London midday: Investors pick up unloved UK stocks despite Brexit uncertainty

London stocks are continuing to push higher, with Ocado leading the gains after a well-received trading statement and on the back of figures showing a drop in the rate of unemployment to its lowest level since 1975.

Shares were also near their best levels of the session despite the headwind from pound strength following reports that the European Union was set to give Parliament time for another vote on the government's plans for withdrawing from the bloc, while leaving the door open to an extension of Article 50 as needed to smooth the UK's exit from the bloc.

At 1200 GMT, the FTSE 100 was up 0.52% at 7,336.97 and at its best level in five months, while the pound was 0.17% firmer against the US dollar at 1.3279 and 0.03% higher versus the euro to 1.1695.

Nevertheless, there continued to be a degree of uncertainty around what price Theresa may might have to pay in order to get sufficient backing for her deal.

Earlier, in an interview with website Conservativehome, leading Brexiteers, Esther Mcvey and Philip Davies, said they would vote for May's Withdrawal Agreement if she agreed to step aside afterwards.

Helping to prop up sentiment in sterling assets, the Office for National Statistics reported that firms had in fact ramped up hiring over the latest three-month stretch, defying survey results which appeared to hint at an imminent slowdown.

According to ONS, employment growth over the three months to January accelerated to a clip of 222,000 after rising by 167,000 in the last quarter of 2018.

Poignantly, wage growth clocked in at a quarterly annualised pace of 3.9%, which was unchanged versus the clip observed during the fourth quarter.

Nevertheless, the data also fed into expectations for a hike in Bank Rate come summer, according to economists at Morgan Stanley and Capital Economics - assuming there was no 'hard Brexit'.

"This will add to concerns that the Brexit-related fall in investment is having a detrimental effect on the economy, as firms have opted to hire workers to meet demand rather than invest," said Andrew Wishart at Capital Economics.

"But it is also a mix that could push up inflation. As a result, if there is a long delay to Brexit or a deal is struck, we suspect the MPC will raise interest rates this summer."

In a further boost to sentiment, overnight the US Secretary of Agriculture, Sonny Perdue, told Bloomberg TV that China might triple its purchases of US farm goods as part of any trade agreement.

As an aside, and despite recent gains for share prices, according to Bank of America-Merrill Lynch's monthly survey of global fund managers, being 'short' UK and European stocks continued to be the "most crowded" trade.

Ocado presses ahead

In corporate news, shares of Ocado were on the front and trading just off a fresh 52-week high after the online grocer said its sales were barely dented by the huge fire at its Andover robot-operated depot during the quarter. The online grocery specialist reported 11.2% growth in the first 13 weeks of its new financial year to 3 March and said the fire "has been a setback, but will be only a temporary one".

Hikma Pharmaceuticals was towards the top of the leaderboard thanks to the boost from an upgrade to ‘buy’ at Citi, while Informa was lifted after an upgrade to ‘overweight’ at Morgan Stanley.

Mining giant Antofagasta rallied as it declared a bumper dividend and posted a drop in annual core earnings that was in line with analysts’ expectations.

IT infrastructure and services provider Softcat surged as it reported a 41% jump in first-half profit and revenue as customer numbers grew and the company said full-year results will be "marginally" ahead of previous expectations.

Standard Life Aberdeen rose after saying that a tribunal has ruled in its favour in respect of investment mandate dispute with Lloyds Banking Group, while TP ICAP jumped even as it posted a 14% drop in 2018 pre-tax profit.

Energy services provider Wood Group fell sharply as it said it swung to a profit in 2018 but that its deleveraging programme this year would be "more gradual than originally anticipated".

Polypipe slid as its full-year revenue came in in line with expectations, but underlying EBITA and earnings per share were a miss.

Ferrexpo was also sharply lower after saying that a review of its donation to charity Blooming Land identified additional discrepancies, forcing it to delay its 2018 results.

Outside the FTSE 350, womenswear retailer Bonmarche saw its shares tumble 24% after warning of a worse-than-expected full-year loss - its third profit warning in six months - as trading since the beginning of March has been "significantly" weaker.

In other broker note action, Marshalls was cut to ‘hold’ at Berenberg.

Market Movers

FTSE 100 (UKX) 7,336.97 0.52%
FTSE 250 (MCX) 19,539.81 0.27%
techMARK (TASX) 3,574.13 0.65%

FTSE 100 - Risers

Ocado Group (OCDO) 1,191.60p 3.79%
Antofagasta (ANTO) 971.40p 3.38%
DCC (DCC) 6,535.00p 2.67%
Sainsbury (J) (SBRY) 241.05p 2.62%
Informa (INF) 739.00p 2.47%
Standard Life Aberdeen (SLA) 271.85p 2.09%
Smurfit Kappa Group (SKG) 2,262.00p 2.08%
Melrose Industries (MRO) 191.85p 1.78%
Glencore (GLEN) 315.95p 1.66%
Burberry Group (BRBY) 1,894.50p 1.61%

FTSE 100 - Fallers

Evraz (EVR) 596.20p -5.37%
Standard Chartered (STAN) 613.30p -0.73%
Relx plc (REL) 1,663.00p -0.54%
HSBC Holdings (HSBA) 623.80p -0.53%
Intertek Group (ITRK) 4,797.00p -0.52%
Direct Line Insurance Group (DLG) 363.15p -0.37%
Experian (EXPN) 2,045.00p -0.29%
Fresnillo (FRES) 805.20p -0.27%
Prudential (PRU) 1,630.50p -0.24%
RSA Insurance Group (RSA) 526.00p -0.19%

FTSE 250 - Risers

TP ICAP (TCAP) 324.30p 6.75%
Premier Oil (PMO) 89.33p 4.44%
Vivo Energy (VVO) 126.16p 3.04%
Hunting (HTG) 586.00p 2.81%
Indivior (INDV) 113.80p 2.75%
Wetherspoon (J.D.) (JDW) 1,351.00p 2.74%
Acacia Mining (ACA) 199.45p 2.72%
Softcat (SCT) 852.00p 2.52%
Kier Group (KIE) 494.40p 2.15%
Renishaw (RSW) 4,225.21p 1.86%

FTSE 250 - Fallers

Polypipe Group (PLP) 392.29p -9.32%
Ferrexpo (FXPO) 247.40p -8.44%
Wood Group (John) (WG.) 548.60p -8.35%
Restaurant Group (RTN) 131.70p -3.77%
Fisher (James) & Sons (FSJ) 2,185.00p -3.54%
Energean Oil & Gas (ENOG) 779.80p -2.50%
Greencore Group (GNC) 197.35p -2.11%
Just Group (JUST) 80.40p -1.95%
Metro Bank (MTRO) 852.00p -1.78%
Marshalls (MSLH) 590.50p -1.30%