London midday: Stocks turn lower as May triggers Article 50

London stocks had frittered away their early gains by midday, while the pound was off lows as Britain officially kicked off divorce proceedings with the European Union.

The FTSE 100 was down 0.2% to 7,328.84. Meanwhile, the pound - which is likely to remain volatile throughout Wednesday's session - was weaker but off lows, down 0.2% at $1.2423, having fallen below $1.24 in Asian trading. Sterling was off 0.1% versus the euro at 1.1510.

On Tuesday, May signed a letter formally notifying the European Council of Britain’s intention to leave the bloc. EU ambassador Sir Tim Barrow will at around 1220 BST personally deliver the letter to European Council President Donald Tusk, which will formally kick off the two-year negotiating process. The Prime Minister will at around the same time give a speech to parliament.

The market's fluctuations were just "very low level jitters", said Spreadex analyst Connor Campbell, adding that they may disappear once confirmation that the withdrawal clause has officially been enacted.

"Though it likely has nothing to do with Brexit – the European Commission have blamed LSE’s refusal to offload its Italian bond trading arm MTS – it is a nice bit of symbolism that on the day that Article 50 is activated the merger between Deutchse Boerse and the LSE is nixed."

London Stock Exchange rallied after the European Commission blocked its proposed merger with its German peer, saying it would have significantly reduced competition. The decision came as the companies failed to offer up adequate remedies to address all of the Commission's competition concerns.

Holiday tour operator TUI slipped back after it said winter 2016/17 and summer 2017 were trading in line with expectations and reiterated its guidance of at least 10% growth in group underlying EBITA in 2016/17.

Passenger transport operator Stagecoach advanced despite reporting a drop in third-quarter revenues.

BHP Billiton was on the front foot after its iron ore chief Edgar Basto warned that the supply of low-cost seaborne iron ore is expected to grow faster than demand, but assured that company is well-positioned to continue to grow value and shareholder returns.

3i was stronger after an upgrade to 'overweight' from 'equalweight' by Morgan Stanley, but Acacia Mining was under the cosh after JP Morgan Cazenove downgraded the stock to 'neutral' from 'overweight', citing Tanzanian obstacles and an ongoing re-rating.

On the macro front, the latest figures from the Bank of England revealed that UK mortgage approvals fell to 68,315 in February from 69,114 in January, versus expectations for an uptick to 69,900.

New mortgage lending, net of repayments, came in at £4.9bn in February compared to £4.8bn the month before.

Howard Archer, chief UK and European economist at IHS Markit, said the slowdown in mortgage approvals "suggests that housing market activity may now be starting to be affected by the increasing squeeze on consumers and their concerns over the outlook".

Meanwhile, consumer credit rose by £1.44bn, down from the month before but above expectations for a £1.3bn increase.

Market Movers

FTSE 100 (UKX) 7,328.84 -0.20%
FTSE 250 (MCX) 18,933.15 -0.11%
techMARK (TASX) 3,467.94 -0.07%

FTSE 100 - Risers

London Stock Exchange Group (LSE) 3,138.00p 3.77%
3i Group (III) 722.50p 3.14%
Intu Properties (INTU) 274.90p 1.14%
Convatec Group (CTEC) 271.90p 1.12%
Scottish Mortgage Inv Trust (SMT) 367.60p 1.10%
BHP Billiton (BLT) 1,238.50p 0.94%
Associated British Foods (ABF) 2,630.00p 0.69%
Hammerson (HMSO) 565.50p 0.62%
British Land Company (BLND) 602.00p 0.50%
Land Securities Group (LAND) 1,041.00p 0.39%

FTSE 100 - Fallers

Fresnillo (FRES) 1,531.00p -1.98%
Randgold Resources Ltd. (RRS) 7,045.00p -1.74%
Barratt Developments (BDEV) 537.50p -1.56%
Severn Trent (SVT) 2,371.00p -1.29%
Experian (EXPN) 1,604.00p -1.23%
Smurfit Kappa Group (SKG) 2,107.00p -1.17%
Standard Chartered (STAN) 744.30p -1.08%
Taylor Wimpey (TW.) 191.00p -1.04%
Standard Life (SL.) 356.50p -1.03%
Legal & General Group (LGEN) 245.10p -0.97%

FTSE 250 - Risers

Stagecoach Group (SGC) 209.80p 5.27%
Nostrum Oil & Gas (NOG) 449.80p 4.14%
Evraz (EVR) 224.10p 2.80%
Tullow Oil (TLW) 219.80p 2.76%
Synthomer (SYNT) 473.10p 2.27%
Ashmore Group (ASHM) 347.70p 2.23%
Worldwide Healthcare Trust (WWH) 2,332.00p 1.83%
Polar Capital Technology Trust (PCT) 939.00p 1.73%
Card Factory (CARD) 273.00p 1.68%
Euromoney Institutional Investor (ERM) 1,059.00p 1.63%

FTSE 250 - Fallers

JRP Group (JRP) 133.00p -4.25%
Polymetal International (POLY) 996.00p -4.23%
Acacia Mining (ACA) 438.50p -3.90%
AA (AA.) 260.90p -3.55%
Berendsen (BRSN) 739.50p -2.83%
IP Group (IPO) 153.00p -2.49%
CLS Holdings (CLI) 1,702.21p -2.45%
Centamin (DI) (CEY) 171.90p -2.16%
Saga (SAGA) 205.80p -2.00%
Bellway (BWY) 2,709.00p -1.99%