p -5.54%
Hammerson (HMSO) 81.10p -5.30%
Trainline (TRN) 422.20p -4.05%
Micro Focus International (MCRO) 351.30p -3.46%
Drax Group (DRX) 249.00p -3.34%
Energean (ENOG) 491.00p -3.16%
CLS Holdings (CLI) 186.40p -3.12%
Future (FUTR) 1,190.00p -2.94%
Aston Martin Lagonda Global Holdings (AML) 46.00p -2.83%
BMO Commercial Property Trust Limited (BCPT) 59.80p -2.76%
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