London midday: Stocks extend gains as pound drops; miners rally
London stocks had pushed further into the green by midday on Thursday, helped along by a weaker pound as investors welcomed a dovish speech by Federal Reserve chief Jerome Powell.
The FTSE 100 was up 0.7% to 7,051.36 as the pound fell 0.5% against the dollar to 1.2757 and 0.4% versus the euro to 1.1237, weighed by downbeat assessments on the UK's post-Brexit growth prospects from both the Chancellor and the Bank of England.
Sterling had briefly ticked up against the dollar on Wednesday after Powell said US interest rates were "just below" neutral levels barely two months after saying rates were "a long way" from neutral, sparking the best session for US equity markets since March and denting the greenback.
Spreadex analyst Connor Campbell said: "Mark Carney’s constant warnings that businesses aren’t ready for Brexit, and a lack of confidence gained from Theresa May’s appearance in front of the Commons Liaison Committee, appear to be responsible for tipping the currency back into the red."
There was some good news for UK banks, though, as the Bank of England stress tests revealed that they are strong enough to survive a disorderly Brexit, even if the BoE saw a potential scenario that this could leave the country worse off than in the 2008 financial crisis. None of the high street lenders were told to raise billions of pounds in capital to strengthen their finances.
Meanwhile, Thursday's figures from the BoE showed that mortgage approvals rose to 67,100 in October from 65,700 the month before, well above the consensus 64,600. However, net consumer credit rose by just £0.9bn in October, below the average of the previous six months of £1.3bn and the consensus of £1.0bn.
In corporate news, Ashtead was the standout gainer on the top-flight index after the equipment rental firm promoted the boss of its US business to the role of chief executive as Geoff Drabble steps down after 12 years in charge.
Miners racked up solid gains as copper prices continued their rally, with Glencore, Antofagasta and BHP Billiton all higher.
Rio Tinto was also higher as bosses gave the green light for investment in its $2.6bn (£2.03bn) Koodaideri iron ore mine in Western Australia.
Unilever rose as it said chief executive Paul Polman will step down from the role at the end of next month and be replaced by the group's beauty & personal care boss, Alan Jope.
RHI Magnesita was the standout gainer on the FTSE 250 as Numis lifted the stock to 'buy' from 'add' following the company's first site visit as a combined business on Wednesday, which it said highlighted operational efficiencies. Berenberg, meanwhile, said it came away from the visit "encouraged" by the high level of engineering, product development and manufacturing automation in the business.
Drinks maker Britvic and pub operator Greene King fizzed higher on the back of full-year and interim results, while Go-Ahead was boosted by a well-received trading update.
On the downside, Intu Properties tumbled more than 30% after a consortium led by its Deputy Chairman John Whittaker pulled its takeover offer for the shopping centre owner citing economic uncertainties. Hammerson, British Land and Land Securities were also in the red.
Russ Mould, investment director at AJ Bell, said: "The company is now left in a difficult position with too much debt, retail assets which would be difficult to sell, and the prospect of losing tenants. On top is the looming departure of chief executive David Fischel.
"A cut to the dividend will help provide some short-term breathing room for the company but more radical action will be required to ensure the long-term viability of the business."
Thomas Cook - which issued a profit warning earlier in the week - fell as the tour operator confirmed it swung to a full-year loss despite rising sales.
In broker note action, British American Tobacco was upgraded to 'sector perform' at RBC Capital Markets, while Cobham was lifted to 'buy' at Berenberg and Senior was cut to 'neutral' JPMorgan.
International Consolidated Airlines, Johnson Matthey, Land Securities, Severn Trent, Bellway, Caledonia Investments, Diploma, Electrocomponents, Euromoney Institutional Investor, Hill & Smith, JD Sports, Renewi, TalkTalk and Telecom Plus were among the companies whose stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,051.36 0.67%
FTSE 250 (MCX) 18,719.07 0.43%
techMARK (TASX) 3,503.02 0.86%
FTSE 100 - Risers
Ashtead Group (AHT) 1,816.15p 5.13%
Antofagasta (ANTO) 846.00p 4.91%
CRH (CRH) 2,229.00p 3.72%
Just Eat (JE.) 608.80p 3.36%
Halma (HLMA) 1,397.00p 3.25%
Wood Group (John) (WG.) 645.80p 2.93%
Randgold Resources Ltd. (RRS) 6,454.00p 2.84%
Scottish Mortgage Inv Trust (SMT) 501.38p 2.80%
InterContinental Hotels Group (IHG) 4,364.00p 2.73%
Ferguson (FERG) 5,037.00p 2.65%
FTSE 100 - Fallers
Land Securities Group (LAND) 840.60p -3.98%
British Land Company (BLND) 592.80p -2.02%
GVC Holdings (GVC) 756.50p -1.63%
Severn Trent (SVT) 1,920.00p -1.54%
Berkeley Group Holdings (The) (BKG) 3,332.00p -1.10%
Sainsbury (J) (SBRY) 314.60p -1.07%
Morrison (Wm) Supermarkets (MRW) 246.30p -0.87%
Smurfit Kappa Group (SKG) 2,146.00p -0.83%
Whitbread (WTB) 4,666.00p -0.79%
Barratt Developments (BDEV) 477.30p -0.77%
FTSE 250 - Risers
RHI Magnesita N.V. (DI) (RHIM) 3,650.00p 7.35%
Go-Ahead Group (GOG) 1,644.00p 6.00%
Britvic (BVIC) 822.04p 5.05%
Mediclinic International (MDC) 365.90p 4.75%
Greene King (GNK) 531.40p 4.69%
Superdry (SDRY) 809.00p 4.66%
Hochschild Mining (HOC) 161.10p 4.34%
AA (AA.) 96.76p 4.04%
Renishaw (RSW) 4,250.00p 3.76%
Dechra Pharmaceuticals (DPH) 2,204.00p 3.28%
FTSE 250 - Fallers
Intu Properties (INTU) 126.33p -34.41%
Senior (SNR) 230.00p -7.26%
Hammerson (HMSO) 399.90p -5.01%
RPC Group (RPC) 712.00p -4.48%
Bellway (BWY) 2,653.00p -3.39%
Paragon Banking Group (PAG) 425.40p -2.61%
Capital & Counties Properties (CAPC) 261.00p -2.10%
Domino's Pizza Group (DOM) 260.60p -2.03%
SIG (SHI) 111.20p -1.94%
Derwent London (DLN) 2,972.00p -1.91%