London close: FTSE 100 fractionally higher as stocks pause for breath

The top flight index closed marginally higher, brushing off a threat from US President Donald Trump to allow a shutdown of the federal government if funding was not provided for the wall he promised on his campaign trail along the US/Mexico border.

He also threatened to terminate the NAFTA (North American Trade Agreement) treaty after talks between the US, Mexico and Canada failed to bridge deep differences.

Helped by weakness in Sterling, investors also managed to shake-off a sharp drop in advertising giant WPP's share price on the back of a disappointing set of interim results.

At the closing bell, the FTSE 100 was slightly higher at 7,382.65, up 0.01% on the day, while the pound was 0.31% lower versus the dollar at 1.2784 and 0.66% softer against the euro - and near an eight-year low - at 1.0834, as the single currency got a boost from solid manufacturing data.

European markets all closed lower with the DAX down 0.45% to 12,174.30, the CAC 40 lower to 5,115.39 and the IBEX 35 down 0.69% to 10,338.10.

IHS Markit's flash eurozone composite index - which measures activity in both sectors – nudged up to 55.8 from 55.7 in July, beating expectations for a reading of 55.5.

Meanwhile, manufacturing activity grew at the fastest pace since April 2011. The manufacturing PMI rose to 57.4 from 56.6 the month before and ahead of expectations for a decline to 56.3. This helped to offset a drop in the services index to a seven-month low of 54.9 from 55.4 in July.

Spreadex analyst Connor Campbell said weakness in the pound was also likely to be down to a renewed bout of Brexit bearishness.

"With little else going on in the UK, it seems investors have been left to speculate about the state of the Brexit negotiations, rarely a good thing for the health of the pound," he said.

In corporate news, shares in WPP tumbled after it reported slightly weaker than expected top and bottom line growth at the half year stage and cut its growth forecast for 2017.

Facilities management and construction services group Carillion also fell sharply, with traders pointing to a build-up in short positions in the stock as a possile trigger.

Subprime lender Provident Financial was in the black, clawing back a bit of ground following a 66% plunge on Tuesday on the heels of its second profit warning in two months and after it withdrew its dividend, announced the departure of its CEO and revealed an FCA investigation into Vanquis Bank.

Tesco gained ground after saying it will open a compensation scheme for eligible shareholders and bondholders who were misled by a trading statement in august 2014 that overstated the company's half-year profits.

Playtech edged up as it said it has agreed to buy technology, intellectual property and certain customer assets from ACM for up to $150m as it continues to enhance its financials division's B2B offering.

UAE-based NMC Health rallied after signing a new operations and maintenance contract for the management of Emirates Healthcare assets, comprising three brands and saying it expects full year earnings to be towards the top end of the current guidance range.

Hansteen advanced as the industrial property investor reported a 186% jump in first-half profit following the sale of its German and Dutch portfolio.

Vedanta Resources was in the black after it said first-quarter earnings and revenue were "significantly higher" on the back of higher commodity prices and volumes, while Meggitt was boosted by an upgrade to 'buy' out of Jefferies.

Market Movers

FTSE 100 (UKX) 7,382.65 0.01%
FTSE 250 (MCX) 19,743.22 -0.04%
techMARK (TASX) 3,391.38 0.16%

FTSE 100 - Risers

Provident Financial (PFG) 661.00p 12.13%
Antofagasta (ANTO) 994.00p 2.31%
Rio Tinto (RIO) 3,615.00p 2.13%
Tesco (TSCO) 187.10p 1.57%
Fresnillo (FRES) 1,564.00p 1.56%
Morrison (Wm) Supermarkets (MRW) 252.90p 1.53%
Anglo American (AAL) 1,324.00p 1.38%
AstraZeneca (AZN) 4,495.00p 1.38%
Glencore (GLEN) 353.10p 1.29%
BHP Billiton (BLT) 1,411.00p 1.15%

FTSE 100 - Fallers

WPP (WPP) 1,420.00p -10.92%
Paddy Power Betfair (PPB) 7,000.00p -2.71%
ITV (ITV) 162.60p -1.87%
easyJet (EZJ) 1,270.00p -1.78%
Ferguson (FERG) 4,582.00p -1.61%
Barratt Developments (BDEV) 606.50p -1.54%
Standard Life Aberdeen (SLA) 430.70p -1.42%
Pearson (PSON) 613.00p -1.37%
Whitbread (WTB) 3,801.00p -1.30%
Informa (INF) 691.00p -1.29%

FTSE 250 - Risers

NMC Health (NMC) 2,593.00p 7.15%
Evraz (EVR) 289.20p 6.72%
Hikma Pharmaceuticals (HIK) 1,242.00p 4.55%
Vedanta Resources (VED) 808.50p 4.05%
Acacia Mining (ACA) 201.00p 2.87%
TBC Bank Group (TBCG) 1,600.00p 2.70%
Vesuvius (VSVS) 570.50p 2.61%
Meggitt (MGGT) 510.00p 2.51%
Fisher (James) & Sons (FSJ) 1,539.00p 2.46%
Hansteen Holdings (HSTN) 129.80p 2.37%

FTSE 250 - Fallers

Carillion (CLLN) 42.56p -11.41%
IP Group (IPO) 121.00p -5.25%
Auto Trader Group (AUTO) 338.90p -4.75%
Greencore Group (GNC) 208.00p -4.72%
Dixons Carphone (DC.) 235.30p -2.73%
Pets at Home Group (PETS) 178.00p -2.04%
Hill & Smith Holdings (HILS) 1,293.00p -1.83%
Fidessa Group (FDSA) 2,108.00p -1.82%
Ocado Group (OCDO) 285.00p -1.72%
Balfour Beatty (BBY) 274.50p -1.61%