London midday: Homebuilders and Big Oil pace gains
The London stock market's main market gauges have turned mixed, with the the Footsie weighed down by pound strength despite increasing 'market chatter' around the possibility of a 'no deal' Brexit.
Pushing Sterling higher, speaking before a US Congressional panel overnight, US Federal Reserve chief Jerome Powell signalled that interest rate cuts were indeed on the table and, in fact, left some traders wondering if even a 50 basis point reduction might be possible when rate-setters met again at the end of the month.
As of 1217 BST, the FTSE 100 had given up its earlier gains and was dipping by 0.06% to 7,525.02 as the pound added 0.51% versus the US dollar to reach 1.25645, although the second-tier index was ahead by 0.23% and rising to 19,463.57.
Against that backdrop, in presenting the Bank of England's Financial Stability Report on Thursday, Governor Mark Carney noted that the perceived likelihood of a no-deal Brexit had increased since the start of the year.
Analysts in the City echoed Carney's and financial markets' assessment.
Commenting on the gains in homebuilders' shares in the wake of the Barratt Developments's trading update the day before, Chris Beauchamp at IG pointed out how "those investors moving in now will have to be mindful of the potential disruptions arising from a no-deal Brexit. No deal has gone from being unthinkable to a definite possibility."
Just a few hours before, Amber Rudd, the Secretary of State for Work and Pensions, had reportedly dropped her opposition to a 'no deal' Brexit, Beauchamp pointed out.
Carney also said that UK companies had made "real progress" in their preparation for Brexit, although the country could not fully insulate itself from financial spillovers from Europe.
In the UK, the Royal Institute of Chartered Surveyors's house price balance for June jumped from -9.0% for May to -1.0% in June (consensus: -12.0%), returning to its best level since October 2018 and, according to economists, pointing to a year-on-year rate of house price growth of about 2.0%.
Still ahead, US consumer price data for June was set for release at 1330 BST.
There was also a full slate of Fed speakers scheduled for throughout the US session, including Powell himself, who was due to deliver his semiannual monetary policy report again, at 1500 BST, but this time before the Senate Banking Committee.
Homebuilers, Big Oil wanted
Barratt Developments was pacing the advance on the top flight index after analysts at Morgan Stanley bumped up their target price on the homebuilders' shares, following what they termed a "robust" full-year trading update and inexpensive valuation relative to peers, but remained a tad more cautious than the company when looking out to the medium-term.
BP and Royal Dutch Shell were also lending their heft to gains as Brent crude oil futures added to the previous session's sharp rise, following news that Iranian vessels had attempted to block a commercial oil tanker from leaving the Persian Gulf and as a tropical storm barreled towards America's Louisiana coast, reportedly shuttering 30% of oil output in the Gulf as companies evacuated oil rigs near the storm's projected path.
Reckitt Benckiser said it had agreed to pay to $1.4bn to resolve all US federal investigations in connection with the sales and marketing of Suboxone Film by its former prescription pharmaceuticals business Indivior. Indivior had been accused of illegally boosting prescriptions for its opioid addiction treatment by the US Justice Department. The deal was struck with US Department of Justice and Federal Trade Commission. Indivior was demerged from Reckitt in 2014.
Technical products supplier Diploma on Thursday said it had bought the assets and trade of Virginia Sealing Products for £56m. VSP supplies gaskets and fluid sealing products to the industrial maintenance, repair and overhaul market. Further deferred payments up to £8m may be payable in late 2020 subject to achievement of operating profit targets, Diploma said.
Workspace Group reported a “good level” of customer demand in its first quarter on Thursday, with enquiries averaging 1,060 per month, compared to 1,021 a year ago, and lettings standing at 121 per month, up from 88. The FTSE 250 real estate investment trust added two new buildings, in Hoxton and Clerkenwell, and one building extension and refurbishment in Chiswick during the quarter.
FTSE 100 - Risers
Barratt Developments (BDEV) 605.60p 3.66%
Reckitt Benckiser Group (RB.) 6,578.00p 2.33%
Smith (DS) (SMDS) 353.60p 1.43%
Tesco (TSCO) 240.00p 1.22%
Taylor Wimpey (TW.) 160.26p 1.11%
Hargreaves Lansdown (HL.) 2,015.00p 0.93%
Berkeley Group Holdings (The) (BKG) 3,773.00p 0.91%
Centrica (CNA) 88.08p 0.85%
Relx plc (REL) 1,962.50p 0.77%
Melrose Industries (MRO) 178.65p 0.76%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,164.50p -4.16%
Just Eat (JE.) 627.60p -2.12%
TUI AG Reg Shs (DI) (TUI) 744.37p -1.77%
British American Tobacco (BATS) 2,897.00p -1.71%
Next (NXT) 5,388.00p -1.46%
Croda International (CRDA) 4,746.00p -1.37%
Halma (HLMA) 1,992.50p -1.31%
Standard Chartered (STAN) 724.60p -1.25%
Marks & Spencer Group (MKS) 205.50p -1.25%
Glencore (GLEN) 266.90p -1.20%
FTSE 250 - Risers
Syncona Limited NPV (SYNC) 228.73p 5.41%
Wood Group (John) (WG.) 510.00p 4.32%
Diploma (DPLM) 1,398.00p 4.17%
NewRiver REIT (NRR) 171.40p 3.63%
Premier Oil (PMO) 81.44p 3.53%
Pantheon International (PIN) 2,300.00p 3.14%
Cobham (COB) 116.15p 3.06%
Meggitt (MGGT) 544.20p 3.03%
TBC Bank Group (TBCG) 1,576.00p 2.74%
TI Fluid Systems (TIFS) 195.40p 2.73%
FTSE 250 - Fallers
Intu Properties (INTU) 75.06p -3.77%
Domino's Pizza Group (DOM) 260.80p -3.51%
Provident Financial (PFG) 388.00p -2.44%
Greggs (GRG) 2,352.00p -2.33%
Energean Oil & Gas (ENOG) 982.00p -2.00%
Daejan Holdings (DJAN) 5,450.00p -1.80%
G4S (GFS) 193.80p -1.80%
Sophos Group (SOPH) 407.70p -1.71%
Amigo Holdings (AMGO) 174.60p -1.58%
Pagegroup (PAGE) 422.40p -1.49%