London midday: Stocks nudge lower despite pound falling to five-month low
London stocks had nudged a touch lower by midday on Monday even as the pound fell to its worst level in five weeks against the dollar amid a new parliamentary Brexit conflict, with investors looking for fresh catalysts following an easing of geopolitical tensions.
The FTSE 100 was down 0.1% to 7,364.80, while the pound was up 0.2% versus the euro at 1.1411 but 0.3% weaker versus the greenback at 1.3956, as reports of a potential cabinet revolt followed a bruising week where sterling was hammered by disappointing wage growth, inflation and retail sales data and dovish comments from Bank of England governor Mark Carney.
Spreadex analyst Connor Campbell said: "One could argue the FTSE had to work hard not to post any growth this Monday, given that it has so many factors in its favour.
"Not only was there the easing of macro-political tensions on two fronts - North Korea’s nuclear retreat, and the reduced chances of a US-China trade war - but a soft showing from sterling. The pound, like the euro, dropped half a percent against the dollar as rising US bond yields got rate hike hawks all hot under the collar."
As far as the geopolitical situation is concerned, Rebecca O'Keeffe, head of investment at Interactive Investor, said that despite some optimism that the US and China will reach a truce on trade tariffs, "investors are not putting out the bunting yet".
"Discussions between the world’s two largest economies are likely to be protracted and the negotiation style of President Trump provocative," she said.
In corporate news, outsourcer Capita surged as investors liked the sound of its new strategy that comes on the back of a "significant deterioration" in new business wins and a £513m annual loss before tax.
Shares in Whitbread rose following a Sunday Times report suggesting that chief executive Alison Brittain is open to the idea of spinning off Costa Coffee from Premier Inn hotels.
BHP Billiton was up after saying that Brazil's federal court has allowed it to have more time to complete negotiations regarding the public civil claims related to the Samarco dam failure.
Industrial pump manufacturer Rotork rallied after posting a 10.2% jump in first-quarter revenue, with order intake up 21% thanks to more favourable market trends and the receipt of several significant orders.
Morgan Advanced Materials gained after reporting a 6.5% rise in sales for the first three months to March on an organic constant currency compared to the first quarter of last year.
Elsewhere, Shire was in the black after saying late on Friday that it was considering a sweetened offer from Japan's Takeda Pharmaceutical, while Workspace advanced after announcing the acquisition of two further Centro buildings in Camden for £76.5m in cash.
On the downside, FTSE 250 shipping services provider Clarkson sank after warning that both first-half and full-year profits are now expected to be "materially below" the previous year following a number of headwinds in the first quarter.
Private healthcare operator NMC Health retreated after saying it has launched an offering of senior, unsecured, guaranteed convertible bonds due 2025.
Great Portland Estates fell after it sold the freehold of 78/92 Great Portland Street and 15/19 Riding House Street to M&G Real Estate and secured a "substantial" pre-let of its Hannover Square development.
On the broker note front, Marks & Spencer was boosted by an upgrade to 'neutral' from 'underperform' by Credit Suisse, but consumer goods giant Reckitt Benckiser was hit by a downgrade to 'market perform' at Raymond James and a target price cut at JPMorgan.
RSA Insurance was initiated at 'hold' by Jefferies, while Weir was on the front foot as RBC Capital Markets upped its price target and reiterated its 'outperform' rating.
Market Movers
FTSE 100 (UKX) 7,364.80 -0.05%
FTSE 250 (MCX) 20,253.58 0.16%
techMARK (TASX) 3,428.52 0.22%
FTSE 100 - Risers
Direct Line Insurance Group (DLG) 378.67p 1.60%
Old Mutual (OML) 245.90p 1.36%
Antofagasta (ANTO) 964.60p 1.24%
St James's Place (STJ) 1,121.50p 1.08%
Rentokil Initial (RTO) 288.80p 0.87%
British American Tobacco (BATS) 3,731.00p 0.84%
Whitbread (WTB) 4,268.00p 0.78%
Experian (EXPN) 1,618.50p 0.75%
Berkeley Group Holdings (The) (BKG) 3,993.00p 0.68%
Smith (DS) (SMDS) 511.20p 0.67%
FTSE 100 - Fallers
National Grid (NG.) 794.40p -2.28%
NMC Health (NMC) 3,606.00p -2.22%
Reckitt Benckiser Group (RB.) 5,500.00p -2.22%
WPP (WPP) 1,121.42p -2.19%
Bunzl (BNZL) 2,091.00p -1.83%
United Utilities Group (UU.) 706.60p -1.48%
SSE (SSE) 1,310.00p -1.32%
Severn Trent (SVT) 1,857.00p -1.30%
GKN (GKN) 462.00p -1.26%
Fresnillo (FRES) 1,283.00p -1.16%
FTSE 250 - Risers
Capita (CPI) 178.25p 11.55%
Rotork (ROR) 329.10p 10.10%
Virgin Money Holdings (UK) (VM.) 288.41p 3.63%
Hikma Pharmaceuticals (HIK) 1,249.00p 3.39%
Petrofac Ltd. (PFC) 618.60p 3.17%
Weir Group (WEIR) 2,263.00p 2.82%
TI Fluid Systems (TIFS) 258.00p 2.38%
Cairn Energy (CNE) 227.20p 2.34%
Hastings Group Holdings (HSTG) 287.60p 2.28%
Vesuvius (VSVS) 592.50p 2.16%
FTSE 250 - Fallers
Clarkson (CKN) 2,492.20p -19.74%
Capital & Counties Properties (CAPC) 277.50p -3.14%
Fisher (James) & Sons (FSJ) 1,700.00p -2.41%
Contour Global (GLO) 252.00p -2.33%
Vietnam Enterprise Investments (DI) (VEIL) 466.00p -1.89%
Pennon Group (PNN) 645.40p -1.74%
Melrose Industries (MRO) 225.50p -1.61%
Vedanta Resources (VED) 730.20p -1.59%
Convatec Group (CTEC) 213.60p -1.57%
Woodford Patient Capital Trust (WPCT) 83.70p -1.53%