London midday: Stocks extend gains as traders pick up some bargains

Equity markets in London were extending gains by midday on Friday, recovering from the previous session’s losses.

The FTSE 100 was up 0.7% to 7,468.89, while the pound was down 0.2% against the euro at 1.1428 but was adding to the previous days gains against the dollar with a 0.1% rise to 1.2766.

On Thursday, stocks ended in the red as the pound was boosted by a more hawkish stance than expected from the Bank of England. Although the BoE stood pat on interest rates at 0.25%, as forecast, the vote revealed a 5-3 split on the monetary policy committee versus the previous and expected 7-1 split, catching investors off guard.

CMC Markets analyst David Madden said: “Traders have gotten to grips with the surprise that three members of the Bank of England voted to hike interest rates. Bargain hunting is in play today as dealers pick up cheap stocks.

“The political situation in the UK seems to be improving, as the Queen’s speech will take place on Wednesday, even if the Conservatives don’t have a deal in place with the Democratic Unionist Party (DUP) by then. This sign of political stability has added to the boost in investor confidence.”

Investors were also breathing a sigh of relief after eurozone ministers struck a deal to unlock the latest tranche of Greece's bailout cash. The bailout fund will disburse €8.5bn and help to avert a fresh debt crisis in July when the next loan repayment is due.

In UK corporate news, BHP Billiton edged higher after announcing that Ken MacKenzie - a former chief executive of Australian packaging giant Amcor - has been elected to succeed Jac Nasser as chairman with effect from 1 September following Nasser’s retirement.

Travel operator TUI and InterContinental Hotels were higher after encouraging travel and tourism data from the ONS, which showed the sharply weakened pound continues to encourage visits to the UK from abroad and more spend by visitors.

Aerospace and defence group Rolls-Royce ticked up after saying it has started 2017 well, with all businesses performing in line with its expectations. The company’s expectations for first half revenue, profit and free cash flow were left unchanged from that provided at the AGM in May.

Amec Foster Wheeler rallied after being been awarded an engineering procurement and construction contract worth AUD298m in Western Australia.

BTG gained ground as it announced a successful trial of its deep vein thrombosis treatment, while Ascential advanced after it said trading so far this year has been in line with expectations.

On the downside, however, Tesco gave up earlier gains to trade a little lower despite delivering first quarter UK sales ahead of City expectations even in the face of current tough conditions for the wider retail industry.

Market Movers

FTSE 100 (UKX) 7,468.89 0.67%
FTSE 250 (MCX) 19,737.81 0.94%
techMARK (TASX) 3,585.61 0.97%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,156.00p 2.21%
Rentokil Initial (RTO) 283.10p 2.20%
Mediclinic International (MDC) 796.00p 2.12%
Worldpay Group (WPG) 318.60p 2.12%
Hikma Pharmaceuticals (HIK) 1,673.00p 2.01%
Fresnillo (FRES) 1,589.00p 1.99%
Mondi (MNDI) 2,049.00p 1.94%
InterContinental Hotels Group (IHG) 4,385.00p 1.91%
Rolls-Royce Holdings (RR.) 911.50p 1.84%
Randgold Resources Ltd. (RRS) 7,220.00p 1.69%

FTSE 100 - Fallers

Anglo American (AAL) 975.30p -1.99%
BT Group (BT.A) 289.70p -1.29%
Ashtead Group (AHT) 1,585.00p -0.94%
Tesco (TSCO) 178.70p -0.69%
Sainsbury (J) (SBRY) 261.60p -0.30%
HSBC Holdings (HSBA) 685.50p -0.17%
Bunzl (BNZL) 2,381.00p -0.13%
Old Mutual (OML) 201.00p -0.10%
Barratt Developments (BDEV) 575.00p -0.09%
SSE (SSE) 1,470.00p -0.07%

FTSE 250 - Risers

Acacia Mining (ACA) 299.10p 4.29%
Cobham (COB) 134.20p 3.71%
NMC Health (NMC) 2,328.00p 3.70%
UBM (UBM) 731.50p 3.54%
Ted Baker (TED) 2,417.00p 3.07%
Sanne Group (SNN) 661.00p 3.04%
Halma (HLMA) 1,154.00p 3.04%
Rank Group (RNK) 230.80p 3.04%
Pets at Home Group (PETS) 159.40p 2.91%
Ocado Group (OCDO) 282.20p 2.88%

FTSE 250 - Fallers

CLS Holdings (CLI) 204.00p -2.53%
IP Group (IPO) 136.90p -2.14%
Crest Nicholson Holdings (CRST) 541.50p -1.72%
NewRiver REIT (NRR) 347.00p -1.14%
Riverstone Energy Limited (RSE) 1,264.00p -1.02%
Vedanta Resources (VED) 589.00p -0.93%
Daejan Holdings (DJAN) 6,390.00p -0.85%
Northgate (NTG) 523.50p -0.57%
Bovis Homes Group (BVS) 889.00p -0.56%
Go-Ahead Group (GOG) 1,797.00p -0.55%