London midday: Stocks up as investors welcome China tariff cuts
London stocks were off earlier but still in the green by midday on Thursday, with sentiment underpinned by China’s plans to cut tariffs on $75bn of US goods.
The FTSE 100 was 0.3% higher at 7,504.35.
The mood was lifted after China said it would halve tariffs on more than 1,717 US products. The cut on levies will be introduced on 14 February, which is the day the US is set to reduce tariffs on $120bn worth of Chinese imports.
CMC Markets analyst David Madden said: "The move by Beijing is a nice way to take the pressure off the Chinese economy in light of the coronavirus situation, plus it’s a great distraction for dealers - it will take their mind off of the deepening health crisis. The reduction in levies from the Chinese side shows they are willing to play ball with the US, and it should help mend the frayed trade relations."
In equity markets, catering company Compass rallied after it said organic revenue for the three months ended 31 December grew 5.3%, driven by strong levels of new business wins and good retention rates, particularly in North America.
NMC Health rose following a report that the company’s founder is looking to buy out his Emirati partners and return to an "active leadership position" at the UAE private healthcare operator. According to the Financial Times, Indian-born entrepreneur BR Shetty is conducting an operational review ahead of formal talks to explore various options with shareholders and regulators.
Insurer Beazley was the best performer on the FTSE 250 after it posted a 250% surge in full-year pre-tax profit as three of its six divisions achieved double-digit growth.
Ashmore pushed higher as the emerging markets wealth manager reported a 28% year-on-year interim rise in assets under management, driven by net inflows and despite a tougher global economic climate.
On the downside, GlaxoSmithKline was weaker again after disappointing full-year results a day earlier.
Royal Mail tumbled as it said recent trading was broadly in line with expectations but company warned that its outlook was challenging. Letter volumes will fall faster than expected next year and the parcels and letters business is more likely to be loss-making, it said.
Neil Wilson, chief market analyst at Markets.com, said: "Royal Mail’s restructuring plans are being derailed by strikes and the company is likely to miss its targets. This should hardly be a big surprise to investors - in November it warned that its transformation programme was behind schedule. Ongoing industrial action threats are a persistent drag on the stock.
"What’s more worrying is that we’ve been waiting for something to happen for a long time now and still it’s the same old story. Parcel volumes up, letters down, GLS doing ok and no change in the culture or management of this ex-monopoly."
Tate & Lyle reversed earlier gains after saying it expected full-year earnings per share growth to be in a range of flat to low single digits on a constant currency basis as it maintained guidance for the full year.
Software company Sage was under the cosh as its stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,504.35 0.29%
FTSE 250 (MCX) 21,568.33 0.22%
techMARK (TASX) 4,135.87 -0.09%
FTSE 100 - Risers
Kingfisher (KGF) 213.50p 2.74%
Barclays (BARC) 177.24p 2.47%
Royal Bank of Scotland Group (RBS) 226.90p 2.39%
Rolls-Royce Holdings (RR.) 703.00p 2.39%
Tesco (TSCO) 254.00p 2.30%
Ashtead Group (AHT) 2,651.00p 2.28%
Vodafone Group (VOD) 150.04p 2.08%
Compass Group (CPG) 1,943.50p 1.94%
Aviva (AV.) 415.10p 1.64%
TUI AG Reg Shs (DI) (TUI) 850.80p 1.60%
FTSE 100 - Fallers
GlaxoSmithKline (GSK) 1,705.00p -1.99%
Flutter Entertainment (FLTR) 8,502.00p -1.71%
Sage Group (SGE) 769.20p -1.21%
Barratt Developments (BDEV) 829.60p -1.17%
Persimmon (PSN) 3,064.00p -1.16%
Smith & Nephew (SN.) 1,859.00p -0.99%
Taylor Wimpey (TW.) 220.50p -0.90%
BP (BP.) 479.95p -0.90%
Smith (DS) (SMDS) 370.70p -0.88%
Smurfit Kappa Group (SKG) 2,876.00p -0.83%
FTSE 250 - Risers
Beazley (BEZ) 580.50p 8.50%
Rank Group (RNK) 307.50p 4.77%
Aston Martin Lagonda Global Holdings (AML) 470.80p 4.07%
Ashmore Group (ASHM) 571.00p 3.25%
Pets at Home Group (PETS) 301.60p 2.72%
Marks & Spencer Group (MKS) 185.40p 2.63%
Hunting (HTG) 327.00p 2.44%
Fresnillo (FRES) 636.80p 2.12%
Hiscox Limited (DI) (HSX) 1,354.00p 1.96%
Playtech (PTEC) 354.20p 1.93%
FTSE 250 - Fallers
Royal Mail (RMG) 174.15p -8.03%
Energean Oil & Gas (ENOG) 725.00p -3.97%
Future (FUTR) 1,142.00p -3.87%
Finablr (FIN) 70.20p -3.44%
PureTech Health (PRTC) 300.00p -2.28%
Tate & Lyle (TATE) 784.00p -2.15%
Redrow (RDW) 795.00p -1.97%
Countryside Properties (CSP) 505.00p -1.56%
FirstGroup (FGP) 123.10p -1.52%
Coats Group (COA) 71.60p -1.45%