London midday: Stocks tread water as miners slump; Trump speech eyed
Stocks in London treaded water on Tuesday as investors looked ahead to US President Donald Trump's address to Congress later in the day, with heavily-weighted miners under the cosh as the dollar gained ground.
At midday, the FTSE 100 was up just 0.1% to 7,257.42.
On Monday, US stocks shook off early losses to end higher after Trump said he would make a "big" infrastructure announcement the next day. Market participants are keeping a close eye on what he tells Congress.
IG's Chris Beauchamp said investors were opting to sit on their hands ahead of Trump’s speech.
"For a market that has rallied hard over the past three months, the speech is a potential ‘make or break’ moment; a lack of details on infrastructure spending could torpedo sentiment," said Beauchamp.
"Last Friday’s sudden drop in equity markets offers a foretaste of what might happen if the market falls out of love with the Donald. A higher US dollar, talked up by Fed officials last night, is proving once again to be a major difficulty for miners, as commodity prices fall back."
Randgold Resources, Fresnillo, Rio Tinto, BHP Billiton, Anglo American and Glencore were among the worst performers as a firmer greenback makes dollar-denominated commodities more expensive for holders of other currencies.
Fresnillo was hit despite saying it more than doubled its profits on a surge in revenue due to higher metal prices in 2016.
Go-Ahead Group tumbled after lowering its full-year expectations for the bus and rail divisions, and reported a drop in first-half pre-tax profit as operating profit from the rail division slumped due to Southern Rail strikes.
Moneysupermarket was also in the red. Although the price-comparison website said profit for the year to the end of December grew, and it announced a £40m share buyback, it was hit by a downgrade from Credit Suisse. In addition, traders noted that group revenues were currently behind last year, adding that the stock had enjoyed a good run into the results.
On the upside, engineering services company Babcock rose after saying it had traded in line with expectations in the second half of the year and the outlook for the full year remained unchanged.
Engineer GKN advanced after it posted a 12% jump in full-year pre-tax profit as sales rose and the company expressed confidence over its prospects for 2017.
Croda International was a high riser after the specialty chemicals group said full-year pre-tax profit was boosted by the weak pound, rising to £288m from £275m the year before.
Virgin Money was also on the front foot after posting a 33% rose in full-year underlying pre-tax profit.
FTSE 250 engineer Meggitt surged as investors welcomed the hike in its dividend despite a drop in full-year pre-tax profit due to a difficult oil and gas market.
House-builder Taylor Wimpey nudged higher as it said it had made a "very good" start to 2017 and suggested the UK housing market would remain supportive for its bump dividend programme for some time.
Investors were also digesting the latest survey from GfK, which showed UK consumer confidence dropped in February. GfK's monthly consumer sentiment index nudged down to -6 from -5 in January, in line with expectations.
Later in the day, the focus will be on Fed officials, with speeches due from St Louis Fed President James Bullard, Philadelphia Fed President Patrick Harker and San Francisco Fed President John Williams.
On Monday, the odds of the Fed hiking interest rates next month rose to more than 50% from 44% after Dallas Fed President Rob Kaplan explained that when he had said in the past that a rate hike could come sooner rather than later, this meant "in the near future".
Market Movers
FTSE 100 (UKX) 7,257.42 0.06%
FTSE 250 (MCX) 18,761.41 0.48%
techMARK (TASX) 3,401.96 0.94%
FTSE 100 - Risers
GKN (GKN) 364.40p 6.24%
Babcock International Group (BAB) 925.00p 4.52%
Pearson (PSON) 684.00p 3.71%
Marks & Spencer Group (MKS) 336.60p 2.31%
Hikma Pharmaceuticals (HIK) 2,158.00p 2.27%
Dixons Carphone (DC.) 303.40p 2.02%
International Consolidated Airlines Group SA (CDI) (IAG) 534.50p 2.00%
Royal Bank of Scotland Group (RBS) 238.00p 1.97%
BAE Systems (BA.) 629.50p 1.86%
Croda International (CRDA) 3,400.00p 1.64%
FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 7,445.00p -2.42%
St James's Place (STJ) 1,062.00p -2.39%
Fresnillo (FRES) 1,462.00p -1.62%
BHP Billiton (BLT) 1,305.00p -1.55%
Rio Tinto (RIO) 3,292.50p -1.44%
Old Mutual (OML) 217.70p -0.91%
Anglo American (AAL) 1,258.50p -0.79%
Glencore (GLEN) 323.60p -0.64%
London Stock Exchange Group (LSE) 3,071.00p -0.61%
CRH (CRH) 2,730.00p -0.51%
FTSE 250 - Risers
Meggitt (MGGT) 468.80p 12.67%
Bodycote (BOY) 762.00p 6.87%
Ultra Electronics Holdings (ULE) 1,959.00p 3.76%
Restaurant Group (RTN) 331.30p 2.82%
Senior (SNR) 180.60p 2.73%
Hays (HAS) 162.10p 2.66%
Derwent London (DLN) 2,786.00p 2.62%
Inmarsat (ISAT) 717.00p 2.58%
Cobham (COB) 120.70p 2.29%
Aberdeen Asset Management (ADN) 276.10p 2.26%
FTSE 250 - Fallers
Go-Ahead Group (GOG) 1,966.00p -13.96%
Moneysupermarket.com Group (MONY) 330.20p -5.93%
ZPG Plc (ZPG) 373.70p -4.57%
Evraz (EVR) 225.00p -3.93%
Ascential (ASCL) 284.90p -3.68%
Polymetal International (POLY) 950.50p -3.36%
Hochschild Mining (HOC) 262.60p -3.10%
Greggs (GRG) 983.50p -2.72%
Ferrexpo (FXPO) 158.10p -2.35%
Auto Trader Group (AUTO) 393.20p -2.19%