London midday: Stocks climb as pound eases on Downing St denial of customs report

London stocks had edged up by midday on Thursday as bookies recovered some of their losses, while the pound eased a little after Prime Minister Theresa May denied a report that the UK could stay in the customs union.

The FTSE 100 was up 0.2% to 7,750.21, ticking higher as the pound relinquished some of its earlier gains, trading flat versus the dollar at 1.3485 and 0.2% firmer against the euro at 1.1441 as May dismissed a Telegraph report suggesting that the UK was planning on telling Brussels that it was prepared to stay in the European customs union beyond 2021.

Asked at an EU summit in Bulgaria whether the report was true, May said: "No. The United Kingdom will be leaving the customs union as we're leaving the European Union. Of course, we will be negotiating future customs arrangements with the European Union and I've set three objectives…in those."

Britain should have it owns trade policy with the rest of the world, frictionless trade with the EU and no hard border with Ireland, the PM said.

Elsewhere, oil prices were in focus as Brent crude hit $80 a barrel for the first time since 2014 after France's Total threatened to withdraw from its large Iran gas field deal following the US decision to exit the Iran nuclear deal.

On the corporate front, gambling stocks were already recovering from the losses suffered earlier as the government confirmed that the maximum stake on fixed-odds betting terminals (FOBTs) will be further reduced from £50 to £2. Paddy Power, William Hill and GVC Holdings all reversed course to trade higher, with just 888 Holdings still in the red.

George Salmon, equity analyst at Hargreaves Lansdown, said: "The change will impact profits at the big high street bookmakers, but the US Supreme Court’s decision to open up the sports betting market over the pond means shares in the sector are still likely to end the week higher.

"The potential in the US is enormous. Around $150bn is already wagered on the underground market every year, and this will surely rise as barriers to betting are removed. For the UK bookies, the chance to tap into this huge potential could mean lost machine revenues are more than replaced. What’s likely to follow is something of a land grab. First out of the blocks is Paddy Power Betfair, which is already in discussions about a new US partnership."

Credit checker Experian gained as it said full-year profits fell but revenue growth accelerated towards the end of the year, while National Grid followed close behind after reporting a 4% rise in full-underlying pre-tax profit.

Luxury fashion brand Burberry was on the rise a day after its results, as analysts including UBS and Credit Suisse bumped up their price targets and estimates for the stock.

Retirement services company Just Group rallied as it reported a jump in first-quarter sales, thanks to a strong performance in defined benefit de-risking, while cybersecurity firm Sophos was in the black as it said full-year billings rose 22% thanks to growth in its integrated cloud-based management platform.

British Land was also higher after posting a drop in full-year underlying profit but a jump in its net asset value and Countryside Properties pushed up as it posted a jump in half-year completions, revenue and profit and expressed confidence in the medium term.

Ocado Group rocketed as it won a contract with US grocery giant Kroger to exclusively provide its online grocery expertise across multiple distribution warehouses across America, while Just Group racked up healthy gains after hailing a strong start to the year.

Royal Mail was on the back foot despite new chief executive Moya Greene delivering better-than-expected final results, as the company warned that general data protection regulation laws may lead to a steeper decline in letter deliveries this year.

Hill & Smith was under pressure after saying that the stronger pound against the dollar meant that revenue at the start of the year fell versus the same period in 2017.

Travel operator Thomas Cook retreated after posting a narrowing of first-half losses but saying that the UK remains a drag.

In broker note action, Restaurant Group was cut to 'sell' at Peel Hunt, while Vodafone was downgraded to 'neutral' at Citi, and Mondi was cut to 'neutral' at Goldman. National Express was knocked down to 'neutral' at JPMorgan and Softcat was hit by a downgrade to 'hold' from 'buy' at Jefferies.

Premier Oil was upgraded to 'overweight' at Barclays, while Gem Diamonds was lifted to 'buy' at Canaccord.

As is usual on a Thursday, ex-dividend stocks were in play, taking 6.8 points off the FTSE 100 and 13.5 points off the 250. HSBC Holdings, Intertek, Saga, Ascential, Clarkson, Dignity and Tesco were among the companies whose stock went ex-div.

Market Movers

FTSE 100 (UKX) 7,750.21 0.21%
FTSE 250 (MCX) 20,988.37 0.77%
techMARK (TASX) 3,511.77 0.23%

FTSE 100 - Risers

Experian (EXPN) 1,790.00p 4.74%
Burberry Group (BRBY) 1,933.50p 3.51%
British Land Company (BLND) 700.20p 2.73%
Next (NXT) 5,748.00p 2.10%
Marks & Spencer Group (MKS) 294.00p 2.01%
United Utilities Group (UU.) 778.40p 1.88%
Paddy Power Betfair (PPB) 8,400.00p 1.82%
National Grid (NG.) 846.70p 1.71%
Severn Trent (SVT) 2,005.00p 1.52%
WPP (WPP) 1,307.00p 1.40%

FTSE 100 - Fallers

Royal Mail (RMG) 564.00p -5.65%
HSBC Holdings (HSBA) 726.10p -1.72%
Vodafone Group (VOD) 193.38p -1.22%
Rio Tinto (RIO) 4,304.00p -1.06%
Rolls-Royce Holdings (RR.) 831.88p -0.97%
Intertek Group (ITRK) 5,094.00p -0.86%
Mediclinic International (MDC) 675.20p -0.85%
Standard Chartered (STAN) 755.50p -0.77%
Mondi (MNDI) 2,050.00p -0.63%
Anglo American (AAL) 1,881.60p -0.57%

FTSE 250 - Risers

Ocado Group (OCDO) 873.80p 58.30%
Just Group (JUST) 153.40p 9.26%
Tullow Oil (TLW) 267.34p 5.05%
Cairn Energy (CNE) 263.58p 4.84%
Sophos Group (SOPH) 576.35p 4.79%
Mitchells & Butlers (MAB) 266.79p 4.46%
Capita (CPI) 131.70p 3.50%
Provident Financial (PFG) 662.80p 3.27%
Superdry (SDRY) 1,235.00p 3.17%
RPC Group (RPC) 802.40p 2.95%

FTSE 250 - Fallers

Hill & Smith Holdings (HILS) 1,350.00p -8.16%
Softcat (SCT) 667.00p -4.58%
Petrofac Ltd. (PFC) 619.60p -4.53%
Saga (SAGA) 128.37p -4.34%
SSP Group (SSPG) 622.43p -3.80%
On The Beach Group (OTB) 504.00p -3.45%
Pagegroup (PAGE) 531.50p -3.19%
Investec (INVP) 553.00p -2.78%
Thomas Cook Group (TCG) 142.20p -2.67%
Contour Global (GLO) 246.00p -2.38%