London midday: Stocks turn lower, sterling falls further amid Brexit woes
London stocks had turned lower by midday on Tuesday, while sterling slumped further on reports the head of the UK government’s legal department has quit over Prime Minister Boris Johnson’s plans to rewrite the EU withdrawal agreement.
The FTSE 100 was down 0.3% at 5,959.21, while the pound slid 1% against the dollar to 1.3033.
Neil Wilson, chief market analyst at Markets.com, noted that GBPUSD dropped sharply to hit its lowest since August 25th, extending losses after a weak open to test support under 1.3060.
"Whilst we should caution that this indicates disharmony, it is also possibly an overreaction by the market to a negative headline, and does not necessarily make a deal with the EU less likely than it was before," he said.
"Nonetheless it highlights the brinkmanship pursued by Johnson’s government in the talks - even suggesting that Britain could unilaterally rewrite the withdrawal agreement has raised the EU’s hackles and clearly raises the stakes as the two sides commence the 8th round of official talks today. Expect more negative headlines, more risk and more volatility. A positive surprise seems increasingly unlikely, but for this reason would be all the more dramatic should it emerge and produce a sharp reversal for GBP."
In equity markets, worries about a hard Brexit dented the housebuilding sector, with Persimmon, Barratt Developments, Taylor Wimpey, Berkeley, Crest Nicholson and Bellway all lower.
Builders’ merchant Travis Perkins fell sharply after saying it swung to a first-half loss as revenue declined due to the Covid crisis.
On the upside, JD Sports Fashion was sitting pretty at the top of the FTSE 100 as it forecast annual pre-tax profits of at least £265m, scrapped its interim dividend and reported a slump in half-year earnings.
Packaging company DS Smith was in the black after saying it will pay an interim dividend as trading has improved.
Credit-checking firm Experian gained as it lifted its second-quarter expectations following stronger trading in July and August.
Royal Mail was up after a well-received update on trading for the first five months of the 2020-21 financial year.
Market Movers
FTSE 100 (UKX) 5,921.36 -0.27%
FTSE 250 (MCX) 17,486.60 -0.88%
techMARK (TASX) 3,797.24 -0.07%
FTSE 100 - Risers
JD Sports Fashion (JD.) 773.00p 6.68%
Smith (DS) (SMDS) 291.10p 6.67%
RSA Insurance Group (RSA) 453.90p 2.95%
Aviva (AV.) 285.10p 2.55%
Experian (EXPN) 2,862.00p 2.25%
Ashtead Group (AHT) 2,744.00p 1.89%
Smurfit Kappa Group (SKG) 2,812.00p 1.74%
BT Group (BT.A) 105.25p 1.69%
Hargreaves Lansdown (HL.) 1,623.50p 1.47%
Standard Life Aberdeen (SLA) 235.20p 1.38%
FTSE 100 - Fallers
Persimmon (PSN) 2,439.00p -4.91%
GVC Holdings (GVC) 789.00p -4.62%
Rolls-Royce Holdings (RR.) 215.30p -4.52%
Whitbread (WTB) 2,436.00p -4.13%
Melrose Industries (MRO) 117.40p -4.01%
Berkeley Group Holdings (The) (BKG) 4,385.00p -3.56%
Barratt Developments (BDEV) 497.10p -3.29%
Taylor Wimpey (TW.) 113.45p -3.16%
Evraz (EVR) 318.90p -2.80%
Polymetal International (POLY) 1,954.50p -2.76%
FTSE 250 - Risers
Royal Mail (RMG) 205.60p 17.75%
Genus (GNS) 3,708.00p 4.22%
TBC Bank Group (TBCG) 947.00p 3.27%
UK Commercial Property Reit Limited (UKCM) 68.20p 2.71%
Oxford Instruments (OXIG) 1,596.00p 2.70%
C&C Group (CCR) 210.00p 2.44%
Shaftesbury (SHB) 540.00p 2.27%
Investec (INVP) 143.30p 2.07%
Sirius Real Estate Ltd. (SRE) 77.00p 1.99%
CLS Holdings (CLI) 217.00p 1.88%
FTSE 250 - Fallers
Cineworld Group (CINE) 54.44p -8.41%
WH Smith (SMWH) 1,153.00p -8.27%
Travis Perkins (TPK) 1,119.50p -8.20%
FirstGroup (FGP) 46.50p -7.83%
SSP Group (SSPG) 254.60p -6.40%
easyJet (EZJ) 590.00p -6.11%
Meggitt (MGGT) 282.20p -5.84%
Crest Nicholson Holdings (CRST) 198.00p -4.90%
AO World (AO.) 177.20p -4.83%
Vistry Group (VTY) 605.50p -4.72%