London midday: Stocks fall further as pound holds above $1.30; consumer lending in focus

London stocks had fallen a little further into the red by midday on Thursday as the pound held firm above $1.30 and after data revealed that UK consumer lending growth slowed to its weakest since November 2015 last month.

The FTSE 100 was down 0.8% to 7,505.95, while the pound was flat against the dollar and the euro at 1.3025 and 1.1127, respectively, having shot higher on Wednesday after the EU’s chief Brexit negotiator, Michel Barnier, said he was prepared to offer an unprecedented partnership to the UK.

IG market analyst Joshua Mahony said: "This week’s trade-centred optimism seems to be flagging, with the recent ascent in European and US stock markets halting. This suggests a shift away from the focus on the Mexico trade deal, and towards the likeliness of a US deal with Canada ahead of tomorrow’s deadline.

"The UK focus has become almost entirely consumed by affairs closer to home, with optimism at an improved EU-UK negotiation stance helping push the pound higher and FTSE lower. While markets continue to focus on yesterday’s announcement that the EU is willing to offer an 'unprecedented deal' to the UK, the cynics amongst us will instead focus on this morning’s warning to prepare for a no-deal. Ultimately the red lines in the EU remain in place, and traders should be wary that there is unlikely to be a perfect deal which will satisfy both the EU member states and UK parliament."

Data released earlier showed consumer credit growth slowed to an annual rate of 8.5% last month from 8.8% in June, marking the slowest growth since November 2015.

On a month-on-month basis, net consumer lending dropped to £817m from £1.52bn in June, missing expectations.

Mortgage approvals for house purchases came in at 64,768 from 65,374, which was a touch below expectations of 65,000.

In corporate news, Hays was in the red despite reporting a 17% jump in full-year profit as the recruiter boosted its dividend after a "landmark" year that saw solid growth in its international businesses.

Vodafone fell after agreeing to merge its loss-making Australian mobile joint venture with broadband provider TPG Telecom in a deal valuing the combined company at about A$15bn (£8.4bn).

AstraZeneca slipped even as it said that the European Commission has approved a new formulation of its type-2 diabetes treatment.

Severn Trent nudged lower as it announced the acquisition of Agrivert Holdings, which specialises in sustainable and cost-effective food waste recycling, for £120m.

WH Smith rose after saying it expects results for the year to the end of August to be in line with expectations thanks to a strong performance from its travel business.

SSE nudged higher as the Competition and Markets Authority provisionally cleared the proposed merger between its retail arm and Npower.

Oilfield services provider Hunting surged after saying it swung to a profit in the six months to the end of June and reinstating its dividend.

In broker note action, IWG was cut to ‘underperform’ at RBC Capital Markets, while Intu was downgraded to ‘underweight’ at Morgan Stanley. Vodafone was reduced to ‘neutral’ at Bank of America Merrill Lynch and Glaxo was downgraded to ‘hold’ at Liberum.

Unite Group was lifted to ‘overweight’ by Morgan Stanley, while Petrofac was upgraded to ‘equalweight’ at Morgan Stanley. Bellway was lifted to ‘buy’ by Deutsche Bank and Big Yellow was raised to ‘neutral’ at Kempen & Co.

Meanwhile, ex-dividend stocks took 0.5 points off the FTSE 100 and 17 off the FTSE 250, with John Wood Group, LondonMetric, Ascential, Auto Trader, Capital & Counties, Centamin, Elementis, Greencore, Hammerson, Hochschild, InterContinental Hotels, Polypipe, Ultra Electronics, National Express and St James’s Place all in the frame.

Market Movers

FTSE 100 (UKX) 7,505.95 -0.76%
FTSE 250 (MCX) 20,671.60 -0.31%
techMARK (TASX) 3,528.68 -0.90%

FTSE 100 - Risers

Ocado Group (OCDO) 1,074.50p 1.13%
Taylor Wimpey (TW.) 170.03p 0.82%
Admiral Group (ADM) 2,095.00p 0.77%
Barratt Developments (BDEV) 545.00p 0.66%
United Utilities Group (UU.) 732.80p 0.47%
GVC Holdings (GVC) 1,104.50p 0.41%
Persimmon (PSN) 2,476.00p 0.28%
Berkeley Group Holdings (The) (BKG) 3,684.00p 0.27%
Direct Line Insurance Group (DLG) 332.90p 0.27%
London Stock Exchange Group (LSE) 4,646.00p 0.26%

FTSE 100 - Fallers

BT Group (BT.A) 217.00p -2.49%
Vodafone Group (VOD) 168.64p -2.49%
Fresnillo (FRES) 911.90p -2.43%
Tesco (TSCO) 244.90p -2.00%
Land Securities Group (LAND) 920.75p -2.00%
Informa (INF) 765.80p -1.95%
Melrose Industries (MRO) 227.90p -1.85%
WPP (WPP) 1,273.00p -1.85%
Rentokil Initial (RTO) 329.90p -1.82%
Royal Mail (RMG) 456.00p -1.79%

FTSE 250 - Risers

Hunting (HTG) 854.00p 12.59%
Go-Ahead Group (GOG) 1,697.09p 4.82%
FirstGroup (FGP) 89.70p 2.93%
Energean Oil & Gas (ENOG) 533.00p 2.50%
TI Fluid Systems (TIFS) 283.07p 2.49%
Greene King (GNK) 482.60p 2.07%
OneSavings Bank (OSB) 425.40p 2.06%
Bellway (BWY) 2,948.00p 2.01%
Clarkson (CKN) 2,815.00p 1.99%
WH Smith (SMWH) 2,092.00p 1.95%

FTSE 250 - Fallers

Hays (HAS) 193.70p -4.49%
Hammerson (HMSO) 473.10p -3.92%
Centamin (DI) (CEY) 101.85p -3.60%
RPC Group (RPC) 717.00p -3.16%
Bakkavor Group (BAKK) 182.20p -3.09%
Ferrexpo (FXPO) 158.30p -2.94%
Computacenter (CCC) 1,414.00p -2.62%
Sanne Group (SNN) 629.00p -2.48%
Capital & Counties Properties (CAPC) 257.80p -2.35%
Intu Properties (INTU) 158.05p -2.29%