London midday: Stocks steady as calm prevails after Iran retaliation
Calm prevailed in London equity markets on Wednesday as the FTSE 100 pared earlier losses to trade flat after Iran retaliated against the US for the assassination last week of top Iranian general Qasem Soleimani.
The top-flight index was steady at 7,574.29.
In the early hours of the morning local time, Iran’s Revolutionary Guard carried out a ballistic missile attack on air bases housing US forces in Iraq. It was unclear whether there had been any casualties after more than a dozen missiles launched from Iran struck two air bases in Irbil and Al Asad, west of Baghdad.
The office of Iraqi prime minister Adel Abdul Mahdi issued a statement saying he had been told in advance by Iran that their "response to the assassination of the martyr Qasem Soleimani had begun or would start shortly" and would be limited to US military stationed in Iraq.
Meanwhile, it appeared that tweets from Iran's foreign minister Javad Zarif and US President Donald Trump were helping to alleviate concerns.
Zarif described the retaliation measures as self-defence and proportionate in size relative to the US assassination of Soleiman and said: "We do not seek escalation or war but will defend ourselves against aggression."
Trump tweeted "all is well", adding: "Assessment of casualties & damages taking place now. So far, so good!"
London Capital Group analyst Jasper Lawler said: "If Iran has concluded its response to the killing of their General and the US decides no response to the attack on its base is needed because there have been no casualties, then we could be near the end of this episode in Middle Eastern geopolitics.
"Our initial conclusion is that the risk of an imminent regional war has diminished after these attacks. Once the situation has de-escalated, markets can look the other way."
Trump is expected to make a statement later in the day about the situation with Iran.
West Texas Intermediate was up 0.4% at $62.95 a barrel, having risen to $65.60 in the aftermath of the attack, while Brent crude was 0.8% higher at $68.81, having breached the $71 mark earlier. Gold prices were also off their highs, having risen earlier to above $1,600 an ounce for the first time in more than six years amid safe haven demand.
Oanda analyst Craig Erlam said the paring of the vast majority of the gains made by safe havens in the aftermath of the attacks was likely "aided by the fact that no casualties have been reported".
"Perhaps traders view this as a more symbolic retaliation, rather than one intended to harm, which reduces the case for the US to respond with force," he said.
In equity markets, Smiths Group was the best performer after an upgrade at Bank of America Merrill Lynch, while BT advanced after Ofcom outlined plans to overhaul the UK’s broadband network and make fibre available to all.
Miners were also on the rise, with Rio Tinto, BHP Group and Antofagasta all higher.
Anglo American fell, however, after fertiliser maker Sirius Minerals said it was in advanced talks with the FTSE 100 miner about an offer that would value the company at around £386m. Sirius shares surged more than 30%.
TUI was weaker after a downgrade to ‘add’ at AlphaValue and Elementis lost ground after a Jefferies downgrade. Spectris and Rotork were both knocked lower by downgrades at Bank of America Merrill Lynch.
Finablr tanked after the Travelex owner said there would be no "material" financial impact from the software virus that led to the foreign exchange business being taken offline last week. Shares were likely being hit by news that shareholders Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Khaleefa Butti Omair Yousif Ahmed Al Muhairi had sold 40.5m shares, or a stake of 6% through an accelerated bookbuild.
NMC Health was hit by the same news, as Al Qebaisi and Al Muhairi sold off 31.2m shares in the UAE-based healthcare operator. Both placings were carried out by Credit Suisse and Deutsche Bank.
Sainsbury’s lost ground after the supermarket retailer said total retail sales in the third quarter fell 0.7%, with like-for-like sales also down 0.7%.
Bakery chain Greggs was little changed after saying it would pay £7m to employees as it delivered a tasty 13.5% rise in full year sales but warned of cost inflation and comparative headwinds ahead.
Market Movers
FTSE 100 (UKX) 7,574.29 0.01%
FTSE 250 (MCX) 21,674.02 -0.73%
techMARK (TASX) 4,180.07 -0.11%
FTSE 100 - Risers
Smiths Group (SMIN) 1,747.00p 1.57%
British American Tobacco (BATS) 3,458.50p 1.54%
BT Group (BT.A) 194.94p 1.49%
Rio Tinto (RIO) 4,494.00p 1.22%
BHP Group (BHP) 1,805.60p 1.17%
Just Eat (JE.) 878.80p 1.15%
Polymetal International (POLY) 1,220.00p 1.08%
Meggitt (MGGT) 666.20p 1.03%
Antofagasta (ANTO) 931.40p 1.02%
Diageo (DGE) 3,216.50p 1.00%
FTSE 100 - Fallers
NMC Health (NMC) 1,259.50p -15.72%
TUI AG Reg Shs (DI) (TUI) 926.80p -4.65%
Land Securities Group (LAND) 974.60p -1.87%
British Land Company (BLND) 607.60p -1.78%
Kingfisher (KGF) 224.00p -1.75%
Smurfit Kappa Group (SKG) 2,854.00p -1.38%
Melrose Industries (MRO) 235.70p -1.22%
SEGRO (SGRO) 872.80p -1.20%
Evraz (EVR) 388.40p -1.20%
Ocado Group (OCDO) 1,310.00p -1.17%
FTSE 250 - Risers
Sirius Minerals (SXX) 5.54p 35.12%
Galliford Try (GFRD) 139.80p 2.48%
Vivo Energy (VVO) 118.80p 2.06%
Homeserve (HSV) 1,304.00p 1.40%
Ultra Electronics Holdings (ULE) 2,196.00p 1.39%
Ascential (ASCL) 394.80p 1.23%
Avast (AVST) 478.00p 1.19%
QinetiQ Group (QQ.) 361.40p 1.12%
Contour Global (GLO) 198.60p 0.91%
William Hill (WMH) 189.05p 0.91%
FTSE 250 - Fallers
Finablr (FIN) 128.40p -16.89%
Elementis (ELM) 164.70p -7.78%
Aston Martin Lagonda Global Holdings (AML) 406.00p -6.67%
Spirent Communications (SPT) 212.00p -6.40%
Rotork (ROR) 314.00p -6.27%
Premier Oil (PMO) 110.55p -6.11%
Wood Group (John) (WG.) 385.20p -4.58%
Spectris (SXS) 2,799.00p -3.68%
Hammerson (HMSO) 290.70p -3.42%
IP Group (IPO) 68.40p -3.25%