London midday: Stocks flutter higher as Paddy Power surges

London equity markets had maintained modest gains by midday on Wednesday, helped along by a stellar performance from Paddy Power Betfair and strength in the tobacco sector, but with Brexit and Sino-US trade worries limiting the upside.

The FTSE 100 was up 0.2% at 7,196.66, while the pound was down 0.3% against the dollar and the euro at 1.3141 and 1.1625, respectively, after talks between the EU’s chief Brexit negotiator Michel Barnier and UK attorney general Geoffrey Cox and Brexit minister Stephen Barclay on Tuesday ended with no signs of a breakthrough.

Investors were also mulling a warning from the OECD, which said a no-deal Brexit would plunge the UK economy into a recession, while annual growth would fall below 1% this year for the first time since the financial crisis even if a deal is agreed.

"Though the markets had plenty of reason to despair on Wednesday, they instead settled for something altogether blander and more subdued," said Spreadex analyst Connor Campbell.

In equity markets, Paddy Power Betfair surged as it announced plans to change its name to Flutter Entertainment and reported underlying EBITDA of £451m that was at the top end of prior guidance.

British American Tobacco and Imperial Brands racked up strong gains as investors cheered news that US FDA Commissioner Scott Gotlieb - who was spearheading a ban on menthol cigarettes - has resigned.

Packaging group DS Smith gained ground as it said trading since 1 November has continued to be strong and in line with its expectations, as it announced the sale of its plastics division to Olympus Partners for an enterprise value of $585m (around £450m).

Ultra Electronics was the biggest riser on the FTSE 250 as the defence company hiked its dividend after full-year revenue beat expectations but profits fell.

On the downside, Legal & General was in the red even as it lifted its total dividend 7% to 16.42p after reporting 10% growth in operating profit to £1.9bn for 2018.

David Cheetham, chief market analyst at XTB, said: "A worse-than-expected solvency ratio and a below forecast level of cash generation are not to be taken lightly, but the long term prospects seem to remain favourable for the firm going forward, with the selling seen likely just a case of investors taking some profits off the table after an impressive run higher of late."

Burberry retreated after a downgrade to ‘sell’ from ‘neutral’ at Goldman Sachs, which highlighted a demanding valuation. Intertek was knocked lower by a downgrade to ‘underweight’ at Barclays and John Laing by a downgrade to ‘hold’ at HSBC.

Just Eat was weaker even as it said it swung to a pre-tax profit in the year to the end of December 2018, with analysts noting concerns about the company’s strategy going forward.

Market Movers

FTSE 100 (UKX) 7,196.66 0.18%
FTSE 250 (MCX) 19,412.32 -0.16%
techMARK (TASX) 3,507.44 0.28%

FTSE 100 - Risers

Paddy Power Betfair (PPB) 7,163.00p 14.98%
Wood Group (John) (WG.) 575.40p 4.77%
Smith (DS) (SMDS) 364.30p 4.35%
GVC Holdings (GVC) 722.50p 3.66%
British American Tobacco (BATS) 3,005.00p 3.60%
Evraz (EVR) 599.88p 1.36%
BHP Group (BHP) 1,781.00p 1.34%
Antofagasta (ANTO) 964.00p 1.22%
Imperial Brands (IMB) 2,607.50p 1.20%
Anglo American (AAL) 2,041.00p 1.14%

FTSE 100 - Fallers

Legal & General Group (LGEN) 273.90p -4.30%
Burberry Group (BRBY) 1,901.50p -2.66%
Prudential (PRU) 1,604.25p -1.34%
Aviva (AV.) 433.10p -1.30%
Intertek Group (ITRK) 4,932.00p -1.28%
British Land Company (BLND) 602.20p -1.12%
London Stock Exchange Group (LSE) 4,684.00p -1.08%
Rentokil Initial (RTO) 354.90p -1.06%
Taylor Wimpey (TW.) 182.60p -1.03%
National Grid (NG.) 841.40p -1.01%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 1,432.00p 11.53%
Centamin (DI) (CEY) 95.02p 4.74%
Elementis (ELM) 168.60p 3.31%
Indivior (INDV) 111.95p 3.27%
Equiniti Group (EQN) 207.87p 2.91%
Greencore Group (GNC) 202.50p 2.77%
Kaz Minerals (KAZ) 664.60p 2.63%
Genus (GNS) 2,300.00p 2.50%
IMI (IMI) 1,013.00p 2.32%
Aston Martin Lagonda Global Holdings (AML) 1,094.20p 2.26%

FTSE 250 - Fallers

John Laing Group (JLG) 373.00p -3.87%
Contour Global (GLO) 176.64p -3.58%
Syncona Limited NPV (SYNC) 274.50p -3.51%
Amigo Holdings (AMGO) 220.00p -3.00%
Capita (CPI) 121.45p -2.49%
Mediclinic International (MDC) 321.40p -2.28%
Polypipe Group (PLP) 410.40p -2.05%
Riverstone Energy Limited (RSE) 1,004.00p -1.95%
Dunelm Group (DNLM) 857.50p -1.94%
Ibstock (IBST) 255.20p -1.85%