London midday: Banks pace the decline as RBS, StanChart disappoint
Banking stocks paced the decline in London on Friday as investors waded through a deluge of earnings, with RBS and Standard Chartered in focus after disappointing results.
The FTSE 100 index was down 0.7% or 51 points to 7,220.29 just after midday, with mining stocks adding to the downside, while the mid cap index was off 0.4% at 18,572.8.
Spreadex's Connor Campbell said: "The FTSE found itself down by half a percent as the morning continued, taking the UK index to its worst level in just over a fortnight. The thrust of this decline stemmed from the banking sector, which hasn’t quite been the boost the FTSE was looking for this week."
Royal Bank of Scotland fell after saying its losses widened in the year to 31 December – its ninth consecutive loss – as the bank was hit by legacy issues. It reported a loss of £6.96bn for 2016, bigger than the £1.98bn loss it posted the year before. The bank was faced with litigation and conduct costs of £5.9bn, which includes a £3.1bn provision in relation to the mis-selling of mortgage-backed securities in the US in the run-up to the financial crisis.
The picture was no brighter for Standard Chartered, whose shares slumped after the bank said operating income dropped in 2016 and held off from paying a dividend, but reported better underlying profits.
Micro Focus retreated after reconfirming that it did not expect to grow revenue in its current financial year.
Property website Rightmove edged down despite reporting a rise in full-year 2016 pre-tax profit to £161.5m from £137.1m a year ago.
Engineer IMI was also on the back foot after it said pre-tax profit in 2016 slipped to £208m from £219m the previous year.
Jupiter Fund Management was weaker after it posted a jump in profit for 2016 but said inflows for the year nearly halved.
On the upside, Standard Life gained as it said revenue for 2016 grew “against a backdrop of volatile investment markets” as the insurer aims to increase its exposure to the Indian market through the acquisition of Max Life.
British Airways and Iberia parent International Consolidated Airlines Group flew higher after it announced a new share buyback and reported improved profits in the fourth quarter of last year and guidance for continued improvement in 2017.
Education publisher Pearson, which issued a profit warning in January, advanced after it held its dividend steady as full year pre-tax losses widened to £2.5bn from £433m in 2015.
Bookmaker William Hill racked up healthy gains as it said group net revenue was up 1% to £1.6bn in the year to 27 December.
On the macro front, data released earlier showed the British Bankers' Association approved 44,657 mortgages last month, up from 43,581 in December and the highest number since January last year.
The figures were also ahead of analysts' expectations of 41,900.
House purchase approvals were down 2.5% compared to January last year but above the 2016 monthly average of 41.320.
Gross mortgage borrowing totalled £13.8bn, up 6.3% on January last year, while re-mortgaging approvals in January were 15.7% higher on the year at 28,862, driven by historically low interest rates.
Market Movers
FTSE 100 (UKX) 7,227.86 -0.60%
FTSE 250 (MCX) 18,603.26 -0.22%
techMARK (TASX) 3,361.64 -0.20%
FTSE 100 - Risers
Pearson (PSON) 683.00p 5.73%
International Consolidated Airlines Group SA (CDI) (IAG) 516.50p 2.38%
easyJet (EZJ) 930.00p 1.69%
Taylor Wimpey (TW.) 177.20p 1.08%
Centrica (CNA) 227.20p 0.93%
Bunzl (BNZL) 2,197.00p 0.92%
Barratt Developments (BDEV) 514.00p 0.88%
Randgold Resources Ltd. (RRS) 7,660.00p 0.86%
Provident Financial (PFG) 2,915.00p 0.83%
Hikma Pharmaceuticals (HIK) 2,083.00p 0.73%
FTSE 100 - Fallers
Standard Chartered (STAN) 718.70p -4.30%
Rio Tinto (RIO) 3,290.50p -3.73%
Royal Bank of Scotland Group (RBS) 240.50p -3.57%
Micro Focus International (MCRO) 2,174.00p -2.90%
BHP Billiton (BLT) 1,311.00p -2.71%
Ashtead Group (AHT) 1,638.00p -2.67%
CRH (CRH) 2,631.00p -2.37%
Glencore (GLEN) 323.65p -2.32%
Mediclinic International (MDC) 735.00p -2.07%
Antofagasta (ANTO) 807.50p -2.06%
FTSE 250 - Risers
OneSavings Bank (OSB) 372.90p 3.53%
Essentra (ESNT) 525.50p 3.04%
TalkTalk Telecom Group (TALK) 170.50p 3.02%
Restaurant Group (RTN) 323.90p 2.83%
Big Yellow Group (BYG) 738.50p 2.07%
Inmarsat (ISAT) 679.50p 2.03%
Dunelm Group (DNLM) 640.50p 1.99%
Redrow (RDW) 490.50p 1.91%
McCarthy & Stone (MCS) 186.70p 1.80%
William Hill (WMH) 266.60p 1.79%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 540.00p -5.76%
Vedanta Resources (VED) 878.00p -5.74%
Rightmove (RMV) 4,052.00p -4.55%
Evraz (EVR) 226.20p -4.44%
Ferrexpo (FXPO) 159.40p -4.09%
Hunting (HTG) 524.00p -3.85%
Amec Foster Wheeler (AMFW) 425.60p -3.23%
Drax Group (DRX) 336.30p -3.11%
Jupiter Fund Management (JUP) 419.10p -2.72%
Aldermore Group (ALD) 230.90p -2.61%