London midday: Stocks fall as pound rallies amid Trump policy doubts
Stocks in London were weaker by midday on Monday as the pound rallied against the dollar amid growing doubts about Donald Trump's ability to deliver on his fiscal stimulus promises after Republican leaders withdrew his healthcare bill due to a lack of support.
The FTSE 100 was down 0.8% to 7,280.34, while the pound gained 1% to $1.2586, trading at its highest levels against the dollar in seven weeks.
Oil prices slipped back after an unscheduled OPEC meeting over the weekend, where the cartel of major producers announced that they would stick to their plan to reduce production and said cuts could be extended up to six months. West Texas Intermediate was down 0.8% to $47.60 a barrel and Brent crude was off 0.5% to $50.54.
In addition, investors were looking to Wednesday, when Prime Minister Theresa May is set to trigger Article 50 and kick off formal divorce proceedings with the European Union.
Cyclical stocks such as miners and banks were the worst performers. Miners were weighed by a drop in base metals prices, which were likely hit by worries about delays to infrastructure spending in the US. Meanwhile, banks were hit by the potential difficulty in implementing much-desired US de-regulation and widespread tax cuts, said Mike van Dulken, head of research at Accendo Markets.
However, precious metals miners were boosted as gold and silver prices jumped on the back of the weaker dollar. Randgold Resources and Fresnillo were both in the black.
Van Dulken said: "The question now is whether this Trump trip-up is a blueprint for the rest of his campaign promises; whether Republican divides are too big to overcome. He may have written 'The art of deal', but he must be smarting at this no-deal.
"Or could it in fact allow him to proceed more quickly with the other more pro-growth, pro-business stimulus/reforms that were arguably the bigger foundations for the Trumpflation rally that is now under fire."
Elsewhere, BT was under the cosh after being fined £42m by regulator Ofcom for cutting compensation to rivals for delays in providing high speed broadband, with the telecoms giant forced to pay £300m in compensation in the coming 12 months.
FTSE 250 aerospace and defence group Cobham retreated after saying that it has been referred to the Financial Conduct Authority's enforcement division for investigation in connection with its handling of inside information prior to its trading update and announcement of a rights issue on 26 April 2016.
Old Mutual slipped after striking a deal to offload almost half of its stake in its asset management business for $446m.
Energy services firm Wood Group gushed lower after saying it has extended its North Sea contract with explorer Premier Oil for a further two years in a deal worth $50m and which will secure more than 150 jobs.
Transport operator FirstGroup rallied after winning the seven-year contract from the UK Department for Transport to operate trains on the South Western rail franchise. Rival Stagecoach, which was among those on the short-list that missed out, saw its shares slide into the red.
Ryanair shares flew higher after Bank of America Merrill Lynch upgraded the stock to 'neutral' from 'underperform', but British Airways and Iberia parent International Consolidated Airlines slid after a double downgrade to 'underperform'.
Just Eat was on the front foot after an upgrade to 'buy' at UBS, while Inchcape was lifted by an upgrade at Exane BNP Paribas.
Market Movers
FTSE 100 (UKX) 7,280.34 -0.77%
FTSE 250 (MCX) 18,902.01 -0.41%
techMARK (TASX) 3,444.44 -0.45%
FTSE 100 - Risers
Next (NXT) 4,188.00p 1.40%
Randgold Resources Ltd. (RRS) 7,230.00p 0.98%
Marks & Spencer Group (MKS) 335.00p 0.93%
Centrica (CNA) 218.30p 0.88%
DCC (DCC) 7,025.00p 0.72%
Fresnillo (FRES) 1,556.00p 0.71%
Johnson Matthey (JMAT) 2,937.00p 0.48%
Whitbread (WTB) 3,925.00p 0.38%
Kingfisher (KGF) 325.00p 0.37%
Barratt Developments (BDEV) 544.50p 0.37%
FTSE 100 - Fallers
Babcock International Group (BAB) 883.50p -3.60%
Glencore (GLEN) 308.35p -3.57%
International Consolidated Airlines Group SA (CDI) (IAG) 530.50p -3.46%
BHP Billiton (BLT) 1,207.00p -3.05%
Anglo American (AAL) 1,216.00p -2.91%
Antofagasta (ANTO) 808.00p -2.71%
Rolls-Royce Holdings (RR.) 740.00p -2.18%
Rio Tinto (RIO) 3,186.50p -2.18%
CRH (CRH) 2,760.00p -2.16%
Barclays (BARC) 222.80p -1.83%
FTSE 250 - Risers
Inchcape (INCH) 840.00p 4.35%
FirstGroup (FGP) 127.10p 2.42%
JRP Group (JRP) 139.80p 2.04%
IG Group Holdings (IGG) 505.00p 1.75%
Essentra (ESNT) 516.50p 1.57%
Millennium & Copthorne Hotels (MLC) 448.40p 1.56%
Acacia Mining (ACA) 469.90p 1.27%
BTG (BTG) 573.50p 1.24%
Bovis Homes Group (BVS) 879.00p 1.21%
G4S (GFS) 301.10p 1.14%
FTSE 250 - Fallers
Kaz Minerals (KAZ) 448.10p -5.06%
Evraz (EVR) 209.80p -4.51%
Allied Minds (ALM) 306.20p -3.41%
Vedanta Resources (VED) 783.50p -3.21%
Hunting (HTG) 545.50p -2.94%
Ferrexpo (FXPO) 163.10p -2.92%
Cobham (COB) 125.80p -2.63%
Berendsen (BRSN) 774.00p -2.58%
Weir Group (WEIR) 1,845.00p -2.43%
Virgin Money Holdings (UK) (VM.) 319.70p -2.38%