London midday: FTSE flat as Brexit worries intensify
The FTSE 100 was flat on Monday at midday as the pound plunged on Brexit worries and as banking shares slumped.
At 1157 GMT, the index fell 0.06% to 7,333.51 points.
The pound dropped 1.0% against the dollar to $1.2060 and declined 0.59% versus the euro to €1.1383 after a Sunday Times report that Prime Minister Theresa May will indicate in her speech on Tuesday that she plans to pursue a ‘hard’ Brexit and quit the European Union’s single market to gain more control over migration and the country’s laws.
A spokeswoman on Monday told Reuters the reports are "speculation".
IG chief market analyst Chris Beauchamp said: “Weakness in sterling has been the primary means by which the FTSE 100 has notched up its record-breaking run, but it promises to be a fun few days for the pound, what with the Prime Minister up tomorrow and Mark Carney speaking this evening. The title of the governor’s presentation is ‘Policy Issues affecting the Bank of England’, which effectively gives him leeway to talk on whatever he fancies – US markets might be shut for Martin Luther King Day but those trading sterling crosses have a long day ahead of them.”
Carney speaks at the London School of Economics at 1830 GMT.
Company-wise, Royal Bank of Scotland led banking shares lower after Goldman Sachs downgraded the stock to ‘neutral’ from ‘buy’ on valuation grounds and removed it from its Pan-Europe Buy List.
Goldman attributed the underperformance relative to the sector mainly due to the impact of the referendum outcome, which led it to significantly cut its earnings forecasts due to expectations of lower loan growth and rates and higher credit costs.
Barclays and Lloyds Banking Group were also in the red.
Housebuilders retreated, including Taylor Wimpey and Barratt Developments, on renewed Brexit fears.
Going the other way, mining stocks rallied as metal prices gained. Anglo American, Glencore and Rio Tinto were among the biggest risers on the FTSE.
Burberry advanced after it confirmed that new chief executive Marco Gobbetti will join the fashion retailer at the end of this month, sending its shares to an 18-month high.
In economic data, Rightmove said UK house prices in January rose 0.4% compared to a month ago and 3.2% compared to a year ago to an average asking price of £300,245.
The Eurozone’s trade surplus widened to €22.7bn in November from €19.9bn in October, compared to forecasts of €20.8bn, as exports exceed imports by €25.9bn.
Market Movers
FTSE 100 (UKX) 7,330.07 -0.11%
FTSE 250 (MCX) 18,312.15 -0.33%
techMARK (TASX) 3,421.74 -0.10%
FTSE 100 - Risers
Anglo American (AAL) 1,349.00p 1.47%
Mediclinic International (MDC) 803.50p 1.45%
Burberry Group (BRBY) 1,632.00p 1.30%
Glencore (GLEN) 320.50p 1.20%
Randgold Resources Ltd. (RRS) 6,785.00p 1.12%
Ashtead Group (AHT) 1,617.00p 1.06%
Imperial Brands (IMB) 3,627.50p 1.04%
Convatec Group (CTEC) 242.20p 1.04%
BHP Billiton (BLT) 1,468.00p 0.93%
Marks & Spencer Group (MKS) 342.10p 0.88%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 214.60p -2.94%
Barclays (BARC) 230.50p -2.02%
Persimmon (PSN) 1,962.00p -1.75%
Taylor Wimpey (TW.) 169.60p -1.74%
Prudential (PRU) 1,585.50p -1.67%
Barratt Developments (BDEV) 507.50p -1.65%
Aviva (AV.) 481.10p -1.64%
Lloyds Banking Group (LLOY) 65.00p -1.57%
Standard Life (SL.) 351.60p -1.54%
Legal & General Group (LGEN) 245.00p -1.49%
FTSE 250 - Risers
Ashmore Group (ASHM) 294.00p 3.70%
Acacia Mining (ACA) 430.00p 2.82%
Aggreko (AGK) 1,010.00p 2.28%
Vectura Group (VEC) 145.20p 2.04%
Hastings Group Holdings (HSTG) 236.70p 2.03%
Moneysupermarket.com Group (MONY) 302.00p 1.96%
JPMorgan Indian Investment Trust (JII) 639.00p 1.75%
Worldwide Healthcare Trust (WWH) 2,214.00p 1.51%
CLS Holdings (CLI) 1,552.00p 1.50%
Aveva Group (AVV) 1,970.00p 1.34%
FTSE 250 - Fallers
Allied Minds (ALM) 402.40p -4.67%
Ibstock (IBST) 179.80p -3.44%
Virgin Money Holdings (UK) (VM.) 314.20p -3.26%
Diploma (DPLM) 1,001.00p -3.10%
SIG (SHI) 106.00p -2.66%
OneSavings Bank (OSB) 324.40p -2.61%
Shawbrook Group (SHAW) 247.70p -2.60%
Mitie Group (MTO) 208.80p -2.38%
Berkeley Group Holdings (The) (BKG) 2,846.00p -2.17%
Crest Nicholson Holdings (CRST) 505.00p -1.94%