London midday: Miners drive small gain; Convatec tanks on warning
London stocks were holding on to small gains by midday on Monday as miners rallied on the back of Chinese inflation data, but Convatec slid after a profit warning.
The FTSE 100 was up 0.1% to 7,539.12, while the pound was up 0.3% against the euro at 1.1269 and 0.1% firmer versus the dollar at 1.3303.
Meanwhile, oil prices gushed higher as conflict broke out between Iraqi and Kurdish forces south of oil-rich Kirkuk. West Texas Intermediate was up 1.2% to $52.10 a barrel and Brent crude was 1.3% higher at $57.93.
IG analyst Joshua Mahony said: “The FX market is showing a significant divergence between the pound and euro, with traders selling the single currency amid ongoing fears surrounding events in Spain.
“Meanwhile, conflict in the Middle East has seen oil prices spike higher, as Iraqi forces take over the North Oil Company, and the Babagurgur oil fields from the Kurdish Peshmerga."
The gains seen in the energy sector contributed to a strong morning for the commodities sector, while a strong rise in copper on the back of China data was lifting the likes of Antofagasta, Rio Tinto, and BHP Billiton to the top of the leaderboard.
Prime Minister Theresa May is expected in Brussels on Monday for what appears to be a potential Brexit intervention. Her dinner date with European Commission president Jean-Claude Juncker and the EU's chief Brexit negotiator Michel Barnier will be closely watched after the latter said last week that Brexit negotiations had reached “deadlock”.
The rest of the week’s economic calendar is already busy, with UK inflation, wage growth and retail sales readings, as well as the latest GDP data from China and the potentially crucial EU summit on Thursday and Friday.
Spanish politics were also in focus after Catalan president Carles Puigdemont rebuffed Madrid's calls to clarify whether he had declared independence for the region last week, calling instead for two months of dialogue.
Puigdemont also made two petitions, one of them being that the central government not bring charges against the two nationalist leaders and the head of the regional police force who were due to testify in a court in Madrid on Monday morning. He also called for a meeting with Madrid to explore possible solutions.
In response, Madrid said it would activate the second and last deadline set for Thursday at 1000 BST, which would trigger Article 155 of its Constitution.
On the UK corporate front, heavily-weighted mining stocks racked up the strongest gains as copper prices hit a fresh three-year high after China’s consumer price index jumped 1.6% in September from the year before, in line with expectations. Meanwhile, the producer price index was up 6.9% last month from a year ago, beating expectations. Credit data over the weekend, showing the supply of credit at 13.5% in the year to August, also provided encouragement.
Catheters and wound care specialist ConvaTec tanked after it warned that revenues and profit margins for the full year will be lower than it had previously guided and that growth targets in 2018 may need to be adjusted.
Ultra Electronics edged lower despite saying that its Cheltenham-based Precision Control Systems business has received contracts valued $16m from Boeing and Lockheed Martin.
Financial technology company NEX Group was in the red after it announced that - having put into motion the “significant restructure” of the company’s post trade division 'NEX Optimisation' - Jenny Knott has decided to step down as the division's CEO.
Polymetal, the Russian gold miner, advanced after saying it was on track for the full year as it posted a jump in third-quarter sales.
ITV was boosted by an upgrade to ‘buy’ at HSBC, while AstraZeneca was in the black after Credit Suisse upgraded the stock to ‘outperform’ and Sky nudged up as AlphaValue lifted it to ‘add’.
GKN was hit by a downgrade to ‘hold’ at Societe Generale.
There are no major UK macroeconomic releases due on Monday apart from Rightmove house prices data showing asking prices in England and Wales rose 1.1% in October, following a 1.2% drop the previous month.
Market Movers
FTSE 100 (UKX) 7,539.12 0.05%
FTSE 250 (MCX) 20,234.24 -0.12%
techMARK (TASX) 3,553.61 0.05%
FTSE 100 - Risers
Antofagasta (ANTO) 1,048.00p 3.25%
Shire Plc (SHP) 3,947.00p 2.57%
Rio Tinto (RIO) 3,769.00p 2.18%
BHP Billiton (BLT) 1,428.50p 2.18%
Glencore (GLEN) 383.55p 1.85%
Anglo American (AAL) 1,495.00p 1.74%
Standard Life Aberdeen (SLA) 441.60p 1.01%
ITV (ITV) 174.30p 0.98%
Sainsbury (J) (SBRY) 244.00p 0.95%
Tesco (TSCO) 187.35p 0.73%
FTSE 100 - Fallers
Convatec Group (CTEC) 221.00p -20.87%
GKN (GKN) 312.80p -1.64%
Reckitt Benckiser Group (RB.) 7,080.00p -1.49%
Intertek Group (ITRK) 5,130.00p -1.44%
Smurfit Kappa Group (SKG) 2,152.00p -1.28%
Kingfisher (KGF) 305.40p -1.26%
Severn Trent (SVT) 2,080.00p -1.14%
Centrica (CNA) 172.70p -1.09%
3i Group (III) 956.50p -1.09%
Barratt Developments (BDEV) 674.50p -0.95%
FTSE 250 - Risers
Provident Financial (PFG) 948.50p 6.93%
Sirius Minerals (SXX) 27.49p 5.73%
CLS Holdings (CLI) 218.50p 3.51%
Paragon Banking Group (PAG) 465.10p 2.88%
Vedanta Resources (VED) 920.00p 2.45%
Kaz Minerals (KAZ) 869.00p 2.36%
Virgin Money Holdings (UK) (VM.) 291.90p 2.35%
Euromoney Institutional Investor (ERM) 1,150.00p 2.31%
Man Group (EMG) 190.20p 2.20%
St. Modwen Properties (SMP) 389.50p 2.10%
FTSE 250 - Fallers
Brown (N.) Group (BWNG) 334.10p -3.75%
Howden Joinery Group (HWDN) 412.90p -3.03%
Capita (CPI) 562.00p -1.66%
Riverstone Energy Limited (RSE) 1,244.00p -1.66%
Pagegroup (PAGE) 467.70p -1.58%
Inmarsat (ISAT) 625.00p -1.57%
Dixons Carphone (DC.) 184.30p -1.55%
Domino's Pizza Group (DOM) 333.80p -1.53%
Cobham (COB) 142.30p -1.52%
SIG (SHI) 176.30p -1.45%