London midday: Stocks tread water as sterling rallies

London stocks were treading water by midday on Monday despite strong gains in the mining sector, held back by a stronger pound as investors cheered the prospect of easing coronavirus restrictions.

The FTSE 100 was up just 0.1% at 7,139.63, while the pound was 0.9% firmer against the dollar at 1.4108 - above $1.41 for the first time since February - underpinned by the prospect of restrictions easing, dollar weakness after Friday’s weak payrolls report and the receding threat of a second Scottish referendum. Against the euro, sterling was trading 0.8% higher at 1.1593.

Spreadex analyst Connor Campbell said: "Reports that the UK government is pushing ahead with its lockdown-easing plan - regardless of concerns over the Indian covid-19 variants currently circulating (and, in some areas, surging) - gave the pound a shot in the arm.

"From May 17th up to six people, or two households, will be able to meet indoors, while cinemas, restaurants, pubs and the like will be able to have patrons mix inside.

"This appeared to counter any concerns the currency may have had over the SNP’s renewed push for a referendum on Scottish independence and sent the pound up."

In equity markets, miners were the standout gainers as metals prices rallied, with iron ore and copper hitting fresh record highs. Rio Tinto, BHP, Anglo American, Glencore and Antofagasta all gained.

Greggs surged to the top of the FTSE 250 as it said annual profit could be similar to 2019 and was likely to materially beat board expectations after like-for-like sales returned to growth following the relaxation of Covid-19 restrictions.

Polymer maker Victrex was also in the black as it posted a decline in interim profit as the medical division was a drag on revenue, but declared a dividend.

Berkeley Group was a high riser after JPMorgan upgraded shares of the housebuilder to ‘overweight’ from ‘neutral’ and lifted the price target to 5,400p from 5,100p as it argued that concerns are overplayed.

Lloyds was up following a report over the weekend that it’s in advanced talks to buy Embark Group, a privately owned provider of savings and retirement products, for £400m.

On the downside, airlines were under the cosh, with British Airways owner IAG, easyJet and Wizz all lower amid disappointment that popular destinations such as Spain, France, Italy and Greece were not on the government’s green list.

Broker Liberum said: "The industry’s hope is that additional meaningful destinations make it onto the list in time for the peak season on July and August. However, the extremely cautious approach so far does not bode well."

Analyst Gerald Khoo also pointed to the fact that the list "contains an almost comical number of small territories and islands with few or no direct flights from the UK".

"This includes two with no airports and three more that had no regular scheduled commercial airline service at all pre-pandemic," he said.

Elsewhere, Provident Financial slumped as it said it was pulling out of doorstep lending after more than 100 years as the subprime lender plunged to a £113.5m annual loss.

Market Movers

FTSE 100 (UKX) 7,139.63 0.14%
FTSE 250 (MCX) 22,735.40 -0.18%
techMARK (TASX) 4,353.40 -0.63%

FTSE 100 - Risers

Rio Tinto (RIO) 6,748.00p 3.26%
Fresnillo (FRES) 939.60p 3.14%
Berkeley Group Holdings (The) (BKG) 4,879.00p 2.72%
BHP Group (BHP) 2,397.50p 2.57%
Antofagasta (ANTO) 1,921.50p 2.53%
Evraz (EVR) 705.80p 2.41%
Lloyds Banking Group (LLOY) 47.65p 2.35%
Glencore (GLEN) 329.45p 2.08%
British Land Company (BLND) 545.00p 1.72%
Barclays (BARC) 184.32p 1.53%

FTSE 100 - Fallers

Scottish Mortgage Inv Trust (SMT) 1,175.00p -3.29%
Whitbread (WTB) 3,224.00p -2.07%
Smiths Group (SMIN) 1,587.00p -2.01%
Entain (ENT) 1,628.00p -1.90%
Renishaw (RSW) 6,110.00p -1.77%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,995.00p -1.63%
Mondi (MNDI) 1,932.00p -1.63%
Intertek Group (ITRK) 6,092.00p -1.58%
Flutter Entertainment (CDI) (FLTR) 14,395.00p -1.57%
International Consolidated Airlines Group SA (CDI) (IAG) 209.85p -1.57%

FTSE 250 - Risers

Greggs (GRG) 2,663.00p 13.56%
Victrex plc (VCT) 2,570.00p 8.71%
Safestore Holdings (SAFE) 937.50p 7.76%
Big Yellow Group (BYG) 1,281.00p 4.06%
Ferrexpo (FXPO) 494.40p 3.13%
Cineworld Group (CINE) 95.40p 3.11%
Centamin (DI) (CEY) 122.65p 3.02%
BlackRock World Mining Trust (BRWM) 695.00p 2.81%
Great Portland Estates (GPOR) 735.50p 2.58%
GCP Student Living (DIGS) 166.20p 2.21%

FTSE 250 - Fallers

Allianz Technology Trust (ATT) 270.00p -4.42%
Baillie Gifford US Growth Trust (USA) 296.00p -3.74%
Wizz Air Holdings (WIZZ) 4,861.00p -3.51%
Provident Financial (PFG) 249.60p -3.33%
easyJet (EZJ) 1,064.50p -2.79%
Meggitt (MGGT) 484.30p -2.77%
Fidelity China Special Situations (FCSS) 406.00p -2.64%
Polar Capital Technology Trust (PCT) 2,202.00p -2.57%
Hill & Smith Holdings (HILS) 1,542.00p -2.28%
Trainline (TRN) 429.00p -2.28%