London midday: Ferguson paces the advance but gains limited amid Sino-US woes
London stocks were still in the green by midday on Thursday but gains were limited amid worries about Sino-US trade relations, with voting for Tory leadership hopefuls set to kick off.
Just before midday, the FTSE 100 was up 0.2% at 7,381.29, while the pound was down 0.1% against the dollar and the euro at 1.2678 and 1.1230, respectively, after MPS rejected an attempt on Wednesday to legislate against a no-deal Brexit.
Conservative Party leadership rivals faced their first party vote later in the day. Neil Wilson, chief market analyst at Markets.com, said: "It’ll sort some the wheat from the chaff but still doesn’t get us to the final two. But there will be implications for who’s going to pick up the votes later on from the candidates that don’t make the first pass.
"Sterling had rallied a touch on (leading candidate) Boris Johnson’s speech - algos in overdrive most likely - before slipping back below $1.27 again as parliament refused to back Labour’s motion to take over business and take no-deal off the table."
More broadly, trade relations between the US and China were in focus again after US President Trump said he had a "feeling" that a deal would get done between the two but then reiterated his threat to impose tariffs on $325bn of Chinese imports if no deal is reached.
Wilson said: "There are precious little signs that we are even close to seeing a deal done at the G-20. Maybe a top-level handshake between Trump and Xi but hard to see much more."
On the data front, the latest survey from the Royal Institution of Chartered Surveyors showed that delaying the UK's departure from the European Union helped steady the country's housing market.
The net balance of surveyors reporting an increase in house prices over the last three months rose to -10 in May from -23 in April, coming in above consensus expectations of -21. Meanwhile, the new buyer enquiries balance recovered to -3 - its highest level since July - from -26 in April.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The picture is fairly uniform across UK regions, with demand only continuing to fall rapidly in the West Midlands. Looking ahead, we expect demand to recover further, as lenders pass on some of the recent fall in funding costs and as the recent improvement in consumers’ confidence feeds through fully."
"The volatile political situation will continue to subdue the market, though we still think the October Brexit deadline will be extended by a further six months, creating further room for house prices to recover modestly."
In commodity markets, oil prices rallied after the US Navy's Bahrain-based Fifth Fleet said it was assisting two tankers in the Gulf of Oman after receiving distress calls from the vessels amid reports of an "attack". Brent crude was 2.9% higher at $61.78 a barrel and West Texas Intermediate was 2.6% firmer at $52.51. Oil prices had fallen to five-month lows overnight on the back of a surprise build in US inventories.
In equity markets, plumbing and heating equipment supplier Ferguson was the standout performer after US fund manager Trian Investors took a 5.89% stake in the company.
DS Smith gained as the packaging group reported better-than-expected full-year profits, with peers Smurfit Kappa and Mondi also higher.
Morrisons was on the rise on news that it and Amazon are expanding their same-day grocery delivery service.
Retirement products specialist Just Group surged after saying it remains committed to delivering capital self-sufficiency by 2022 and will target further cost cuts in its US care business.
On the downside, ex-dividends weighed, with Persimmon, WPP, Pets at Home, Mediclinic, NMC Health, Assura, Cineworld, Electrocomponents, Ferrexpo, Intermediate Capital, Severn Trent and Shaftesbury all in the frame.
Tesco was in the red as it said UK like-for-like sales growth slowed to 0.4% in the 13 weeks to 25 May, from 1.7% in the previous quarter.
Imperial leather maker PZ Cussons was also trading lower as it announced the departure of its chief financial officer and reiterated guidance that annual profits will drop by around £10m from the previous year.
FTSE 100 - Risers
Ferguson (FERG) 5,650.00p 6.40%
Smurfit Kappa Group (SKG) 2,408.00p 5.66%
Smith (DS) (SMDS) 360.20p 4.95%
Mondi (MNDI) 1,751.50p 2.82%
CRH (CRH) 2,545.00p 2.21%
Scottish Mortgage Inv Trust (SMT) 518.71p 1.61%
Morrison (Wm) Supermarkets (MRW) 198.25p 1.54%
NMC Health (NMC) 2,359.00p 1.46%
Hargreaves Lansdown (HL.) 1,891.50p 1.31%
Ashtead Group (AHT) 1,984.00p 1.28%
FTSE 100 - Fallers
Persimmon (PSN) 1,950.00p -4.74%
WPP (WPP) 966.20p -3.52%
Marks & Spencer Group (MKS) 214.00p -2.37%
3i Group (III) 1,054.50p -1.82%
Just Eat (JE.) 611.40p -1.67%
Severn Trent (SVT) 2,042.00p -1.64%
Next (NXT) 5,580.00p -1.17%
Burberry Group (BRBY) 1,753.00p -1.16%
Micro Focus International (MCRO) 1,968.00p -1.11%
Auto Trader Group (AUTO) 585.80p -0.98%
FTSE 250 - Risers
Just Group (JUST) 57.50p 13.97%
Kier Group (KIE) 194.59p 6.91%
Premier Oil (PMO) 72.20p 3.14%
Syncona Limited NPV (SYNC) 239.88p 2.95%
Tullow Oil (TLW) 199.55p 2.49%
Ibstock (IBST) 244.00p 2.01%
Bakkavor Group (BAKK) 124.80p 1.79%
Paragon Banking Group (PAG) 441.60p 1.66%
Acacia Mining (ACA) 172.40p 1.59%
Wood Group (John) (WG.) 396.90p 1.51%
FTSE 250 - Fallers
Contour Global (GLO) 199.00p -6.79%
Card Factory (CARD) 180.50p -5.60%
Greene King (GNK) 618.00p -5.24%
Pets at Home Group (PETS) 172.20p -4.91%
Ted Baker (TED) 914.50p -3.74%
PZ Cussons (PZC) 194.60p -3.66%
Mitchells & Butlers (MAB) 279.11p -3.42%
Stagecoach Group (SGC) 120.60p -3.13%
Cineworld Group (CINE) 276.90p -2.77%
Intermediate Capital Group (ICP) 1,321.00p -2.29%