London midday: Stocks boosted by BP, strong housebuilders

London stocks had pushed a little higher by midday on Tuesday, helped along by solid earnings from BP and a strong showing in the housebuilding sector.

The FTSE 100 was up 0.3% to 7,043.69, while the pound dropped below $1.28 to a 10-week low, trading down 0.4% against the dollar at 1.2739 and 0.2% lower versus the euro at 1.1226 as investors continued to digest Monday's Budget.

Fiona Cincotta, senior market analyst at City Index, said: "The pound remained unimpressed by yesterday’s budget in which the Chancellor Philip Hammond declared the end of austerity and promised tax cuts. There is a deep sense that a no-deal and hard Brexit solution would make most of the Chancellor’s plans null and void, instead the bigger impact on the currency and bonds will come from the Bank of England’s rate setting meeting next week."

Meanwhile, trade relations between the US and China were back in focus again after US President Trump said he expects a "great deal" with China, but threatened tariffs on a further $257bn worth of goods if a deal isn't agreed.

On the UK data front, a survey of the retail sector from the Confederation of British Industry revealed a sharp softening in the sales balance to +5 this month from +23 in September and below consensus expectations for a level of +20.

"The CBI’s survey provides more evidence that consumers have slowed down again after the summer splurge," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

"On past form, the reported sales balance points to a slowdown in year-over-year growth in retail sales volumes to about 2.0% in October, from 3.2% in September. As ever, the balance should be taken with a large pinch of salt. It is derived from responses from just 45 retailers and covers only the first half of the reference month.

"The survey often is too downbeat if the official measure of sales fell in the prior month, as it did in September. Nonetheless, the fundamentals - subdued consumer confidence, slowing employment growth and meagre real wage increases - had suggested a pullback in spending was on the cards, after an extended run of strength in Q2 and most of Q3."

In terms of sectors, housebuilders were the best of the bunch, with Taylor Wimpey, Persimmon, Barratt Developments, Berkeley Group and Crest Nicholson all higher after Philip Hammond announced in Monday's Budget that the Help to Buy scheme, which had been due to end in March 2021, will be extended to March 2023, under more restrictive terms.

Help to Buy will be restricted between 2021 and 2023 to first-time buyers only and to houses with lower selling prices than before.

Canaccord Genuity said: "This extension to Help to Buy should be welcome news as it removes the uncertainty and looks supportive; particularly given the ongoing macro uncertainty around Brexit.

"The extension provides more visibility out to 2023, avoids a cliff edge removal and the non-first time buyer use of HtoB should be able to be comfortably managed by industry and the mortgage market."

BP was the standout gainer as the oil giant enjoyed its best quarterly result in more than five years as profits gushed much higher than expected thanks to strong oil prices.

Online grocery specialist Ocado rallied after saying it expects to receive the first three orders for high-tech warehouses from US supermarket giant Kroger before the end of the year after the pair signed a formal services and operational agreement.

Elsewhere in retail, WH Smith racked up strong gains after announcing the acquisition of US airport retailer InMotion for $198m (£155m), doubling its international travel business and improving earnings per share in the first year after completion.

Drug developer AstraZeneca rose as it agreed to sell certain rights to two drugs for $815m, while Polymetal nudged up after agreeing to sell its Kapan mine in Armenia to Chaarat Gold Holdings for £$55m.

Online trading platform IG Group was sharply higher as it appointed former Verifone executive June Felix as its new chief executive officer with immediate effect.

On the downside, Reckitt Benckiser was the worst performer on the FTSE 100 after the consumer goods giant posted a 2% rise in third-quarter like-for-like sales, missing consensus expectations for a 4% increase as its European infant formula and child nutrition plant was hit by a manufacturing disruption.

Hunting was also in the red after the energy services group said North American third-quarter revenues were steady as shale oil production continued, but warned that geopolitical tensions were hitting US offshore and international markets.

In broker note action, Antofagasta was lifted to 'neutral' from 'sell' by UBS, while Drax was hit by a downgrade to 'hold' from 'buy' at Jefferies.

Electrocomponents was lifted to 'neutral' at Credit Suisse, while Travis Perkins was raised to 'equalweight' by Barclays.

Market Movers

FTSE 100 (UKX) 7,043.69 0.25%
FTSE 250 (MCX) 18,610.61 0.24%
techMARK (TASX) 3,258.61 -0.11%

FTSE 100 - Risers

BP (BP.) 553.40p 3.40%
Ocado Group (OCDO) 826.20p 3.17%
Antofagasta (ANTO) 773.20p 2.22%
Taylor Wimpey (TW.) 158.80p 2.19%
Persimmon (PSN) 2,273.00p 2.11%
Barratt Developments (BDEV) 508.60p 1.94%
Sage Group (SGE) 537.00p 1.70%
Evraz (EVR) 534.20p 1.67%
Marks & Spencer Group (MKS) 299.70p 1.52%
Berkeley Group Holdings (The) (BKG) 3,430.00p 1.45%

FTSE 100 - Fallers

Reckitt Benckiser Group (RB.) 6,301.00p -4.69%
BAE Systems (BA.) 507.20p -2.91%
Smurfit Kappa Group (SKG) 2,494.00p -2.50%
Randgold Resources Ltd. (RRS) 6,178.00p -1.94%
Rolls-Royce Holdings (RR.) 815.60p -1.90%
Just Eat (JE.) 583.40p -1.85%
Croda International (CRDA) 4,626.00p -1.53%
International Consolidated Airlines Group SA (CDI) (IAG) 585.40p -1.38%
Ferguson (FERG) 5,099.00p -1.37%
Barclays (BARC) 170.72p -1.32%

FTSE 250 - Risers

WH Smith (SMWH) 1,846.00p 6.46%
Kaz Minerals (KAZ) 509.40p 6.10%
IG Group Holdings (IGG) 608.50p 4.73%
Kier Group (KIE) 891.00p 4.21%
Crest Nicholson Holdings (CRST) 343.12p 4.17%
IWG (IWG) 243.10p 3.84%
TP ICAP (TCAP) 286.60p 3.39%
Travis Perkins (TPK) 1,062.50p 2.91%
Entertainment One Limited (ETO) 401.20p 2.87%
Ferrexpo (FXPO) 222.30p 2.82%

FTSE 250 - Fallers

Hunting (HTG) 674.54p -3.29%
Inchcape (INCH) 509.00p -3.23%
Drax Group (DRX) 397.80p -2.83%
Playtech (PTEC) 467.30p -2.58%
IP Group (IPO) 104.93p -2.30%
Meggitt (MGGT) 508.00p -2.23%
Wizz Air Holdings (WIZZ) 2,601.00p -2.14%
Softcat (SCT) 685.76p -2.03%
Spectris (SXS) 2,036.00p -2.02%
Senior (SNR) 264.20p -2.00%