London midday: Stocks edge up after 'constructive' US-China talks, PBoC rate cut

London listed shares were holding on to their gains come midday on the back of news of "constructive" contacts between top US and Chinese trade negotiators at the weekend and after China's central bank trimmed its main official short-term policy interest rate.

Marshall Gittler at ACLS Global described the latest headlines around the ongoing trade talks as "vague", while Craig Erlam at Oanda pointed out that while "arguably a positive, we were meant to be at the point of agreeing a date and location for it to be signed off."

"This could well go on beyond the end of the year and even fall apart altogether which could be troublesome for the markets which have already invested so heavily into it," Erlam added.

Despite that, and helped by the fresh record highs reached by Wall Street's main stockmarket gauges during the previous session, on Friday, as of noon, London's top-flight index was up by 0.24% at 7,321.01.

In parallel, the second tier FTSE 250 was adding 0.45% to 20,496.80, despite a rise of 0.27% in the value of sterling against the euro to reach 1.1708 that some market commentary attributed to voter polls which were continuing to point to a consistent advantage for the Tories ahead of the next general election.

According to China's ministry of commerce, at Washington's request, on Saturday Chinese vice premier, Liu He, spoke with US Treasury Secretary, Steve Mnuchin, and America's Trade Representative, Robert Lighthizer.

The commerce ministry said the two sides had "constructive discussions".

It was against that backdrop that overnight the Peoples Bank of China's trimmed its so-called reverse repurchase interest rate by five basis points to 2.55%.

Analysts described the PBoC's latest move as simply "mechanical" given how its interest rate corridor worked and a cut on the rate for its medium-term loan facility earlier in November.

Nevertheless, the interest rate corridor was expected to shift a tad lower before year-end 2019 and the chances of deeper cuts in 2020 was rising, said Freya Bemish at Pantheon Macroeconomics.

Back on home turf, according to property website Rightmove, prices for new properties coming to market in the UK dropped by 1.3% or £3,904 versus October, as the number of new sellers shrank by 14.9% in comparison to a year ago, with the latter marking the largest decline seen since August 2009.

No major economic releases were scheduled in the UK, US or euro area on Monday.

Among some of the broker recommendations that were moving markets, analysts at Jefferies upgraded their view on shares of HSBC from 'hold' to 'buy' while hiking their target price on its stock from 691.0p to 790.0p.

Diploma reported 15% growth in annual profit before tax to £83.5m after revenue climbed by 12% to £544.7m on the back of a good performance from the FTSE 250-listed company's healthcare businesses. The technical products and services specialist said that, though the political and economic outlook remains uncertain, it remained on track for another strong performance in the year ahead due to its resilient business model.

Technology group Sage said it had agreed to sell its Sage Pay business to US Bancorp's payments unit Elavon for £232.0m. It said it expected to report a statutory profit of around £180.0m on completion, which would close in the second quarter of the 2020 fiscal year.

TI Fluid Systems announced on Monday that Ronald Hundzinski would be its new chief financial officer, effective 6 January. The FTSE 250 company said he was joining from Tenneco, where he was currently executive vice-president of finance. During the prior 35 years, he had held a number of leadership positions in finance at Emerson Electric, GKN, Meridian Automotive and BorgWarner, and served as chief financial officer and executive vice-president of BorgWarner from 2012 until 2018.

Semiconductor wafer products and materials solutions provider IQE updated the market on its trading for the year on Monday, reporting that it now expected to deliver revenue of between £136m and £142m, down from its previous guidance range of £140m to £160m, including a forex tailwind of circa £3m, sending its shares diving.

Market Movers

FTSE 100 (UKX) 7,322.34 0.27%
FTSE 250 (MCX) 20,512.16 0.53%
techMARK (TASX) 4,007.71 0.49%

FTSE 100 - Risers

NMC Health (NMC) 2,547.00p 7.56%
Hargreaves Lansdown (HL.) 1,784.50p 2.62%
JD Sports Fashion (JD.) 775.80p 2.48%
Next (NXT) 6,798.00p 2.38%
Hiscox Limited (DI) (HSX) 1,277.00p 2.24%
Severn Trent (SVT) 2,364.00p 2.12%
SSE (SSE) 1,336.00p 2.06%
St James's Place (STJ) 1,083.50p 2.02%
United Utilities Group (UU.) 890.80p 1.92%
Whitbread (WTB) 4,461.00p 1.71%

FTSE 100 - Fallers

Aviva (AV.) 415.20p -4.42%
Croda International (CRDA) 4,652.00p -1.98%
Fresnillo (FRES) 615.00p -1.51%
Evraz (EVR) 358.90p -1.21%
Vodafone Group (VOD) 152.84p -1.14%
3i Group (III) 1,051.00p -1.13%
Burberry Group (BRBY) 2,128.00p -1.12%
Experian (EXPN) 2,415.00p -0.94%
Smith (DS) (SMDS) 384.60p -0.90%
International Consolidated Airlines Group SA (CDI) (IAG) 553.00p -0.79%

FTSE 250 - Risers

Sirius Minerals (SXX) 3.60p 5.14%
FDM Group (Holdings) (FDM) 823.00p 3.78%
Barr (A.G.) (BAG) 604.00p 3.78%
Diploma (DPLM) 1,763.00p 3.64%
Future (FUTR) 1,546.00p 3.62%
Howden Joinery Group (HWDN) 613.60p 3.33%
Trainline (TRN) 442.50p 2.91%
Marks & Spencer Group (MKS) 182.70p 2.90%
Rank Group (RNK) 231.50p 2.89%
Softcat (SCT) 1,188.00p 2.86%

FTSE 250 - Fallers

Cineworld Group (CINE) 193.50p -2.37%
Centamin (DI) (CEY) 112.30p -2.01%
Renishaw (RSW) 3,872.00p -1.93%
RHI Magnesita N.V. (DI) (RHIM) 3,912.00p -1.61%
Capital & Counties Properties (CAPC) 264.00p -1.60%
Mediclinic International (MDC) 395.50p -1.45%
Inchcape (INCH) 645.50p -1.30%
Bank of Georgia Group (BGEO) 1,474.00p -1.21%
Sirius Real Estate Ltd. (SRE) 74.00p -1.20%
Synthomer (SYNT) 300.80p -1.18%