London midday: Stocks pop higher as sterling eases on mixed Brexit messages
London stocks had popped into the green by midday on Friday as sterling came off its highs amid mixed messages about the progress being made in Brexit negotiations.
The FTSE 100 was up 0.1% at 7,362.12, while the pound was down 0.1% against the dollar at 1.2521 and flat versus the euro at 1.1338. The currency was giving back some gains as chief EU Brexit negotiator Michel Barnier said talks with the UK appear to have gone "backwards" after officials in Brussels received documents from Prime Minister Boris Johnson outlining ideas for a new deal.
Meanwhile, Irish Foreign Minister Simon Coveney told BBC Radio 4 that there was still a "wide gap" between the UK and the EU.
David Cheetham, chief market analyst at XTB, questioned whether the pound had gone "too far, too fast".
"In the space of three weeks the sentiment in the pound seems to have swung pretty wildly with the excessive pessimism when the GBP/USD rate fell below $1.20 giving way to optimism that is bordering on over the top given the Brexit issues that remain," he said.
"While a softening of stance from both sides has been warmly welcomed in the markets, it is worth noting that there’s been no tangible progress and Boris Johnson’s proposed alternatives to the backstop could be described as vague, sketchy and hopeful at best."
Sterling had hit an 11-week high against the greenback earlier after European Commission president Jean-Claude Juncker said that a no-deal Brexit would be "catastrophic" and that he is doing everything he can to get a deal.
In an interview with Sky News on Thursday, Juncker said he was prepared to remove the backstop from a withdrawal agreement as long as "alternative arrangements" are put in place to achieve the main objectives of the backstop.
"I think we can have a deal," he said.
On the trade front, talks between the US and China resumed, with Hu Xijin, editor-in-chief of Chinese state media Global Times, tweeting overnight that China was "not as anxious to reach a deal as the US side thought".
CMC Markets analyst David Madden said: "The update is neither encouraging nor worrying, but it shows that China are keeping their cards close to their chest, as they don’t want to be seen to be very keen to strike a deal.
"In recent weeks the two sides has patched up their relationship a little, which helped stocks, but traders would like to a see additional ground being made on a deal, before committing to further investments."
In equity markets, housebuilders and banks were the biggest gainers, with Persimmon, Taylor Wimpey, Barratt Developments, Crest Nicholson, Bovis Homes, RBS and Lloyds all higher.
RBS was up as it confirmed the appointment of Alison Rose as its new chief executive officer. Rose, who will be the bank's first female CEO, is currently deputy CEO of NatWest Holdings.
Retailer Next advanced, clawing back some losses from the previous session when it slumped on the back of half-year results.
Engineer Smiths Group ticked higher as it posted a jump in full-year profit and revenue, with all divisions apart from the detection business delivering growth.
Going the other way, Rolls-Royce was weaker after it warned airline customers of further disruption as it made changes to its Trent 1000 engine repair programme on the Boeing 787 Dreamliner, while Melrose Industries was knocked lower by a downgrade to 'sell' at Panmure Gordon.
Asset manager Investec fell as it warned on profits at its UK banking business due to Brexit and global trade wars hitting fees and trading income. The company said headline earnings per share were expected to be 15% -18% lower year-on-year.
FTSE 100 - Risers
Persimmon (PSN) 2,113.00p 4.09%
Kingfisher (KGF) 202.70p 4.00%
Royal Bank of Scotland Group (RBS) 215.30p 3.51%
Next (NXT) 6,014.00p 3.33%
Barratt Developments (BDEV) 650.20p 2.94%
Taylor Wimpey (TW.) 165.26p 2.84%
BT Group (BT.A) 181.94p 2.61%
Berkeley Group Holdings (The) (BKG) 4,239.00p 2.59%
ITV (ITV) 129.70p 2.57%
Morrison (Wm) Supermarkets (MRW) 203.30p 2.39%
FTSE 100 - Fallers
Smith (DS) (SMDS) 349.00p -2.70%
Rolls-Royce Holdings (RR.) 788.00p -2.69%
Mondi (MNDI) 1,594.00p -1.82%
BAE Systems (BA.) 575.20p -1.71%
Johnson Matthey (JMAT) 3,108.00p -1.65%
Ashtead Group (AHT) 2,261.00p -1.57%
British American Tobacco (BATS) 2,915.50p -1.55%
Smurfit Kappa Group (SKG) 2,444.00p -1.53%
Ferguson (FERG) 5,964.00p -1.42%
Unilever (ULVR) 4,854.00p -1.34%
FTSE 250 - Risers
Grafton Group Units (GFTU) 754.50p 4.72%
Rank Group (RNK) 185.93p 4.45%
Metro Bank (MTRO) 305.42p 4.45%
CYBG (CYBG) 125.50p 4.45%
Capita (CPI) 148.05p 4.41%
Intu Properties (INTU) 43.72p 4.14%
JPMorgan Indian Investment Trust (JII) 712.00p 3.94%
Bovis Homes Group (BVS) 1,130.00p 3.86%
Crest Nicholson Holdings (CRST) 386.00p 3.76%
Hochschild Mining (HOC) 211.40p 3.32%
FTSE 250 - Fallers
Investec (INVP) 458.40p -6.33%
Provident Financial (PFG) 422.40p -4.33%
PureTech Health (PRTC) 274.00p -3.52%
Sirius Minerals (SXX) 4.28p -3.16%
Contour Global (GLO) 181.20p -3.10%
Barr (A.G.) (BAG) 579.69p -2.25%
Vivo Energy (VVO) 123.00p -1.91%
Cineworld Group (CINE) 235.30p -1.84%
Mediclinic International (MDC) 343.30p -1.80%
Ferrexpo (FXPO) 183.55p -1.48%