London midday: Travel stocks slump amid Turkey woes; Esure rockets on offer

London stocks had fallen a little further into the red by midday on Monday, with travel shares under pressure amid worries about the crisis in Turkey, but Esure rocketed on the back of an offer from Bain Capital.

The FTSE 100 was down 0.4% to 7,633.88, while the pound was down 0.1% against the dollar at 1.2749 and up 0.1% versus the euro at 1.1203.

Measures announced by Turkey’s central bank, including a pledge to provide "all the liquidity the banks need" to ensure stability, did little to assuage investors. Domestic banks will also be able to borrow foreign-exchange deposits from the central bank at a one-month maturity and one-week maturities.

The lira’s plunge continued, however, with the currency hitting a new record low in early Asian trading. The dollar was up almost 8% to TL 6.9362.

David Cheetham, chief market analyst at XTB, said the market seems to be not buying the central bank's efforts just yet.

"Investors will want to see affirmative actions, such as a substantial hiking of interest rates, before they begin to believe that the worst is over, as at the moment the comments seem to be more a case of empty rhetoric," he said.

"Reports last week that several of the country’s largest banks may struggle to continue operating as a going concern if the USDTRY breached the 7.1 level caught immediate attention, and with the pair tagging this region late last night investors will remain on high alert for any additional signs of the crisis deepening further."

Back in the UK, the retail sector was in focus as the latest monthly survey from the British Retail Consortium and Springboard fund revealed UK shoppers continued to desert shopping centres and retail parks last month, though high streets enjoyed a third positive month in a row.

Total UK footfall fell 0.8% in July, the monthly survey from the British Retail Consortium and Springboard found, which was only slightly improved from the prior month’s 0.9% decline and compared with a decrease of in July 2017 of 1.1%.

Britain's high streets saw footfall growth of 0.3%, the third month of consecutive growth, helped by comparison with July 2017 when there was a decline of 2.1%. Shopping centres performed worst, down 3.4% against a weak month last year, while footfall in retail parks declined 0.5% compared to a rise of 1.7% a year ago.

In corporate news, emerging markets-focused asset manager Ashmore declined as Turkey woes spread. Russ Mould, investment director at AJ Bell, said: "Fund management group Ashmore is widely seen as the London-listed bellwether for emerging markets and its shares are unsurprisingly being sold off in the wake of the crisis in Turkey.

"The read-across to Ashmore is fairly straightforward. By selling down its shares, investors are betting that Ashmore could report a big outflow of assets under management when it next updates on trading."

Meanwhile, travel stocks with exposure to Turkey were also lower, with Tui, Thomas Cook and EasyJet all in the red. Wider emerging market jitters knocked Bank of Georgia lower and with South Africa's rand sent further south there were repercussions for the shares of Mediclinic and Old Mutual.

"A weaker currency should be a great for tourists heading to Turkey, but there are fears that economic collapse in Turkey would be far more damaging and more than offset any temporary boon from the weaker lira," said Markets.com analyst Neil Wilson.

Wealth manager Brewin Dolphin slipped as it announced the appointment of Siobhan Boylan - the current chief financial officer of Legal & General Investment - to the board as finance director.

Esure, which is due to report its first-half earnings on Tuesday, rose 30% after the insurer confirming that it has received an unsolicited takeover offer from private equity firm Bain Capital at 280p per share in cash. Non-life peers Hastings, Direct Line and Admiral also advanced.

Shipping services company Clarkson rallied as it posted a drop in interim profits due a tough first quarter and a weaker dollar, but said conditions picked up in the second quarter.

Shire was little changed after partner Shionogi applied to expand the use in Japan of co-developed drug Intuniv to treat adults for attention deficit hyperactivity disorder.

Outside the FTSE 350, Chemring tumbled nearly 22% after warning that a fatal explosion at its Countermeasures facility near Salisbury will reduce underlying operating profit for the year by between £10m and £20m.

Online trading platform Plus500 slid after it reported a surge in first-half earnings as geopolitical events led to higher-than-expected market volatility, but cautioned that the performance was unlikely to be repeated in the second half.

On the broker note front, Meggitt was cut to ‘equalweight’ at Barclays, but BAE was upgraded to ‘overweight’ at Morgan Stanley and Clarkson was lifted to ‘buy’ at Liberum.

Paddy Power was downgraded to ‘sell’ at Citi and Ryanair was cut to ‘reduce’ at AlphaValue.

Market Movers

FTSE 100 (UKX) 7,628.81 -0.50%
FTSE 250 (MCX) 20,579.54 -0.43%
techMARK (TASX) 3,554.80 -0.62%

FTSE 100 - Risers

Direct Line Insurance Group (DLG) 329.70p 2.23%
Admiral Group (ADM) 2,016.00p 1.46%
Burberry Group (BRBY) 2,235.00p 0.72%
BAE Systems (BA.) 630.00p 0.70%
BP (BP.) 559.00p 0.54%
Royal Dutch Shell 'A' (RDSA) 2,543.00p 0.47%
Royal Dutch Shell 'B' (RDSB) 2,581.50p 0.43%
Rio Tinto (RIO) 3,817.00p 0.37%
RSA Insurance Group (RSA) 629.60p 0.25%
Rightmove (RMV) 4,908.00p 0.22%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,515.00p -3.23%
Paddy Power Betfair (PPB) 7,050.00p -2.83%
Kingfisher (KGF) 286.90p -2.45%
Standard Life Aberdeen (SLA) 319.70p -2.20%
Marks & Spencer Group (MKS) 297.10p -1.82%
ITV (ITV) 165.85p -1.78%
Mondi (MNDI) 2,135.00p -1.70%
International Consolidated Airlines Group SA (CDI) (IAG) 667.80p -1.65%
Coca-Cola HBC AG (CDI) (CCH) 2,601.00p -1.63%
Next (NXT) 5,580.00p -1.55%

FTSE 250 - Risers

esure Group (ESUR) 263.60p 29.22%
Clarkson (CKN) 2,845.00p 10.06%
Contour Global (GLO) 252.00p 4.13%
Hastings Group Holdings (HSTG) 260.20p 4.08%
Senior (SNR) 312.80p 2.02%
Hunting (HTG) 783.00p 1.56%
Capita (CPI) 138.75p 1.46%
RHI Magnesita N.V. (DI) (RHIM) 5,035.00p 1.23%
Equiniti Group (EQN) 213.00p 1.19%
Inmarsat (ISAT) 565.14p 1.13%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 1,613.40p -5.66%
Ashmore Group (ASHM) 339.20p -4.99%
Hill & Smith Holdings (HILS) 1,030.00p -4.89%
Intu Properties (INTU) 163.85p -3.59%
Superdry (SDRY) 1,133.29p -3.55%
Mediclinic International (MDC) 472.60p -3.45%
Just Group (JUST) 97.35p -3.23%
TBC Bank Group (TBCG) 1,600.00p -3.03%
Investec (INVP) 506.20p -3.03%
FirstGroup (FGP) 90.70p -2.42%