London midday: Stocks turn lower but JD Sports surges

London stocks had turned a little lower by midday on Monday, but the FTSE 100 was on track for its best month in more than 30 years, having rallied 14% so far in November.

The FTSE 100 was down 0.2% at 6,355.42.

Investors were digesting news that China’s manufacturing sector expanded at the fastest rate in more than three years in November, as the country’s economy continued to rebound from the impact of Covid-19.

The services sector also performed strongly, the National Bureau of Statistics reported.

The official monthly purchasing managers' index rose from 51.4 in October to 52.1 in November, the highest reading since September 2017. It also beat most analyst forecasts of around 51.5.

A reading above or below the neutral 50.0 point indicates either growth or contraction, respectively.

Meanwhile, the non-manufacturing PMI rose to 56.4 from 56.2 in October. It was the ninth consecutive month that activity has expanded and the fastest rate of growth since June 2012. It also narrowly missed the consensus, which was looking for an easing, to 56.0.

On home shores, figures from the Bank of England showed mortgage approvals surged to a 13-year high in October, underpinned by pent-up demand and the stamp duty holiday.

According to the BoE’s monthly Money and Credit report, mortgage approvals for house purchase increased to 97,500, the highest since September 2007, against 92,100 in September. The figure was well above consensus, with most analysts looking for around 84,000.

Net mortgage borrowing was £4.3bn, compared to September’s £4.9bn.

The BoE said: "The continued strength in borrowing follows high levels of mortgage approvals for house purchase seen over recent months. Mortgage borrowing troughed at £0.2bn in April but has since recovered and is slightly higher than the average £3.9bn in the six months to February 2020."

Approvals for re-mortgage were broadly unchanged at 32,900.

Brexit was also in focus. Foreign Secretary Dominic Raab said over the weekend that this week will be "very significant". He told the BBC that negotiations between the UK and the EU were down to their final two basic issues and a deal was possible if the EU showed some pragmatism.

Richard Hunter, head of markets at Interactive Investor, said: "Brexit remains centre stage as the outcome of the negotiations is still undecided. Investors are hoping that a last-gasp compromise will prevent the economic pain of a no-deal to both parties, and for the UK this has particular ramifications given the parlous state of the economy both now and post-pandemic - further deterioration of the nation’s finances would be a material blow.

"With very little corporate news this week, the macro issues are likely to come under further focus as we move into the final month of the year. The FTSE 100 has had a much improved November, being lifted by the global tide of improved sentiment especially on vaccine news, and the index has spiked by 14%. Even so, the fact that it remains down by 16% in the year to date gives context to what has been a tumultuous year."

In equity markets, Royal Dutch Shell and BP were both down as oil prices fell. Investors were eyeing a meeting of the Opec+ group of oil producers, who are due to decide on January production plans.

EasyJet flew lower following a Telegraph report the budget airline has called in AlixPartners to assist with cash flow forecasting amid crisis talks with Whitehall officials and banks.

Frasers Group slumped after confirming it had offered a £50m loan to Philip Green's Arcadia retail group, currently on the verge of collapse.

Going the other way, JD Sports surged following reports over the weekend that it is considering backing away from a proposed rescue of beleaguered department store chain Debenhams.

In broker note action, homeware retailer Dunelm was boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Bodycote was knocked lower by a downgrade to ‘underweight’ at JPMorgan.

Market Movers

FTSE 100 (UKX) 6,355.42 -0.19%
FTSE 250 (MCX) 19,470.02 0.04%
techMARK (TASX) 3,959.74 0.10%

FTSE 100 - Risers

JD Sports Fashion (JD.) 780.00p 6.38%
Experian (EXPN) 2,697.00p 4.33%
Spirax-Sarco Engineering (SPX) 11,215.00p 3.36%
Bunzl (BNZL) 2,380.00p 2.76%
Next (NXT) 6,696.00p 2.73%
Rightmove (RMV) 638.80p 2.37%
Auto Trader Group (AUTO) 561.00p 2.33%
Rentokil Initial (RTO) 501.40p 2.16%
Antofagasta (ANTO) 1,263.50p 2.14%
Smith & Nephew (SN.) 1,480.00p 1.89%

FTSE 100 - Fallers

Fresnillo (FRES) 1,049.00p -5.67%
Phoenix Group Holdings (PHNX) 758.60p -3.51%
Compass Group (CPG) 1,375.00p -3.03%
BP (BP.) 255.50p -2.81%
HSBC Holdings (HSBA) 394.60p -2.53%
International Consolidated Airlines Group SA (CDI) (IAG) 157.00p -2.39%
Polymetal International (POLY) 1,551.50p -2.24%
Royal Dutch Shell 'B' (RDSB) 1,278.80p -1.93%
BT Group (BT.A) 119.10p -1.81%
M&G (MNG) 189.95p -1.81%

FTSE 250 - Risers

Hipgnosis Songs Fund Limited C Shs NPV (SONC) 110.50p 5.74%
Dunelm Group (DNLM) 1,241.00p 4.81%
CMC Markets (CMCX) 390.50p 4.41%
Henderson Smaller Companies Inv Trust (HSL) 978.00p 4.38%
Kainos Group (KNOS) 1,248.00p 3.65%
Games Workshop Group (GAW) 9,900.00p 3.34%
Oxford Instruments (OXIG) 1,938.00p 2.98%
Hipgnosis Songs Fund Limited NPV (SONG) 121.50p 2.97%
BlackRock Smaller Companies Trust (BRSC) 1,484.00p 2.63%
Rathbone Brothers (RAT) 1,492.00p 2.61%

FTSE 250 - Fallers

Capita (CPI) 41.89p -5.97%
easyJet (EZJ) 800.80p -4.53%
SSP Group (SSPG) 325.40p -4.29%
Mitchells & Butlers (MAB) 213.50p -4.26%
Airtel Africa (AAF) 78.00p -3.94%
Ninety One (N91) 217.20p -3.72%
Avon Rubber (AVON) 4,325.00p -3.67%
WH Smith (SMWH) 1,407.00p -3.56%
Apax Global Alpha Limited (APAX) 181.60p -3.09%
Euromoney Institutional Investor (ERM) 1,016.00p -3.05%