London midday: Stocks rise further as miners rally, pound loses ground

London stocks had extended gains by midday on Monday thanks to strength in the mining sector and a well-received update from NMC Health, with a weaker pound also lending a hand.

The FTSE 100 was up 0.3% to 7,072.38, while the pound was down 0.3% against the dollar at 1.3031 and 0.2% lower versus the euro at 1.1327 amid growing speculation that Prime Minster Theresa May could soon face a vote of no confidence.

Declines in the pound were fairly measured at present but, said David Cheetham, chief market analyst at XTB, the added uncertainty of the PM being ousted at such a critical time in Brexit negotiations could cause a swoon lower - particularly if May is replaced by former someone like Brexit secretary David Davis, who would likely push for a harder separation.

Backbench MPs have demanded that May appears before the 1922 Committee on Wednesday night with unrest growing amongst the Tories after reports last week the PM is considering an extension to the transition period. There were reports that 46 Tory MPs have sent letters of no confidence to the chairman of the influential committee, just short of the 48 needed to trigger a leadership contest.

Cheetham said: "While it seems like the sharks are circling Theresa May once more and the pressure on the PM from her own party has never been greater with support from all sides seemingly in decline, even her fiercest critics are aware that ousting her could backfire. The danger as far as they are concerned is that the most likely replacement as a caretaker PM, David Davis, may still fail to unify the party and unless they can come closer to a united front then they risk opening the door for Labour."

Investors were also keeping an eye on Italy after Moody’s downgraded the country’s credit rating on Friday to Baa3, one notch above "junk". After the EU rejected Italy's budget plan to lift the deficit to 2.4% of domestic output next year from 1.8% in 2018, the government responded on Monday to say it will adjust its fiscal policies if it risks falling short of its deficit commitments. Italian stocks were higher on Monday, but government bonds were sold off, raising yields.

Back in London, miners put in a strong performance, with Anglo American, Antofagasta and Glencore all higher as metals prices rallied after Chinese officials promised to support the country's economy.

In individual company news, Gulf region hospital operator NMC Health gave its shares a shot in the arm as it provided an improved set of revenue and earning guidance for this year and next.

Ryanair flew higher even as it posted a 7% drop in profit for the six months to 30 September, as its half-year numbers were broadly in line with expectations. EasyJet was also in the green.

Drug titan AstraZeneca was higher after it and partner Merck said results from a phase 3 clinical trial for their ovarian cancer treatment showed a reduction of disease progression or death by 70%.

Budget retailer B&M was on the front foot after announcing late on Friday that it had bought French chain Babou.

GVC Holdings, Paddy Power Betfair, William Hill and Rank Group were all under the cosh following a report over the weekend that Chancellor Philip Hammond will clamp down on offshore gambling companies in the Budget next week.

Department store chain Debenhams was also weaker following a report that it’s preparing a radical overhaul of its 200-year-old business that will include reviewing its store portfolio and slashing its dividend to zero.

Defence company QinetiQ was little changed as it agreed buy 85% of Inzpire Group - which provides operational training and mission systems for military customers in the UK and internationally - with an agreement to acquire the rest after two years, for a total of £23.5m.

In broker note action, Fresnillo racked up strong gains after an upgrade to ‘buy’ at Bank of America Merrill Lynch, while Hunting was upgraded to ‘outperform’ at Macquarie.

Rightmove and Man Group were both boosted to 'buy' at UBS. Ophir Energy and Tullow Oil were bumped up to ‘buy’ at Jefferies, but Cairn Energy was cut to ‘underperform’ and Convatec was downgraded by HSBC.

AIM-listed double glazing group Safestyle was lifted to ‘buy’ at Liberum.

Market Movers

FTSE 100 (UKX) 7,098.96 0.70%
FTSE 250 (MCX) 18,864.69 0.37%
techMARK (TASX) 3,322.68 0.04%

FTSE 100 - Risers

NMC Health (NMC) 3,268.00p 7.85%
easyJet (EZJ) 1,105.50p 3.51%
Rightmove (RMV) 436.10p 3.26%
Fresnillo (FRES) 915.80p 3.18%
Lloyds Banking Group (LLOY) 57.57p 2.57%
Anglo American (AAL) 1,679.40p 2.54%
Antofagasta (ANTO) 786.40p 2.40%
Glencore (GLEN) 315.60p 2.35%
Royal Mail (RMG) 352.20p 2.26%
Hargreaves Lansdown (HL.) 1,836.00p 2.03%

FTSE 100 - Fallers

GVC Holdings (GVC) 937.00p -2.40%
Paddy Power Betfair (PPB) 6,635.00p -1.78%
Rentokil Initial (RTO) 300.20p -1.18%
SSE (SSE) 1,140.00p -0.87%
InterContinental Hotels Group (IHG) 4,038.00p -0.79%
Vodafone Group (VOD) 151.28p -0.77%
Centrica (CNA) 148.05p -0.77%
Whitbread (WTB) 4,502.00p -0.73%
Relx plc (REL) 1,507.50p -0.56%
Wood Group (John) (WG.) 726.60p -0.55%

FTSE 250 - Risers

B&M European Value Retail S.A. (DI) (BME) 408.00p 5.86%
Man Group (EMG) 148.75p 4.90%
Sirius Minerals (SXX) 25.43p 3.63%
Wizz Air Holdings (WIZZ) 2,464.00p 3.27%
Ferrexpo (FXPO) 223.80p 2.85%
Avast (AVST) 289.45p 2.79%
Kaz Minerals (KAZ) 481.90p 2.75%
Hunting (HTG) 715.50p 2.65%
Fidelity China Special Situations (FCSS) 196.33p 2.58%
Computacenter (CCC) 1,300.00p 2.52%

FTSE 250 - Fallers

Greencore Group (GNC) 189.05p -3.05%
Convatec Group (CTEC) 151.10p -2.83%
William Hill (WMH) 220.90p -2.52%
Provident Financial (PFG) 533.80p -2.41%
Go-Ahead Group (GOG) 1,606.00p -2.31%
Entertainment One Limited (ETO) 437.80p -2.19%
Rank Group (RNK) 155.40p -2.14%
Sophos Group (SOPH) 469.00p -2.01%
Cairn Energy (CNE) 210.40p -1.77%
FirstGroup (FGP) 86.21p -1.75%