London midday: Stocks lower as pound hits best levels since July
London equity markets were still in the red by midday on Friday as sterling rallied, with internationally-exposed stocks suffering the brunt of the losses.
The FTSE 100 was down 0.2% at 7,333.06, while the pound traded at its best levels against the dollar and the euro since late July, up 0.9% against the greenback to 1.2451 and 0.6% versus the euro to 1.1220.
Sterling continued to rise even as the Democratic Unionist Party dismissed an earlier report suggesting that it had softened its stance on a Northern Ireland-only backstop. The Times had reported that the DUP was prepared to abide by some European rules after Brexit, saying the party had agreed to "shift its red lines" as part of a deal to replace the backstop.
Neil Wilson, chief market analyst at Markets.com, said: "The pound rallied hard in early trading with GBPUSD breaking north of 1.24. Having cleared resistance at 1.2380, as long as this holds today there is reasonably clear path to 1.2520."
More broadly, investors continued to mull Thursday's European Central Bank announcement and the latest developments in Sino-US trade relations. On the trade front, China's official Xinhua News Agency reported that China's State Council plans to exclude some agricultural products, such as soybeans and pork, from additional tariffs on US goods.
Wilson said messages on trade were mixed and investors should "try to ignore the noise" as a deal is a long way off.
"Trump says he would consider an interim deal - maybe, maybe not, you just don’t know what’s truth amid all the fake news," he said.
As far as the ECB is concerned, Wilson said there was "bit of disappointment" despite "the QE ad infinitum".
"Draghi delivered in many ways but it's just increasingly clear the ECB is out of ammunition. For me Draghi delivered all he could with a last blitz of stimulus in a kind of Butch Cassidy and the Sundance Kid type finale."
In equity markets, companies with international exposure such as Experian, British American Tobacco and Unilever were knocked lower by the pound's strength.
Spirits company Diageo was also weaker after Reuters reported on Thursday that unions were demanding a 5% pay rise for workers set to strike this month in Scotland.
JD Wetherspoon was also a touch lower after boss Tim Martin hit out at "elite Remainers", accusing them of ignoring "the bigger picture" and the benefits of Brexit, as the pub chain posted a 7.4% increase in full-year sales but a 4.5% drop in profit before tax and exceptional item.
On the upside, domestic stocks enjoyed solid gains, with banks RBS, Barclays and Lloyds all higher, while housebuilders Taylor Wimpey, Barratt and Persimmon also rose.
SSE was in the green after agreeing to sell its retail business to OVO Group for £500m, comprising £400m cash and £100m in loan notes.
Education publisher Pearson gained after an upgrade at UBS and Britvic fizzed higher after an upgrade to ‘buy’ at Jefferies.
Market Movers
FTSE 100 (UKX) 7,333.06 -0.16%
FTSE 250 (MCX) 20,062.11 0.50%
techMARK (TASX) 3,821.96 -0.34%
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 207.20p 4.70%
NMC Health (NMC) 2,948.00p 4.69%
ITV (ITV) 125.75p 4.66%
Barclays (BARC) 155.50p 4.57%
Lloyds Banking Group (LLOY) 53.90p 3.78%
Taylor Wimpey (TW.) 162.30p 3.34%
Antofagasta (ANTO) 932.40p 3.26%
Barratt Developments (BDEV) 644.00p 3.21%
Kingfisher (KGF) 208.10p 3.07%
Persimmon (PSN) 2,083.00p 2.66%
FTSE 100 - Fallers
Coca-Cola HBC AG (CDI) (CCH) 2,623.00p -3.14%
Diageo (DGE) 3,275.50p -3.13%
Compass Group (CPG) 1,948.00p -3.08%
Experian (EXPN) 2,450.00p -2.97%
Relx plc (REL) 1,840.50p -2.85%
British American Tobacco (BATS) 2,991.50p -2.65%
Halma (HLMA) 1,959.50p -2.56%
Rentokil Initial (RTO) 433.80p -2.05%
Unilever (ULVR) 4,908.50p -1.89%
Intertek Group (ITRK) 5,340.00p -1.84%
FTSE 250 - Risers
NewRiver REIT (NRR) 194.65p 4.20%
Cairn Energy (CNE) 193.60p 4.14%
Travis Perkins (TPK) 1,386.00p 3.70%
Stagecoach Group (SGC) 136.70p 3.56%
Bovis Homes Group (BVS) 1,086.00p 3.43%
Kaz Minerals (KAZ) 450.97p 3.20%
Cineworld Group (CINE) 240.50p 3.09%
Bakkavor Group (BAKK) 116.80p 3.00%
Crest Nicholson Holdings (CRST) 386.40p 2.88%
Contour Global (GLO) 193.40p 2.87%
FTSE 250 - Fallers
Centamin (DI) (CEY) 120.35p -7.42%
Acacia Mining (ACA) 233.69p -3.43%
Vivo Energy (VVO) 126.40p -3.22%
Woodford Patient Capital Trust (WPCT) 44.00p -2.76%
Clarkson (CKN) 2,230.00p -2.62%
Polymetal International (POLY) 1,144.00p -2.43%
Metro Bank (MTRO) 274.09p -2.11%
SSP Group (SSPG) 664.00p -2.06%
Rank Group (RNK) 178.89p -1.92%
Go-Ahead Group (GOG) 2,002.00p -1.57%