London midday: Stocks hold on to modest gains; Inmarsat crashes back to earth
London stocks were still in the green by midday on Tuesday following heavy losses in the previous session, but gains were fairly modest as trade war worries continued to weigh on investors' minds.
The FTSE 100 was up 0.3% to 7,533.63, after suffering its worst day of losses since February on Monday amid escalating tensions between the US and China. The pound was flat versus the euro at 1.1345 and o.3% lower against the dollar at 1.3238.
Chris Beauchamp, chief market analyst at IG, said: "We have seen some tentative buying across indices this morning, an almost inevitable development after Monday’s drop, but the gains do little to dent the heavy losses suffered yesterday. The question, as ever on such mornings as this, is whether we have further to go before equities find a bottom.
"At first glance, it looks like an open-and-shut case; breadth across European and US markets remains weak, with a high number of stocks hitting new one-month lows. But with trade war rhetoric still in abundance, it might be too early to sound the all-clear. The parallels with the summer of 2015 are becoming more obvious too - then it was a slowdown in China and heavy losses for Chinese markets that prompted a prolonged period of volatility and losses for markets on this side of the globe. The talk of trade wars certainly raises the risk of a re-run of that volatility."
On the data front, figures released earlier by UK Finance showed that mortgage lending rose in May as approvals for house purchases fell as economic activity remained subdued but borrowers sought to remortgage on cheaper deals.
Gross mortgage lending increased 8.8% to £22.2bn from a year earlier, with approvals at the big high street banks up 3% from a month earlier. The increase was driven by remortgaging, which rose 18% from May 2017 as borrowers took up cheap deals with interest rate rises looking likely. Loans for people buying houses fell 3.8% in a stagnating property market.
Total consumer credit, which includes credit cards, personal loans and overdrafts, grew 3.9% from a year earlier, the slowest rate since January 2015.
In corporate news, cruise operator Carnival was the standout gainer, bouncing back from a sharp sell-off on Monday when it trimmed its full-year earnings outlook due to higher fuel prices and a strong US dollar.
Sainsbury's shares were down as industry data from Kantar Worldpanel showed sales lagging well behind its rivals, down 0.2% in the past 12 weeks. Morrisons, where sales grew 1.9%, was the only one to see its shares not in the red, while Tesco's sales were up 1.4%. Ocado's sales grew 10.1%.
BHP Billiton rose after saying that its Samarco joint venture has agreed to extinguish a 20bn reais (£4bn) deal with Brazilian authorities relating to the bursting of a tailings dam that killed 19 people in the Minais Gerais region in 2015.
AstraZeneca ticked higher as it announced a series of board committee changes including appointing Nazneen Rahman as the chair of the drug company’s science committee.
Anglo American advanced after saying that the value of rough diamond sales at De Beers rose to $575min the fifth cycle of this year from $554m in the fourth and $541m in the fifth cycle of 2017.
Equipment rental firm Ashtead also pushed up after saying it has hired former Sage Group chief executive Paul Walker to succeed Chris Cole as chairman.
Polymetal edged up as it said it has started up its new Kyzyl mine in Kazakhstan ahead of schedule and below budget, while brick maker Ibstock gained after agreeing to sell a former quarry near Bristol for £9.3m in cash.
On the downside, Inmarsat crashed back down to earth a day after rocketing on news that Eutelsat was evaluating the possibility of making an offer for the UK satellite operator, as it made a fairly swift U-turn.
Petrofac leaked lower as it said it has taken $1.8bn of new orders since the start of the year, which is slightly more than at this stage last year but that the order backlog of $9.7bn was down from £10.2bn at the end of December and $13bn a year ago.
Outside the FTSE 350, beleaguered flooring retailer Carpetright was trading lower after saying it swung to a full-year statutory pre-tax loss of £70.5m from a profit of £900,000 in 2017.
In broker note action, Royal Mail rallied after an upgrade to ‘sector perform’ from ‘underperform’ at RBC Capital Markets, while Cairn Energy was boosted by an upgrade to ‘buy’ from Bank of America Merrill Lynch.
However, ASOS and Ocado were hit by downgrades at Redburn and Exane, respectively.
Market Movers
FTSE 100 (UKX) 7,533.63 0.32%
FTSE 250 (MCX) 20,786.98 0.06%
techMARK (TASX) 3,478.00 0.08%
FTSE 100 - Risers
Carnival (CCL) 4,383.00p 3.99%
Smith (DS) (SMDS) 523.60p 2.47%
Next (NXT) 6,098.00p 2.28%
London Stock Exchange Group (LSE) 4,469.00p 1.57%
GVC Holdings (GVC) 1,041.00p 1.46%
Burberry Group (BRBY) 2,156.00p 1.41%
Reckitt Benckiser Group (RB.) 6,154.00p 1.25%
CRH (CRH) 2,684.00p 1.13%
United Utilities Group (UU.) 759.00p 1.07%
Centrica (CNA) 159.25p 1.01%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 682.60p -2.18%
Sainsbury (J) (SBRY) 307.70p -1.66%
Compass Group (CPG) 1,590.50p -1.61%
Micro Focus International (MCRO) 1,274.83p -1.41%
Vodafone Group (VOD) 182.04p -1.16%
Tesco (TSCO) 258.30p -1.07%
Ocado Group (OCDO) 1,025.50p -0.92%
Whitbread (WTB) 3,925.00p -0.88%
ITV (ITV) 175.70p -0.73%
Standard Chartered (STAN) 687.90p -0.71%
FTSE 250 - Risers
Cairn Energy (CNE) 252.60p 6.05%
Renishaw (RSW) 5,401.20p 4.27%
Contour Global (GLO) 228.00p 2.70%
Ibstock (IBST) 293.88p 2.47%
Entertainment One Limited (ETO) 370.80p 2.43%
RPC Group (RPC) 718.00p 2.34%
Hikma Pharmaceuticals (HIK) 1,448.00p 2.26%
Sirius Minerals (SXX) 33.00p 2.23%
Energean Oil & Gas (ENOG) 510.00p 2.00%
Spectris (SXS) 2,702.00p 1.96%
FTSE 250 - Fallers
Inmarsat (ISAT) 572.62p -9.42%
Provident Financial (PFG) 604.40p -2.55%
FDM Group (Holdings) (FDM) 998.00p -2.54%
Euromoney Institutional Investor (ERM) 1,352.00p -2.45%
Dixons Carphone (DC.) 195.20p -2.35%
TalkTalk Telecom Group (TALK) 108.70p -2.25%
Thomas Cook Group (TCG) 106.40p -1.94%
Superdry (SDRY) 1,119.00p -1.93%
Rank Group (RNK) 183.60p -1.92%
Petrofac Ltd. (PFC) 526.25p -1.85%