London midday: Stocks flat despite jump in the pound

Stocks are little changed going into the Bank holiday, weighed down by a sharp move higher in sterling.

As of 1202 BST, the FTSE 100 edging higher by 0.02% to 6,000.48, while the pound was up by 0.77% at 1.3303 versus the US dollar.

Gold was rallying alongside, climbing 1.47% to $1,957.97/oz. on COMEX.

Stoking gains in the pound, the day before the US central bank had signalled that interest rates would remain lower for longer, but contrary to many analysts, Michael Every at Rabobank said the Fed had in fact done less than was expected "that’s it. Not even yield curve control. Not even nominal GDP targeting. Nada."

"Really? By doing nothing for longer against a post-Covid-19 structural backdrop that is far, far worse than it was when the Fed’s policy review began, the odds of it meeting its future goals have improved?" he added.

For their part, strategists at Bank of America cautioned clients that there was a certain risk of a "disorderly jump in yields" as global policy stimulus peaked in September - although they expected the S&P 500 to reach the 3,630 point mark.

Against that backdrop, investors were waiting on a batch of important economic reports, particularly on a final reading on US consumer confidence from the University of Michigan at 1500 BST.

Two days before another survey, from the Conference Board this time, had revealed a large unexpected drop in Americans' levels of confidence.

On home shores, Lloyds Bank Business Barometre on the other hand showed an improvement in overall business confidence for a third consecutive month in August, improving by eight percentage points to -14%, but it remained well below the historical long-term average.

Indeed, roughly half of the firms surveyed still had staff on furlough or were not yet ready to commit to retaining everyone.

To take note of, Andrew Bailey, the Governor of the Bank of England, is due to speak at the Jackson Hole Economic Symposium 1405 BST.

Amigo Holdings spikes higher, Greggs closes distribution centre

Amigo Holdings said it had enough liquidity to survive as the troubled guarantor lender reported a sharp fall in first-quarter profit. Profit after tax for the three months to the end of June dropped 81% to £3m from a year earlier as revenue fell 32% to £48.8m. Pretax profit fell to £1.4m from £22.6m.

Greggs was lower following news that its distribution centre in Leeds had been temporarily closed to conduct a 'deeo clean' after some staff tested positive for Covid-19.

Essentra said business was improving and that it would consider restarting dividends in the current year as it posted a 40% decline in underlying profit. Adjusted operating profit for the six months to the end of June fell to £29m from £48m as revenue dropped 11% to £448m. The company paid no interim dividend and said it was on track to meet market expectations for annual profit.

Avon Rubber said on Friday that the US Department of Defence has announced the award of a dual source contract to supply replacement M61 filters for the M50 mask system. Avon will compete for each order of the $127m contract over a duration of up to seven years. The contract has a five-year base period and two further one-year extension periods. The contract and first order are expected shortly, with deliveries set to begin in the 2021 financial year.

Resolute Mining reported a 33% improvement in revenues in its first half on Friday, to $305.29m (£230.24m), as its EBITDA surged 85% year-on-year to $101.11m. The AIM-traded firm declared no interim dividend for the six months ended 30 June, in line with the prior year, as its all-in sustaining cost rose to $1,020 per ounce, from $828 a year earlier.

Video games publisher Frontier Developments said on Friday that year-to-date sales had been consistent with expectations as momentum from its strong close to the prior trading year carried over to the new one. Based on its strong performance to date and projections for the rest of the trading year, the AIM-listed firm now expects to deliver revenues within the top half of current expectations at around £83.0m to £95.0m.

Market Movers

FTSE 100 (UKX) 5,998.96 -0.02%
FTSE 250 (MCX) 17,737.47 -0.14%
techMARK (TASX) 3,845.54 -0.20%

FTSE 100 - Risers

Polymetal International (POLY) 2,002.00p 3.20%
Whitbread (WTB) 2,529.00p 2.93%
Prudential (PRU) 1,228.00p 2.42%
Fresnillo (FRES) 1,256.00p 2.32%
Anglo American (AAL) 1,838.60p 1.93%
Standard Chartered (STAN) 390.80p 1.66%
Antofagasta (ANTO) 1,079.50p 1.36%
Barclays (BARC) 111.86p 1.19%
NATWEST GROUP PLC ORD 100P (NWG) 113.30p 1.12%
HSBC Holdings (HSBA) 331.50p 1.05%

FTSE 100 - Fallers

Melrose Industries (MRO) 102.50p -2.84%
ITV (ITV) 59.94p -2.66%
WPP (WPP) 646.80p -2.65%
Smurfit Kappa Group (SKG) 2,686.00p -2.47%
Smith (DS) (SMDS) 260.70p -2.32%
Rolls-Royce Holdings (RR.) 244.40p -2.24%
Ocado Group (OCDO) 2,468.00p -2.06%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,418.00p -1.89%
Kingfisher (KGF) 271.20p -1.88%
Pearson (PSON) 561.00p -1.75%

FTSE 250 - Risers

Petropavlovsk (POG) 35.20p 4.92%
Wood Group (John) (WG.) 243.50p 4.33%
Centrica (CNA) 45.67p 3.87%
Calisen (CLSN) 172.00p 3.21%
Pantheon International (PIN) 2,250.00p 2.97%
Softcat (SCT) 1,392.00p 2.88%
Cineworld Group (CINE) 61.86p 2.83%
Mitchells & Butlers (MAB) 174.60p 2.59%
Ashmore Group (ASHM) 419.40p 2.49%
Signature Aviation (SIG) 265.80p 2.39%

FTSE 250 - Fallers

Micro Focus International (MCRO) 288.00p -4.03%
Rank Group (RNK) 136.40p -3.54%
Schroder Oriental Income Fund Ltd. (SOI) 234.00p -3.31%
Apax Global Alpha Limited (APAX) 167.00p -3.24%
Future (FUTR) 1,496.00p -3.11%
Coats Group (COA) 55.20p -2.82%
AO World (AO.) 199.00p -2.69%
Greggs (GRG) 1,402.00p -2.64%
BlackRock Smaller Companies Trust (BRSC) 1,208.00p -2.58%
Herald Investment Trust (HRI) 1,632.00p -2.51%