London midday: Stocks flat amid Sino-US worries but housebuilders advance
London stocks had lost a little ground by midday on Friday, stabilising after heavy losses in the previous session but unable to make any headway amid fresh concerns about trade relations between the US and China.
The FTSE 100 was down 0.2% at 7,077.19, while the pound was up 0.1% against the dollar and the euro at 1.2959 and 1.1429, respectively.
Sino-US relations were back in focus after Trump said on Thursday that he wasn't planning on meeting with Chinese president Xi Jinping before the trade truce deadline on 1 March, prompting concerns that the two nations won't strike a deal before the end of the 90-day period.
London Capital Group analyst Jasper Lawler said: "Up to now the markets have been optimistic about a trade deal being reached, despite little solid evidence. Trump’s stance is now rattling investor nerves just weeks before the deadline. With US corporate earnings starting to dry up, traders' full focus will soon be back on trade developments. With no deal in sight this will have a negative bias on equity market flows."
Investors were also digesting a report that Trump is planning on signing an executive order banning Chinese telecom equipment from US wireless networks. According to Politico, the administration plans to release the directive before the MCW Barcelona conference, formerly the Mobile World Congress, later this month.
On the Brexit front, Prime Minister Theresa May was set to travel to Dublin for talks with her Irish counterpart, Leo Varadkar, following talks in Brussels on Thursday with European Commission President Jean-Claude Juncker.
Oanda analyst Craig Erlam said Thursday's talks went "as well as she could have hoped for", with both sides agreeing to worth together and meet again at the end of the month.
"Of course, this calls into question the point of the vote on 14 February in Parliament and will lead to further suggestions that May is simply running down the clock again and gambling on her deal being backed to avoid no deal," Erlam said.
In corporate news, SSE dipped as the energy company said full year adjusted EPS would be 6p lower as a result of the Capacity Market “standstill”, taking the forecast to 64p to 69p a share. The EU General Court ruled last November that Britain must halt payments under the scheme pending an investigation by European Union regulators. SSE said it was due £60m.
Elsewhere, ahead of what could be a quarrelsome annual shareholder meeting later in the day, property developer Shaftesbury slipped despite saying it had made some progress with its larger schemes at the start of its new financial year. The group, which owns a swathe of shopping streets in London's West End, reported the total portfolio valuation increased 3.8% to £3.95bn with estimated rental value up £9.5m to £154m.
On the upside, Ocado was making some gains following several days of heavy losses after a large fire broke out at its high-tech warehouse in Andover earlier in the week.
Luxury fashion brand Burberry was boosted by a solid set of results from French peer Hermes, which posted record sales for 2018 and said sales momentum in China remained strong in the fourth quarter.
Housebuilders were on the up, led by Barratt and Berkeley, as the National Audit Office put out a report saying that targets for new homes are likely to be missed by half of England’s local authorities. Barratt was also boosted by a report from Citi that said the stock still offers "multiple attractions of profitable growth".
In other broker notes, Centrica was hit by a downgrade to 'neutral' at Citi, while Smith & Nephew was dented by a downgrade at Exane.
Citi also resumed coverage of DS Smith at 'buy', while Travis Perkins was upgraded to 'outperform' at RBC Capital Markets.
Outside the FTSE 350, Earthport racked up solid gains as Visa sweetened its bid for the payment solutions business, fending off a rival offer from Mastercard.
Market Movers
FTSE 100 (UKX) 7,096.21 0.04%
FTSE 250 (MCX) 18,767.98 -0.17%
techMARK (TASX) 3,439.36 0.03%
FTSE 100 - Risers
Ocado Group (OCDO) 896.78p 2.63%
Barratt Developments (BDEV) 561.20p 1.48%
Smurfit Kappa Group (SKG) 2,200.00p 1.38%
Rentokil Initial (RTO) 359.80p 1.35%
Berkeley Group Holdings (The) (BKG) 3,808.00p 1.33%
Burberry Group (BRBY) 1,869.72p 1.31%
Croda International (CRDA) 5,072.00p 1.16%
RSA Insurance Group (RSA) 531.00p 1.14%
Sage Group (SGE) 641.60p 1.10%
Persimmon (PSN) 2,401.00p 0.97%
FTSE 100 - Fallers
Melrose Industries (MRO) 157.20p -4.70%
Centrica (CNA) 136.05p -2.16%
TUI AG Reg Shs (DI) (TUI) 934.40p -2.12%
Hargreaves Lansdown (HL.) 1,673.50p -1.85%
Smith & Nephew (SN.) 1,516.50p -1.84%
GVC Holdings (GVC) 646.28p -1.63%
Standard Life Aberdeen (SLA) 246.95p -1.57%
Marks & Spencer Group (MKS) 284.40p -1.52%
easyJet (EZJ) 1,287.50p -1.08%
Vodafone Group (VOD) 138.10p -0.92%
FTSE 250 - Risers
Petrofac Ltd. (PFC) 408.80p 3.49%
Serco Group (SRP) 115.20p 2.95%
Elementis (ELM) 188.60p 2.17%
Inmarsat (ISAT) 374.20p 2.02%
Tate & Lyle (TATE) 698.00p 1.90%
NewRiver REIT (NRR) 217.94p 1.60%
Cairn Energy (CNE) 202.00p 1.51%
Travis Perkins (TPK) 1,226.50p 1.49%
Amigo Holdings (AMGO) 248.00p 1.47%
UDG Healthcare Public Limited Company (UDG) 629.00p 1.29%
FTSE 250 - Fallers
TI Fluid Systems (TIFS) 174.30p -3.17%
Contour Global (GLO) 158.00p -2.83%
Vivo Energy (VVO) 129.62p -2.69%
BCA Marketplace (BCA) 201.50p -2.66%
Playtech (PTEC) 386.50p -2.28%
Fisher (James) & Sons (FSJ) 1,836.00p -2.24%
Aston Martin Lagonda Global Holdings (AML) 1,165.00p -2.10%
Beazley (BEZ) 510.00p -1.92%
Tullow Oil (TLW) 204.90p -1.87%
Bodycote (BOY) 747.50p -1.84%