London close: Shares dip heading into G7 summit

London stocks ended on a mixed note on Friday as investors adopted a risk-off strategy ahead of what could be a heated G7 summit in Canada.

The FTSE 100 was down 0.30% to 7,681.07, while the pound was 0.15% lower against the dollar at 1.34035 and 0.1% firmer versus the euro at 1.1387.

The second-tier index on the other hand edged higher by 0.03% or 5.83 points to finish at 21,160.54.

Investors are expecting US President Trump to find himself isolated from other leaders at the Quebec summit. French President Emmanuel Macron has already warned that he won’t sign the traditional joint statement unless progress is made on tariffs, while Germany’s Angela Merkel is expected to challenge Trump on trade, climate and security.

IG market analyst Joshua Mahony said: "With the G7 meeting kicking off in somewhat acrimonious fashion, it is looking increasingly unlikely that we will see any form of positive outcome from a trade standpoint. Trump has already criticised Trudeau and Macron on Twitter, and the breakdown in trade that could come with a bitter war of words is certainly raising risks in financial markets."

Trump tweeted on Thursday: "Prime Minister Trudeau is being so indignant, bringing up the relationship that the US and Canada had over the many years and all sorts of other things...but he doesn’t bring up the fact that they charge us up to 300% on dairy - hurting our Farmers, killing our agriculture!"

Before that, he had said: "Please tell Prime Minister Trudeau and President Macron that they are charging the US massive tariffs and create non-monetary barriers. The EU trade surplus with the US is $151bn, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow."

Market participants were also digesting the latest quarterly survey from the Bank of England, which showed that public opinion on inflation expectations was stable despite inflation moderating to a 13-month low of 2.4% in April. Inflation expectations were steady on both a one-year and two-year horizon, while on a five-year horizon they picked up to their highest level since November 2013.

Mining stocks were being hit by a drop in copper prices, with US dollar strengthening fuelled by emerging market wobbles in the likes of Brazil, Mexico and Turkey, though safe-havens like gold are struggling, said analyst Mike van Dulken at Accendo Markets. He said this was "overpowering the benefit of a slightly weaker GBP as uncertainty prevails about UK PM Theresa May and Brexit."

In UK corporate news, BT was trading up as it announced that group chief executive Gavin Patterson will step down later this year after the telecoms giant's board wielded the axe after pressure from major shareholders.

Standard Life Aberdeen slumped after Lloyds Bank sold its remaining 3.3% stake in for £344m, with Lloyds shares falling too. The sale comes after Lloyds cancelled its £109bn arrangement with SLA in February.

Games Workshop slid after saying that it expects sales for the year to be around £219m, with a pre-tax profit of no less than £74m and royalties receivable of licensing at around £10m.

Chemicals maker Synthomer was in the red after saying it was included in an European Commission investigation into practices related to buying styrene monomer, a chemical used in making plastics, by companies operating in the European Economic Area.

Kaz Minerals was under the cosh after announcing that Non Ferrous China has agreed to invest $70m into its Koksay project, giving it a 19.4% stake. The stock was likely being hit by a downgrade to ‘neutral’ at JPMorgan.

In broker note action, Auto Trader was upgraded to ‘hold’ at Berenberg, while Capita was lifted to ‘outperform’ by RBC Capital Markets. Pets at Home was cut to ‘hold’ at Berenberg but upgraded to ‘equalweight’ by Morgan Stanley.

Market Movers

FTSE 100 (UKX) 7,681.07 -0.30%
FTSE 250 (MCX) 21,160.54 0.03%
techMARK (TASX) 3,529.87 0.20%

FTSE 100 - Risers

Barratt Developments (BDEV) 586.00p 2.23%
Reckitt Benckiser Group (RB.) 5,880.00p 2.00%
Smurfit Kappa Group (SKG) 2,954.00p 1.58%
Associated British Foods (ABF) 2,740.00p 1.26%
Compass Group (CPG) 1,579.00p 1.09%
Diageo (DGE) 2,724.00p 1.02%
BT Group (BT.A) 204.95p 0.99%
Johnson Matthey (JMAT) 3,788.00p 0.88%
Halma (HLMA) 1,418.00p 0.78%
Next (NXT) 6,054.00p 0.73%

FTSE 100 - Fallers

Fresnillo (FRES) 1,216.00p -6.39%
Standard Life Aberdeen (SLA) 351.00p -3.57%
Antofagasta (ANTO) 1,100.00p -3.22%
Evraz (EVR) 499.40p -2.73%
Glencore (GLEN) 383.85p -2.59%
Standard Chartered (STAN) 726.60p -2.33%
Kingfisher (KGF) 301.50p -2.05%
Royal Mail (RMG) 482.30p -1.99%
Old Mutual (OML) 222.40p -1.98%
Anglo American (AAL) 1,849.40p -1.73%

FTSE 250 - Risers

Inmarsat (ISAT) 473.90p 13.48%
Auto Trader Group (AUTO) 417.00p 8.31%
Victrex plc (VCT) 3,046.00p 5.03%
Ocado Group (OCDO) 999.40p 4.58%
Capita (CPI) 156.40p 4.23%
BCA Marketplace (BCA) 211.00p 4.20%
Provident Financial (PFG) 652.80p 3.26%
Herald Investment Trust (HRI) 1,360.00p 2.63%
Riverstone Energy Limited (RSE) 1,292.00p 2.53%
Sophos Group (SOPH) 595.00p 2.50%

FTSE 250 - Fallers

Hochschild Mining (HOC) 200.60p -8.18%
Games Workshop Group (GAW) 2,850.00p -6.39%
Kaz Minerals (KAZ) 1,012.50p -5.90%
Purecircle Limited (DI) (PURE) 385.00p -3.27%
Centamin (DI) (CEY) 122.55p -3.16%
Investec (INVP) 552.20p -3.05%
Tullow Oil (TLW) 245.40p -3.04%
Cairn Energy (CNE) 233.60p -2.75%
Aggreko (AGK) 684.80p -2.59%
Clarkson (CKN) 2,505.00p -2.53%