London midday: Stocks extend losses as Barclays, IAG reverse course

London stocks had pushed further into the red by midday following a series of disappointing corporate releases, at the end of what has been a manic week for earnings.

The FTSE 100 was down 0.7% to 7,387.61, while the pound was down 0.2% against the euro at 1.1171 and up 0.1% versus the dollar at 1.3078.

Investors were digesting the latest GfK survey, which showed economic confidence among British people has deteriorated to its lowest print since the Brexit referendum. GfK's consumer confidence index weakened to -12 in July from -10 the month before, with four of its five segments on the wane.

On the UK political front, Chancellor Philip Hammond said Britain's relationship with the EU was likely to look very similar to the current situation for up to three years after Brexit as a transitional agreement is put in place.

Looking ahead to the rest of the day, market participants were likely to turn their attention to the release of US second-quarter GDP figures in the afternoon.

David Morrison, senior market strategist at SpreadCo, said: "The consensus forecast was coalescing around an annualised increase of 2.5%, although yesterday’s 6.5% surge in headline Durable Goods has led some analysts to hope for an upside surprise. Certainly, that’s what the Atlanta Fed’s GDP now forecasting model is predicting.

"Yesterday it published its latest update which suggests today’s advance GDP could be as strong as 2.8%, up from its forecast of a 2.5% gain last week. If so, this will provide further ammunition for those stock market bulls who, until last night’s Amazon-led tech tumble, were enjoying a strong earnings season."

In corporate news, Barclays reversed earlier gains to trade lower after a mixed set of interim results, with some profits better and some worse than expected due in part to putting aside an extra £700m for PPI mis-selling compensation.

Telecommunications group BT retreated after saying earnings fell in the first quarter, with adjusted EBITDA down 2% to £1.79bn, although reported revenue was 1% higher at £5.84bn.

British Airways and Iberia parent International Consolidated Airlines Group also moved into the red as it reported a 14% jump in first-half operating profit and said it expects profit for the year to rise by a double-digit percentage.

IMI fell despite reporting an 11% jump in first-half revenue and a 13% increase pre-tax profit, while UBM lost ground after posting an 18% rise in half-year revenue.

Essentra was lower as the components manufacturer said half-year profits dropped 49%, while Rotork slumped as it announced the resignation of chief executive Peter France with immediate effect.

Johnson Matthey turned lower after saying the first-quarter saw low single-digit sales growth at constant exchange rates but with the weak pound boosting sales to double-digit growth, which was all in line with expectations.

Property website Rightmove reversed course to trade a touch higher after reporting an 11% increase in first-half operating profit and a 16% boost to the interim dividend.

Market Movers

FTSE 100 (UKX) 7,387.61 -0.74%
FTSE 250 (MCX) 19,679.35 -1.01%
techMARK (TASX) 3,441.36 -1.05%

FTSE 100 - Risers

Diageo (DGE) 2,446.00p 1.56%
Pearson (PSON) 664.50p 1.22%
AstraZeneca (AZN) 4,361.50p 0.84%
Royal Dutch Shell 'B' (RDSB) 2,124.00p 0.62%
Royal Dutch Shell 'A' (RDSA) 2,109.00p 0.57%
Babcock International Group (BAB) 849.00p -0.12%
Royal Bank of Scotland Group (RBS) 251.00p -0.12%
Coca-Cola HBC AG (CDI) (CCH) 2,278.00p -0.13%
WPP (WPP) 1,546.00p -0.19%
SSE (SSE) 1,377.00p -0.22%

FTSE 100 - Fallers

BT Group (BT.A) 304.90p -3.56%
Johnson Matthey (JMAT) 2,834.00p -2.38%
Hargreaves Lansdown (HL.) 1,343.00p -2.33%
Next (NXT) 3,840.00p -2.22%
Fresnillo (FRES) 1,507.00p -2.02%
Convatec Group (CTEC) 307.00p -2.01%
Micro Focus International (MCRO) 2,239.00p -1.97%
easyJet (EZJ) 1,257.00p -1.95%
CRH (CRH) 2,668.00p -1.84%
Associated British Foods (ABF) 2,930.00p -1.78%

FTSE 250 - Risers

Morgan Advanced Materials (MGAM) 298.00p 2.09%
John Laing Group (JLG) 315.70p 1.97%
Sirius Minerals (SXX) 30.07p 1.90%
JD Sports Fashion (JD.) 362.90p 1.20%
Dunelm Group (DNLM) 599.50p 1.10%
Paysafe Group (PAYS) 592.50p 0.94%
CLS Holdings (CLI) 206.10p 0.93%
Essentra (ESNT) 540.00p 0.84%
Euromoney Institutional Investor (ERM) 1,090.00p 0.83%
Coats Group (COA) 77.60p 0.78%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 245.30p -9.15%
Rotork (ROR) 238.80p -5.24%
IMI (IMI) 1,222.00p -5.05%
Just Eat (JE.) 642.50p -4.25%
Kaz Minerals (KAZ) 682.50p -3.47%
Vedanta Resources (VED) 756.00p -3.32%
Hikma Pharmaceuticals (HIK) 1,401.00p -3.18%
Capital & Counties Properties (CAPC) 285.90p -3.08%
Ocado Group (OCDO) 298.20p -2.64%
Fisher (James) & Sons (FSJ) 1,514.00p -2.51%