London midday: Stocks drift sideways, AB Foods rallies but Burberry drops

London stocks were little changed by midday on Wednesday, consolidating a day after suffering their worst session since the Brexit vote on Theresa May's surprise plans for a snap general election in June.

The FTSE 100 was down 0.1% to 7,138.89 - slipping into negative territory for the year - while the pound was flat against the dollar and the euro at 1.2838 and 1.1967, respectively.

The FTSE 250 index was significantly outperforming, however, up 1.1% to 19,501.88.

IG analyst Chris Beauchamp said the mid-cap index "leapt out of bed" as investors look to buy up UK-focused assets.

"As the shock fades from the election announcement, there is a real possibility of a rebound in UK stocks, since yesterday’s fall provided the kind of dip that bargain hunters have been praying for over the past few weeks," he said.

The House of Commons is due to vote on May's plan for an early election later on Wednesday, with a two-thirds majority approval needed.

After shooting higher on Tuesday, the pound was moving sideways on Wednesday, holding at just over $1.285 just after noon, and closing in on €1.198.

The prospect of the Conservative party gaining a stronger majority was seen as generally currency positive, since it tends to reduce the prospect of political wrangling, with Michael Hewson at CMC Markets saying there was "no reason we can’t head higher in the coming weeks".

"The market still remains in a negative mind-set for sterling with short positions still elevated. While there is likely to be a few twists and turns over the course of the next few weeks, the US dollar side of the story suggests that we could see further US dollar weakness, pushing the pound back through the 1.3000 level in the longer term."

In corporate news, Associated British Foods rallied after it lifted its dividend and said profits surged in the first half of the year as the sugar business benefited from higher prices and Primark opened 16 new clothes stores across eight countries.

Royal Bank of Scotland was also in the black after Chancellor Philip Hammond said the government was prepared to sell its stake in the bank at a loss.

Tesco edged up as it struck a deal to offload its opticians business to Vision Express for an undisclosed sum.

Luxury fashion brand Burberry was in the red as it posted a drop in total underlying revenue in the second half as an "exceptional" performance in the UK was offset by efforts to improve brand positioning in the US and in the beauty business.

Outsourcing company Bunzl fell despite reporting a rise in first quarter revenue following new business wins and acquisitions.

Pest control and hygiene group Rentokil Initial declined despite posting a jump in first-quarter revenue and saying it expects its performance this year to be in line with expectations.

Property investment and development company Segro nudged up after saying it has had an "excellent start" to 2017 signing £16m of new headline rent.

Aveva ticked higher as the company said its full-year results will show a return to growth in revenue and profit.

Card Factory was boosted by an upgrade to 'buy' by Liberum, but Paysafe fell after a downgrade from Macquarie.

There are no major UK data releases due.

Market Movers

FTSE 100 (UKX) 7,138.89 -0.12%
FTSE 250 (MCX) 19,482.68 0.96%
techMARK (TASX) 3,414.18 0.42%

FTSE 100 - Risers

easyJet (EZJ) 1,103.00p 3.67%
Sainsbury (J) (SBRY) 263.70p 3.57%
Antofagasta (ANTO) 830.00p 2.91%
Glencore (GLEN) 300.10p 2.84%
Lloyds Banking Group (LLOY) 63.55p 2.17%
Next (NXT) 4,272.00p 2.03%
Marks & Spencer Group (MKS) 360.30p 1.92%
Morrison (Wm) Supermarkets (MRW) 232.30p 1.84%
Royal Bank of Scotland Group (RBS) 228.80p 1.82%
International Consolidated Airlines Group SA (CDI) (IAG) 538.00p 1.80%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,609.00p -5.41%
Diageo (DGE) 2,206.00p -1.72%
Randgold Resources Ltd. (RRS) 7,245.00p -1.70%
Imperial Brands (IMB) 3,755.50p -1.65%
Fresnillo (FRES) 1,566.00p -1.63%
Royal Dutch Shell 'B' (RDSB) 2,094.00p -1.46%
Rentokil Initial (RTO) 243.90p -1.41%
Bunzl (BNZL) 2,301.00p -1.29%
GKN (GKN) 339.80p -1.28%
Royal Dutch Shell 'A' (RDSA) 2,023.50p -1.27%

FTSE 250 - Risers

Kaz Minerals (KAZ) 458.40p 4.97%
Cobham (COB) 126.30p 4.94%
Virgin Money Holdings (UK) (VM.) 302.60p 3.95%
Dixons Carphone (DC.) 331.60p 3.72%
Thomas Cook Group (TCG) 89.45p 3.71%
ZPG Plc (ZPG) 382.80p 3.46%
Aldermore Group (ALD) 231.00p 3.36%
Travis Perkins (TPK) 1,598.00p 3.30%
JRP Group (JRP) 125.50p 3.29%
Ferrexpo (FXPO) 141.70p 3.28%

FTSE 250 - Fallers

Templeton Emerging Markets Inv Trust (TEM) 641.50p -1.84%
JPMorgan Indian Investment Trust (JII) 690.00p -1.50%
Redefine International (RDI) 37.78p -1.46%
Acacia Mining (ACA) 458.00p -1.44%
JPMorgan Emerging Markets Inv Trust (JMG) 744.00p -1.20%
Essentra (ESNT) 505.00p -1.08%
Vectura Group (VEC) 150.00p -1.06%
Fisher (James) & Sons (FSJ) 1,689.00p -1.00%
Tullow Oil (TLW) 216.00p -0.92%
Victrex plc (VCT) 1,888.00p -0.89%