London midday: Stocks maintain gains but Coca-Cola loses fizz on cautious outlook

London stocks were still in the green by midday on Thursday, underpinned by solid performances from the likes of Micro Focus and AstraZeneca, although Coca-Cola HBC lost its fizz as it struck a cautious note about the outlook.

The FTSE 100 was up 0.3% to 7,211.60, while the pound was down 0.1% against the dollar at 1.2831 and 0.2% lower versus the euro at 1.381.

Brexit-related headlines were likely to be eyed as MPs were set to debate and take a vote on the next steps in the process later in the day, with a series of amendments due to be considered.

CMC Markets analyst Michael Hewson said: "Prime Minister Theresa May will be putting forward a new parliamentary motion today that allows her to continue to negotiate with the EU to seek changes to the Irish backstop, as per the previous vote on the 29th January."

After rumours emerged of a threat from hard right Tories to rebel against Downing Street's apparent endorsement of an amendment that would rule out a no-deal Brexit, International Trade Secretary said opposition could “send the wrong signals” to Brussels.

More broadly, positive data out of China helped to underpin sentiment. Figures out earlier showed China's exports rose 9.1% in January from a year earlier compared to a 4.4% drop in December, coming in well ahead of expectations for a 3.2% decline. Meanwhile, imports were down 1.5% versus a 7.6% slump in December, beating expectations for a 10% decline.

This was balanced by news that Germany narrowly avoided a recession last year, with flat growth in the fourth quarter, while euro area economic growth kept pace with the third quarter to rise 0.2% in the final three months of 2018.

On the UK data front, investors were digesting the latest survey from the Royal Institution of Chartered Surveyors, which showed the UK housing market got off to a weak start in 2019, with enquiries, sales and new instructions all down, as Brexit uncertainty continued to take its toll.

RICS found that the number of new properties being listed in January had deteriorated to the lowest since July 2016, with new buyer enquiries falling for the sixth successive monthly and the average time to sell a property lengthening to 19.4 weeks – the longest since RICS started measuring this data point in 2017.

Contributors to the survey blamed Brexit for the weaker market conditions: "In the near term, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit continue to cause hesitancy, alongside affordability constraints in parts of the country."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Given that Brexit remains unresolved, activity and prices likely will continue to come under downward pressure in the near-term. But with both mortgage rates and unemployment low and banks willing to lend on a secured basis, the conditions are in place for a recovery when a no-deal Brexit has been averted."

In corporate news, Micro Focus was feeling the Valentine's Day love, surging to the top of the FTSE 100 as the software company's full-year revenue beat analysts' expectations.

Russ Mould, investment director at AJ Bell, said: "After a very damaging profit warning and a change of chief executive, the company is at last showing signs of putting the whole sorry episode behind it.

"Micro Focus had a well-earned reputation as a stock market cash machine in the first part of this decade. It returned some 600p per share in ordinary and special dividends between 2011 and 2017, prior to the HPE deal. Today’s full year results show some signs it can regain its credibility with investors in this regard as both cash flow, debt and revenue come in better than expected, the dividend is hiked and its share buyback scheme is extended."

AstraZeneca also rallied as it reported a strong fourth quarter, beating analyst expectations for revenues and earnings, with the drugs colossus guiding to another strong year ahead.

Indivior, Lancashire and Moneysupermarket all gained on the back of well-received results, but Coca-Cola HBC fell sharply. Although the company's full-year results were slightly ahead in terms of the top line, higher finance charges meant that earnings per share were a miss. In addition, it warned that a slowdown in economic growth in a number of its key markets this year was likely to dent consumer spending.

Convatec tumbled as the medical device maker posted a 6% drop in adjusted earnings before interest and tax for 2018, while Restaurant Group slid on the shock departure of chief executive officer Andy McCue for personal reasons.

BP, Hargreaves Lansdown, Shell, PZ Cussons and Rank were among the companies whose stock went ex-dividend.

In broker notes, Dunelm was downgraded to 'reduce' by HSBC, while RSA was cut to 'neutral' at JPMorgan. Royal Mail was upgraded to 'equalweight' by Morgan Stanley.

Market Movers

FTSE 100 (UKX) 7,211.60 0.29%
FTSE 250 (MCX) 18,961.30 -0.06%
techMARK (TASX) 3,514.94 1.64%

FTSE 100 - Risers

Micro Focus International (MCRO) 1,721.50p 13.44%
AstraZeneca (AZN) 6,003.00p 4.93%
ITV (ITV) 136.10p 1.83%
Mondi (MNDI) 1,905.00p 1.41%
InterContinental Hotels Group (IHG) 4,617.00p 1.35%
Spirax-Sarco Engineering (SPX) 6,695.00p 1.29%
BAE Systems (BA.) 523.80p 1.24%
Hikma Pharmaceuticals (HIK) 1,748.00p 1.10%
Experian (EXPN) 2,044.21p 1.10%
Carnival (CCL) 4,388.00p 1.08%

FTSE 100 - Fallers

Coca-Cola HBC AG (CDI) (CCH) 2,577.00p -4.34%
Next (NXT) 4,884.00p -1.51%
RSA Insurance Group (RSA) 537.60p -1.43%
Royal Dutch Shell 'B' (RDSB) 2,455.50p -1.39%
TUI AG Reg Shs (DI) (TUI) 820.60p -1.23%
BP (BP.) 544.60p -1.20%
Evraz (EVR) 527.20p -1.16%
Royal Dutch Shell 'A' (RDSA) 2,430.00p -1.00%
Smurfit Kappa Group (SKG) 2,402.00p -0.91%
British Land Company (BLND) 581.40p -0.78%

FTSE 250 - Risers

Indivior (INDV) 115.10p 6.03%
Lancashire Holdings Limited (LRE) 626.16p 5.24%
Moneysupermarket.com Group (MONY) 327.90p 4.89%
Premier Oil (PMO) 76.73p 3.76%
Intu Properties (INTU) 118.75p 3.35%
Dechra Pharmaceuticals (DPH) 2,452.00p 2.94%
Tullow Oil (TLW) 225.20p 2.74%
Aveva Group (AVV) 3,014.00p 2.59%
Mediclinic International (MDC) 317.50p 2.35%
Cineworld Group (CINE) 267.55p 1.96%

FTSE 250 - Fallers

Convatec Group (CTEC) 119.75p -19.22%
Restaurant Group (RTN) 124.70p -14.59%
Funding Circle Holdings (FCH) 320.00p -5.88%
Ashmore Group (ASHM) 395.20p -4.40%
Galliford Try (GFRD) 734.50p -3.80%
Plus500 Ltd (DI) (PLUS) 1,092.61p -3.22%
Ted Baker (TED) 1,875.00p -3.10%
Inmarsat (ISAT) 365.10p -3.05%
OneSavings Bank (OSB) 366.20p -2.24%
Clarkson (CKN) 2,450.00p -2.20%