London midday: Stocks tick lower as pound gains; ZPG rises on takeover deal
London stocks had ticked just a touch lower by midday on Friday as the pound regained some ground a day after being hit by a dovish Bank of England, although ZPG bucked the trend after the Zoopla owner agreed to be bought by US private equity firm Silver Lake.
The FTSE 100 was down 0.1% to 7,693.76, while the pound was up 0.2% against the euro to 1.1367 and 0.4% higher versus the dollar at 1.3576.
Speaking to BBC radio earlier, BoE deputy governor Ben Broadbent denied that the central bank was sending out mixed messages on interest rates: "We have given some guidance that we are going to raise rates over the next few years but that has never been a promise that we are going to raise rates at a particular point in time," he said.
"If you read what we said in the early part of the year it was clearly a conditional statement. It says if the economy turns out in line with the forecast then interest rate rises may come sooner than people expected."
David Cheetham, chief market analyst at XTB, said: "Whilst the outlook appears far rosier than it was just a few months back, there are potential challenges ahead which could well sour risk appetite once more. From a global perspective the main one is trade and what implications the proposed tariffs from the US will have as well as any reciprocal arrangements. Furthermore, seasonality could play a factor with the old trading adage ‘sell-in-May-and-go-away’ now in effect.
"The historical returns on the FTSE over the past decade have actually not been too bad, but June is actually the worst single month of the year for UK stocks. For now the market remains firm and looks in good health but any signs of a reversal or the re-emergence of trade war talk could see investors look to take some money off the table after the decent run higher seen in recent months."
In corporate news, Zoopla and PrimeLocation owner ZPG rocketed after agreeing to be bought by US private equity firm Silver Lake Management for 490p per share in cash, or £2.2bn. Rightmove and Auto Trader also gained on positive read-across from the deal.
BBA Aviation rose after saying its trading performance in the first quarter remained in line with expectations, with revenue for the period up 9.7% year-on year, reflecting good organic growth in its Signature division.
3i Infrastructure was higher as it hailed an "outstanding" year, with net asset value up 28.6%, while Wood Group racked up strong gains after saying it was seeing good momentum in trading.
Paragon Banking nudged up after announcing the appointment of senior independent director Fiona Clutterbuck as its new chairman with effect from 10 May, succeeding Bob Dench.
On the downside, AstraZeneca slipped after saying that a late-stage trial for its first respiratory biologic drug failed to meet its primary goal in treatment of chronic obstructive pulmonary disease.
Interserve fell as the City watchdog's enforcement division launched an investigation into the company’s handling of inside information and its disclosures to the market over its troublesome exit from the energy-from-waste business.
Embattled retailer Carpetright was in the red as it said it has agreed a £15m unsecured loan from its biggest shareholder, Meditor, ahead of its planned £60m equity placing next week.
In broker note action, bakery chain Greggs was lower after Berenberg downgraded the stock to ‘hold’ and Severn Trent was under the cosh as Bernstein cut the stock to ‘underperform’ from ‘market perform’, while United Utilities was down after Bernstein cut its price target.
ITV was lifted by strong broker write-ups following its results a day earlier, with JP Morgan Cazenove highlighting its "strategic value".
Renishaw fell after a downgrade to ‘reduce’ at Peel Hunt and EasyJet was lifted to ‘buy’ by Goodbody. RBS was upgraded to ‘hold’ at Societe Generale and Rathbone Brothers was bumped up to ‘buy’ at Canaccord.
InterContinental Hotels was downgraded to ‘neutral’ from ‘buy’ at Bank of America Merrill Lynch, while G4S was lifted to ‘outperform’ at Exane.
Market Movers
FTSE 100 (UKX) 7,693.76 -0.09%
FTSE 250 (MCX) 20,788.39 0.43%
techMARK (TASX) 3,489.86 -0.12%
FTSE 100 - Risers
ITV (ITV) 168.85p 5.30%
G4S (GFS) 267.70p 2.76%
Evraz (EVR) 514.20p 2.59%
Royal Bank of Scotland Group (RBS) 293.60p 2.48%
easyJet (EZJ) 1,728.50p 2.31%
Randgold Resources Ltd. (RRS) 5,782.00p 1.90%
Royal Mail (RMG) 622.20p 1.77%
Micro Focus International (MCRO) 1,290.50p 1.45%
Glencore (GLEN) 381.40p 1.38%
BAE Systems (BA.) 626.80p 1.26%
FTSE 100 - Fallers
Severn Trent (SVT) 1,973.00p -2.33%
Next (NXT) 5,452.00p -2.08%
United Utilities Group (UU.) 766.80p -1.84%
DCC (DCC) 7,355.00p -1.41%
Associated British Foods (ABF) 2,756.67p -1.37%
Admiral Group (ADM) 1,948.50p -1.19%
GlaxoSmithKline (GSK) 1,460.00p -1.15%
Relx plc (REL) 1,589.00p -1.03%
Old Mutual (OML) 258.30p -1.00%
Experian (EXPN) 1,742.12p -0.90%
FTSE 250 - Risers
ZPG Plc (ZPG) 489.60p 30.49%
Wood Group (John) (WG.) 640.20p 8.99%
Rightmove (RMV) 4,843.00p 5.21%
Stobart Group Ltd. (STOB) 240.63p 4.17%
Auto Trader Group (AUTO) 384.10p 3.61%
Virgin Money Holdings (UK) (VM.) 341.30p 2.99%
FirstGroup (FGP) 104.80p 2.95%
CYBG (CYBG) 320.00p 2.56%
Intu Properties (INTU) 203.40p 2.42%
TalkTalk Telecom Group (TALK) 136.40p 2.33%
FTSE 250 - Fallers
Renishaw (RSW) 5,220.00p -5.43%
Capita (CPI) 123.00p -4.32%
Sirius Minerals (SXX) 32.75p -3.90%
Convatec Group (CTEC) 228.40p -2.31%
RHI Magnesita N.V. (DI) (RHIM) 5,240.00p -2.06%
Spire Healthcare Group (SPI) 225.00p -1.92%
Sanne Group (SNN) 623.00p -1.74%
Superdry (SDRY) 1,229.00p -1.68%
Bakkavor Group (BAKK) 185.00p -1.60%
Aggreko (AGK) 718.00p -1.59%