London midday: Stocks maintain gains on EU rescue deal
London stocks had maintained gains by midday on Tuesday as investors breathed a sigh of relief after EU leaders agreed on a Covid-19 rescue package.
The FTSE 100 was up 0.5% at 6,295.51.
Neil Wilson, chief market analyst at Markets.com, said: "After four days of uneasy talks, EU leaders agreed to a €750bn rescue package for the bloc which includes €390bn in grants. Although short of the €500bn in grants first proposed, it nevertheless marks a significant moment for the EU.
"The Frugals were brought round (bought off) by increasing their rebates - they can thank Margaret Thatcher for that. The agreement is a classic EU fudge that papers over the schisms but is nonetheless a step forward towards ever closer union, and this time it’s fiscal.
"This has been hailed as Europe’s ‘Hamiltonian moment’ as it involves mutual debt issuance. It’s not quite that - we are not talking about mutualisation of countries existing debts. Nevertheless, it sets an important precedent in securing the idea of fiscal coordination, if not union."
On home shores, the latest figures from the Office for National Statistics showed the government borrowed £35.5bn in June as it looked to counter the economic fallout from the coronavirus pandemic, around five times more than last June and taking total government debt to a record £1.98trn. Still, it was lower than May’s £45.5bn and below consensus expectations of £38bn.
Capital Economics said: "The smaller rise in public sector borrowing in June compared to May suggests that government support is starting to wind down as the economy reopens.
"However, government borrowing is still exceptionally high and we suspect that a slowdown in the recovery and further rise in unemployment later this year will prompt the government to announce additional fiscal spending at the next Budget."
In equity markets, British Airways and Iberia parent IAG was a high riser following heavy losses in the previous session, while defence firm Babcock advanced after an upgrade to ‘overweight’ at Barclays.
Trainline shares surged after the company said it has appointed Photobox chief executive Jody Ford to the newly-created role of chief operating officer, with effect from 21 September.
On the downside, miner BHP Group was in the red as it reported a 7% rise in fourth-quarter iron ore output, but warned the resurgence of coronavirus outbreaks threatened the short-term demand outlook for its main commodities.
GVC Holdings was sharply lower after the gambling firm said British tax authorities were now investigating an unidentified part of the group after widening a probe into payment processing for online betting in Turkey.
Capital & Counties was weaker after it said the value of its Covent Garden estate has fallen by 17% as the pandemic took its toll on the company’s tenants, many of whom were forced to close their doors in March.
Market Movers
FTSE 100 (UKX) 6,295.51 0.54%
FTSE 250 (MCX) 17,515.07 0.74%
techMARK (TASX) 3,865.72 0.19%
FTSE 100 - Risers
Rolls-Royce Holdings (RR.) 278.50p 5.17%
International Consolidated Airlines Group SA (CDI) (IAG) 220.90p 4.69%
Standard Chartered (STAN) 460.50p 4.11%
Hargreaves Lansdown (HL.) 1,654.00p 4.09%
Melrose Industries (MRO) 120.70p 3.38%
Barclays (BARC) 120.06p 3.30%
Scottish Mortgage Inv Trust (SMT) 943.50p 3.11%
Sage Group (SGE) 711.20p 3.04%
HSBC Holdings (HSBA) 385.20p 2.91%
Royal Bank of Scotland Group (RBS) 122.75p 2.76%
FTSE 100 - Fallers
GVC Holdings (GVC) 758.60p -13.00%
Persimmon (PSN) 2,525.00p -3.40%
BHP Group (BHP) 1,749.40p -2.70%
Rio Tinto (RIO) 4,848.50p -2.24%
Barratt Developments (BDEV) 537.00p -1.90%
Fresnillo (FRES) 1,078.50p -1.69%
Taylor Wimpey (TW.) 137.80p -1.64%
Avast (AVST) 587.50p -1.51%
Berkeley Group Holdings (The) (BKG) 4,422.00p -1.47%
Mondi (MNDI) 1,497.00p -1.29%
FTSE 250 - Risers
Babcock International Group (BAB) 308.60p 8.17%
Trainline (TRN) 430.00p 7.66%
Virgin Money UK (VMUK) 100.10p 6.56%
Wetherspoon (J.D.) (JDW) 954.00p 5.82%
Energean (ENOG) 589.00p 5.75%
Provident Financial (PFG) 174.50p 5.12%
Close Brothers Group (CBG) 1,187.00p 4.95%
TUI AG Reg Shs (DI) (TUI) 367.20p 4.88%
Cairn Energy (CNE) 136.40p 4.68%
SSP Group (SSPG) 243.60p 4.46%
FTSE 250 - Fallers
Syncona Limited NPV (SYNC) 236.50p -5.96%
Spirent Communications (SPT) 258.50p -4.61%
Vivo Energy (VVO) 75.40p -2.84%
Balfour Beatty (BBY) 254.80p -2.75%
Capital & Counties Properties (CAPC) 140.20p -2.64%
Bodycote (BOY) 606.00p -2.34%
Just Group (JUST) 46.22p -2.28%
Ferrexpo (FXPO) 186.70p -2.25%
Polypipe Group (PLP) 431.00p -2.16%
Jupiter Fund Management (JUP) 245.20p -1.76%