London midday: Stocks slip ahead of Fed's Powell
London stocks were little changed come midday as investors eyed a key testimony by Federal Reserve chairman Jerome Powell later in the day and digested GDP suggesting that the UK economy may have avoided an outright contraction in the second quarter.
At noon, the FTSE 100 was down 0.09% at 7,529.85 and the FTSE 250 by 0.19% to 19,430.48.
According to the Office of National Statistics, gross domestic product expanded at a 0.3% pace over the three months to May and in the same proportion versus April, which was just as expected.
Nonetheless, commenting on the outlook for the economy on the back of Wednesday's GDP figures, Dr. Howard Archer, chief economic advisor at EY ITEM Club, said: "Should the UK leave the EU without a 'deal' on 31 October, we suspect that GDP growth is likely to come in at just 0.3% in 2020, with the economy likely suffering stagnation or even mild recession over the first half. Growth is seen picking up to 1.1% in 2021.
"If Brexit is delayed again - possibly to March 2020 - extended uncertainty would likely result in modestly lower GDP growth of 1.3% in 2020 rather than the 1.5% that we currently forecast. Much would depend on how long the delay to the UK’s departure was."
Sterling meanwhile was almost exactly flat at 1.24677 against the US dollar, with Spreadex analyst Connor Campbell saying that it continued to find itself "in a bad way, with last night’s televised Tory-off failing to lift the currency’s spirits".
"Cable is trapped at $1.245 for the first time in more than two years, while after a week or so of treading water against the euro, the pound is now at a fresh six-month nadir, barely keeping its head above €1.11."
Powell was set to deliver his much-awaited semiannual Monetary Policy Report to Congress at 1500 BST.
Several listed outfits were being heavily sold on Wednesday, although it wasn't all bad news.
Micro Focus was sharply lower after Citi and Credit Suisse reiterated their 'sell' ratings on the stock.
Recruitment company PageGroup was under the cosh as well, dragging rival Hays down with it as it said it expects full-year operating profit to be towards the lower end of market expectations, with Brexit worries and weaker macro-economic conditions hitting candidate and client confidence.
Superdry was in the red after the fashion brand said it swung to a pre-tax loss of £85.4m in 2019 from a profit of £65.3m the year before as it took a previously-announced non-cash charge of £129.5m relating to onerous leases and other impairments. The company also said it expects revenues to drop in 2020 as the retail environment remains "difficult".
Barratt Developments on the other hand gained as the housebuilder hailed a "record" full-year performance, with pre-tax profit anticipated to come in ahead of market expectations of £884m, at around £910m.
Pub chain Wetherspoons fizzed higher as it posted a 6.9% rise in comparable sales for the 10 weeks to 7 July and a 6.6% jump in total sales.
DIY group Grafton reversed early losses after it said first half group revenue increased by 2.4% to £1.48bn, with like-for-like revenue up 3.9%, but also pointed to signs of weaker UK markets in May and June due to Brexit concerns.
In broker note action, Ashtead was downgraded to ‘equalweight’ at Morgan Stanley, while Boohoo was initiated at ‘buy’ at Societe Generale and Playtech was started at ‘overweight’ by JPMorgan.
Market Movers
FTSE 100 (UKX) 7,532.96 -0.05%
FTSE 250 (MCX) 19,435.47 -0.16%
techMARK (TASX) 3,652.47 -0.59%
FTSE 100 - Risers
Tesco (TSCO) 238.40p 2.05%
International Consolidated Airlines Group SA (CDI) (IAG) 450.60p 1.69%
Just Eat (JE.) 643.40p 1.51%
Hargreaves Lansdown (HL.) 2,006.68p 1.50%
Lloyds Banking Group (LLOY) 58.51p 1.25%
Barclays (BARC) 158.36p 1.23%
Pearson (PSON) 854.80p 1.11%
Scottish Mortgage Inv Trust (SMT) 555.00p 1.09%
Glencore (GLEN) 269.05p 1.07%
Persimmon (PSN) 1,892.00p 1.07%
FTSE 100 - Fallers
Micro Focus International (MCRO) 1,831.20p -7.79%
Fresnillo (FRES) 871.82p -2.09%
Intertek Group (ITRK) 5,484.00p -2.04%
Johnson Matthey (JMAT) 3,249.27p -1.98%
British Land Company (BLND) 541.00p -1.74%
Vodafone Group (VOD) 131.49p -1.74%
WPP (WPP) 963.60p -1.73%
Coca-Cola HBC AG (CDI) (CCH) 2,740.00p -1.51%
Land Securities Group (LAND) 841.00p -1.38%
Burberry Group (BRBY) 1,911.00p -1.32%
FTSE 250 - Risers
Playtech (PTEC) 449.90p 4.14%
Wetherspoon (J.D.) (JDW) 1,461.00p 3.76%
Syncona Limited NPV (SYNC) 219.88p 2.99%
Petrofac Ltd. (PFC) 421.82p 2.88%
Premier Oil (PMO) 77.53p 2.88%
Wood Group (John) (WG.) 492.90p 2.79%
Hunting (HTG) 539.50p 2.57%
IP Group (IPO) 72.80p 2.54%
Pets at Home Group (PETS) 197.30p 2.33%
Dixons Carphone (DC.) 116.65p 2.10%
FTSE 250 - Fallers
Pagegroup (PAGE) 430.80p -14.69%
Hays (HAS) 147.37p -6.07%
Funding Circle Holdings (FCH) 125.60p -5.71%
Polymetal International (POLY) 956.00p -5.53%
Synthomer (SYNT) 360.83p -3.06%
Howden Joinery Group (HWDN) 488.60p -2.98%
TI Fluid Systems (TIFS) 191.20p -2.75%
Intu Properties (INTU) 78.10p -2.69%
Equiniti Group (EQN) 222.80p -2.54%
Renishaw (RSW) 3,738.00p -2.04%