London midday: Markets subdued, but stocks bounce off lows
Fresh concerns about US inflation and the Chinese debt crisis were weighing on market sentiment on Thursday, though the FTSE 100 was trading flat by lunchtime after bouncing off five-week lows in morning trade.
London’s benchmark index was down 0.1% at 7,347 just before the midday mark – reversing earlier losses that sent it to 7,318. Nevertheless, the Footsie still hasn’t closed below this level since 11 July.
Stock futures on Wall Street inching higher ahead of the opening bell, with the S&P 500 set to rebound after falling to a six-week low. US indices dropped on Wednesday after minutes from July’s Federal Open Market Committee meeting hinted at the need for “further tightening of monetary policy” to tackle rising inflation, which they viewed as having “significant upside risks”.
“Reaching the target rate of inflation of 2% is proving a very hard nut to crack,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Policymakers only have the blunt tools of rate hikes to do it, so they risk sending splinters of pain across the wider economy.”
In other news, investors were likely keeping an eye on newsflow from China, after wealth manager giant Zhongzhi Enterprise Group revealed it's experiencing a liquidity crisis and will have to restructure its debt, owing to its heavy exposure to the country's fragile property market.
Zhongrong International Trust also announced that it had missed debt payments, raising fears about further contagion across China’s wider financial sector.
BAE drops after Ball Aerospace buy
BAE Systems was trading lower on the news that it is buying Ball Corporation's aerospace business for $5.55bn in cash. Despite the negative share-price reaction, analysts at Shore Capital said the acquisition “positions BAE in a fast growing segment of the defence market so that it can capitalise on the long term uptick for defence products”.
A bunch of heavyweight stocks were trading ex-dividend, providing some downward pressure on markets, such as Abrdn, Schroders and Anglo American.
Nevertheless, gains by a whole host of financial and mining stocks were protecting the FTSE 100 from bigger losses, with Prudential, Rio Tinto, Standard Chartered and Glencore putting in a decent performance.
Insurers Aviva and Admiral were continuing to rise after impressing the market with their first-half results on Wednesday.
On the second-tier index, Bank of Georgia shares surged 14% after the company reported a 33.5% jump in half-year profits, driven by a sharp rise in net interest income.
Empiric Student Property also jumped after the company raised its full-year guidance following a "very strong" start to the year, in which earnings rose 19%.
FTSE 100 - Risers
Prudential (PRU) 995.00p 1.51%
Rio Tinto (RIO) 4,626.50p 1.48%
Standard Chartered (STAN) 738.00p 1.29%
Glencore (GLEN) 424.30p 1.14%
NATWEST GROUP (NWG) 228.90p 1.10%
Aviva (AV.) 387.40p 1.10%
Smith & Nephew (SN.) 1,084.50p 1.07%
Lloyds Banking Group (LLOY) 42.50p 0.96%
HSBC Holdings (HSBA) 594.30p 0.76%
Shell (SHEL) 2,372.50p 0.66%
FTSE 100 - Fallers
BAE Systems (BA.) 957.40p -4.50%
Abrdn (ABDN) 167.95p -3.45%
Ocado Group (OCDO) 793.80p -2.29%
Berkeley Group Holdings (The) (BKG) 4,094.00p -2.24%
Schroders (SDR) 411.80p -1.91%
Melrose Industries (MRO) 512.00p -1.58%
Kingfisher (KGF) 229.70p -1.50%
3i Group (III) 1,911.00p -1.49%
Hiscox Limited (DI) (HSX) 1,021.00p -1.35%
Halma (HLMA) 2,075.00p -1.33%
FTSE 250 - Risers
Bank of Georgia Group (BGEO) 3,670.00p 14.33%
Empiric Student Property (ESP) 90.00p 5.14%
Lancashire Holdings Limited (LRE) 578.50p 1.67%
Balfour Beatty (BBY) 314.80p 1.55%
Wood Group (John) (WG.) 157.10p 1.22%
JPMorgan Indian Investment Trust (JII) 836.00p 1.21%
HGCapital Trust (HGT) 391.50p 1.16%
Marshalls (MSLH) 260.20p 1.01%
Capita (CPI) 19.34p 0.99%
Twentyfour Income Fund Limited Ord Red (TFIF) 99.50p 0.91%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 177.40p -4.11%
Investec (INVP) 445.50p -3.88%
NextEnergy Solar Fund Limited Red (NESF) 88.25p -3.76%
TI Fluid Systems (TIFS) 129.20p -3.58%
4Imprint Group (FOUR) 4,930.00p -2.95%
Future (FUTR) 764.00p -2.68%
Rotork (ROR) 285.40p -2.66%
Chemring Group (CHG) 285.50p -2.56%
Big Yellow Group (BYG) 1,032.00p -2.55%
Auction Technology Group (ATG) 702.00p -2.50%