London midday: Stocks maintain losses amid trade war concerns; Barratt bucks trend

London stocks were still in the red by midday on Thursday amid growing worries about Sino-US trade relations, after US President Trump blamed China for the breakdown in talks between the two nations, while ex-dividends also weighed.

The FTSE 100 was down 0.4% at 7,245.04, while the pound was down 0.2% against the dollar at 1.2982 and 0.1% lower versus the euro at 1.1605.

All eyes will be on the next round of negotiations between the US and China in Washington later in the day after Trump said at a rally in Florida on Wednesday that China "broke the deal" in trade talks. Meanwhile, China has vowed to retaliate if Trump lifts tariffs on Friday on $200bn of Chinese exports.

Oanda analyst Craig Erlam said: "Equity markets are trading back in the red on Thursday, as hopes of a deal between the US and China were quickly dashed, albeit not squashed altogether, making the next 48 hours of talks all the more important for markets.

"If people’s worst fears are realised and talks break down altogether, the market impact could be significant. One of the reasons we’ve seen such an incredible recovery from the fourth quarter sell-off has been the belief that it’s a case of when, not if, a deal will be reached. It was heavily priced in. The global shift from central banks towards a more accommodative stance has also been a major factor that could limit some of the downside but a breakdown in talks would be a massive blow.

"Thankfully, a complete breakdown is not one of the more likely outcomes of this week’s talks. That’s not to say that we won’t see more tariffs imposed but the lines of communication will likely stay open. As it stands, the best likely outcome is probably a delay in tariffs and continuation of talks. That may temporarily support markets but the intensity of negotiations will have to be ramped up."

On home shores, Prime Minister Theresa May was said to be planning to reintroduce her thrice-defeated EU withdrawal agreement for a vote before the EU parliamentary elections on 23 May.

Elsewhere, investors were mulling the latest survey from the Royal Institution of Chartered Surveyors, which showed the housing market remained in the doldrums last month.

The RICS gauge of house prices was steady in April from March at -23, remaining at its worst level in nearly eight years. Analysts had been expecting a reading of -22.

RICS said: "Market trends remain very similar to those reported in recent months, with headline indicators on demand, supply and prices all still stuck in negative territory. Brexit uncertainty and a lack of available stock to purchase remain the key constraints, meaning little change in momentum is anticipated in the near term. That said, expectations are at least slightly more positive at the twelve month horizon."

In equity markets, Centrica, Admiral, Hiscox, Card Factory, Polymetal and Ibstock all retreated as their stock went ex-dividend.

Paddy Power, William Hill and GVC Holdings were all trading lower after a new study in the British Medical Journal suggested there should be a mandatory tax on the gambling industry to treat addiction in the UK.

BT was in the red as it reported a drop in revenue and just a slight uptick in full-year profit as a solid performance from the consumer business was offset by weakness in the enterprise segment.

Shares in engineer IMI fell after it said trading conditions in the first quarter remained mixed, but results for the year are expected to be in line with current market expectations.

Morrisons was a touch weaker as it reported slowing sales growth in the first quarter. Like-for-like sales in the 13 weeks to 5 May, excluding fuel, rose 2.3%, while retail sales were up 0.2% and wholesale sales rose 2.1%.

On the upside, Barratt Developments advanced after the housebuilder said the outlook for the full year was "modestly" above the board's previous expectations, while RSA Insurance gained as it posted 3% increase in first-quarter net written premiums.

Market Movers

FTSE 100 (UKX) 7,245.04 -0.36%
FTSE 250 (MCX) 19,364.94 -0.85%
techMARK (TASX) 3,558.96 -0.35%

FTSE 100 - Risers

Barratt Developments (BDEV) 598.80p 2.18%
RSA Insurance Group (RSA) 544.60p 1.91%
Reckitt Benckiser Group (RB.) 6,207.00p 1.57%
Smith & Nephew (SN.) 1,600.00p 1.52%
Ocado Group (OCDO) 1,372.50p 1.44%
British American Tobacco (BATS) 2,883.00p 1.34%
AstraZeneca (AZN) 5,908.00p 1.25%
Auto Trader Group (AUTO) 581.60p 0.90%
Severn Trent (SVT) 1,971.00p 0.87%
National Grid (NG.) 830.60p 0.80%

FTSE 100 - Fallers

Centrica (CNA) 96.02p -8.55%
ITV (ITV) 118.70p -3.97%
Admiral Group (ADM) 2,051.00p -3.80%
Informa (INF) 759.00p -3.44%
Paddy Power Betfair (PPB) 6,018.00p -2.94%
Smith (DS) (SMDS) 338.40p -2.76%
Hiscox Limited (DI) (HSX) 1,576.00p -2.48%
International Consolidated Airlines Group SA (CDI) (IAG) 490.00p -2.16%
Kingfisher (KGF) 248.70p -2.09%
Standard Life Aberdeen (SLA) 266.30p -2.02%

FTSE 250 - Risers

Funding Circle Holdings (FCH) 239.00p 4.82%
Acacia Mining (ACA) 150.20p 3.16%
Sirius Minerals (SXX) 16.53p 2.60%
Avast (AVST) 314.80p 2.21%
Plus500 Ltd (DI) (PLUS) 561.60p 2.18%
Wetherspoon (J.D.) (JDW) 1,303.00p 1.32%
OneSavings Bank (OSB) 440.00p 1.20%
Derwent London (DLN) 3,230.00p 1.00%
Charter Court Financial Services Group (CCFS) 361.00p 0.98%
McCarthy & Stone (MCS) 134.20p 0.90%

FTSE 250 - Fallers

Metro Bank (MTRO) 557.00p -5.59%
William Hill (WMH) 141.40p -5.51%
Card Factory (CARD) 190.40p -4.56%
Polymetal International (POLY) 780.00p -4.18%
GVC Holdings (GVC) 592.40p -4.08%
IMI (IMI) 972.80p -4.06%
Premier Oil (PMO) 87.58p -3.76%
Aston Martin Lagonda Global Holdings (AML) 856.00p -3.74%
Saga (SAGA) 55.15p -3.58%
Rathbone Brothers (RAT) 2,375.00p -3.46%