London midday: Stocks turn higher as Italian markets rebound
London stocks had reversed earlier losses to trade up by midday on Wednesday, taking their cue from a rebound in European markets - Italy in particular - despite ongoing worries about political instability there.
The FTSE 100 was down 0.2% to 7,621.49, while the pound was up 0.2% against the dollar at 1.3277 and down 0.5% versus the euro at 1.1422.
Fiona Cincotta, senior market analyst at City Index, said: "Although Italy’s domestic political strife is still taking pole position in the markets the concerns seem to have eased slightly. The news flow does not particularly merit this but nevertheless the Italian market opened higher this morning, the euro rebounded and even the embattled Italian bonds are responding with lower yields.
"The tensions in Italy have been rising for months as the country hasn’t been able to form a government since an election in March only for things to come to a head this week after the country’s president rejected the nomination of a eurosceptic. Instead he asked former International Monetary Fund official Carlo Cottarelli to form a government but Cottarelli is now considering giving up the mandate, which would pave the way for elections before the end of July."
The euro bounced back from its 2018 to trade up 0.7% against the dollar at 1.1617, but Cincotta said this may prove a short respite as Italy’s domestic drama has reawakened fears over eurozone stability, last seen when Greece was going through its own turmoil.
Meanwhile, traders appeared to be taking US President Trump’s renewed threat to impose $50bn of tariffs on Chinese imports in their stride.
In UK corporate news, following reports a day earlier that the government is planning to sell part of its stake in the bank this week, RBS was in the red as it announced that its chief financial officer and executive director Ewen Stevenson has resigned to take up an opportunity elsewhere.
LondonMetric nudged up after it said full-year EPRA earnings rose 15.9% to £59.1m and net rental income was up 10.8% and TP ICAP slipped after announcing that chairman Rupert Robson plans to retire at the end of December.
On the upside, AstraZeneca was a touch higher despite saying that the Terranova phase 3 trial of its first respiratory biologic treatment, Fasenra, did not meet its primary endpoint of reducing exacerbations in patients who have chronic obstructive pulmonary disease.
FTSE 250 heat treatment provider Bodycote surged as it posted a jump in revenue for the first four months of the year and said it now expects full-year revenue to be higher than previously anticipated, with headline operating profit also seen slightly ahead of current consensus forecast.
Phoenix Group gained as it launched a £950m capital raising to help fund its acquisition of Standard Life Aberdeen's insurance arm, while Essentra rose as it appointed Lily Liu as its new chief financial officer.
In broker note action, Dunelm was cut to ‘neutral’ JPMorgan, while Go-Ahead was downgraded to ‘hold’ at Liberum.
Centamin was upgraded to ‘buy’ at Panmure Gordon and Capital & Counties was lifted to ‘neutral’ Kempen & Co.
Market Movers
FTSE 100 (UKX) 7,651.93 0.25%
FTSE 250 (MCX) 20,794.63 0.23%
techMARK (TASX) 3,532.83 0.29%
FTSE 100 - Risers
Micro Focus International (MCRO) 1,347.94p 1.92%
Royal Dutch Shell 'A' (RDSA) 2,600.50p 1.90%
BP (BP.) 568.40p 1.65%
Royal Dutch Shell 'B' (RDSB) 2,666.81p 1.52%
Morrison (Wm) Supermarkets (MRW) 247.50p 1.19%
CRH (CRH) 2,681.00p 1.17%
BAE Systems (BA.) 641.60p 1.07%
TUI AG Reg Shs (DI) (TUI) 1,730.50p 1.02%
GlaxoSmithKline (GSK) 1,512.40p 0.99%
Sainsbury (J) (SBRY) 318.30p 0.92%
FTSE 100 - Fallers
Royal Bank of Scotland Group (RBS) 277.00p -1.07%
Glencore (GLEN) 366.95p -1.05%
Anglo American (AAL) 1,734.80p -0.97%
London Stock Exchange Group (LSE) 4,445.00p -0.78%
WPP (WPP) 1,225.50p -0.77%
Rolls-Royce Holdings (RR.) 821.20p -0.70%
National Grid (NG.) 874.10p -0.63%
SSE (SSE) 1,366.50p -0.62%
G4S (GFS) 274.50p -0.62%
Diageo (DGE) 2,732.00p -0.60%
FTSE 250 - Risers
Bodycote (BOY) 1,001.00p 8.22%
Thomas Cook Group (TCG) 116.50p 3.28%
Purecircle Limited (DI) (PURE) 343.50p 3.00%
RDI Reit (RDI) 37.85p 2.99%
TBC Bank Group (TBCG) 1,654.00p 2.99%
Tullow Oil (TLW) 244.90p 2.81%
Centamin (DI) (CEY) 124.40p 2.77%
Pets at Home Group (PETS) 126.50p 2.68%
RPC Group (RPC) 778.20p 2.39%
Convatec Group (CTEC) 226.30p 2.35%
FTSE 250 - Fallers
Stobart Group Ltd. (STOB) 222.87p -6.36%
Go-Ahead Group (GOG) 1,755.00p -4.57%
TalkTalk Telecom Group (TALK) 112.40p -3.44%
Dixons Carphone (DC.) 180.40p -2.49%
Bank of Georgia Group (BGEO) 1,820.40p -2.33%
Hikma Pharmaceuticals (HIK) 1,308.00p -1.99%
Card Factory (CARD) 219.20p -1.88%
Ferrexpo (FXPO) 215.90p -1.86%
esure Group (ESUR) 235.60p -1.83%
Vedanta Resources (VED) 711.40p -1.74%