London midday: TUI bucks trend as Footsie loses ground
London stocks had fallen into the red by midday on Monday amid worries about Sino-US trade relations and signs that the eurozone economy is stalling, although holiday firm TUI bucked the trend after rival Thomas Cook collapsed.
The FTSE 100 was 0.6% lower at 7,302.43, while the pound was down 0.3% against the dollar at 1.2438 and flat versus the euro at 1.1322 ahead of a Supreme Court decision this week - possibly as early as Monday - on whether Prime Minister Boris Johnson acted legally in proroguing Parliament.
Neil Wilson, chief market analyst at Markets.com, said: "If the court finds against Boris Johnson it would be yet another blow, but ultimately it’s hard to see now exactly the effect of recalling MPs for another couple of weeks. The talking shop has had over three years and failed to agree anything."
Investors were also mulling the latest trade developments between the US and China. The US trade Representative's office said on Friday that discussions between deputy negotiators from both sides in Washington had been "productive". However, market participants were left disappointed after Chinese agriculture officials cancelled a planned visit to farms in Montana and Nebraska.
Hussein Sayed, chief market strategist at FXTM, said: "Investors remain unconvinced that a trade deal is about to see the light of day soon, and that’s likely to put a cap on any further gains in risk assets. The longer it takes to strike a deal, the more economic damage will be felt. This would likely lead to more rotation into value stocks rather than momentum or growth ones."
Also weighing on sentiment was the release of weak eurozone data showing that the economy was close to stalling in September as demand for both goods and services fell at the fastest rate in more than six years.
The IHS Markit flash eurozone composite purchasing managers' index - which measures the services and manufacturing sector - fell to 50.4 this month from 51.9 in August. This was the weakest expansion in output across the sectors since June 2013 and came in well below expectations for a reading of 52.0.
In equity markets, High Street retailer Marks and Spencer was weaker as it said chief financial officer Humphrey Singer had decided to leave the company. No departure date had been set and Singer would work with chief executive Steve Rowe to ensure an orderly transition, the company said in a statement.
Sports Direct ticked a touch lower after offering to buy football pitch operator Goals Soccer Centres, in which it already holds a near 19% stake, for £4m.
On the upside, however, TUI was the standout gainer, up nearly 7% as rival Thomas Cook finally went bust after last-minute talks to save the industry giant failed, leaving thousands of holidaymakers stranded around the world and putting 22,000 jobs at risk.
EasyJet and Ryanair were also trading up, while Jet2 owner Dart Group rallied.
David Cheetham, chief market analyst at XTB, said: "The failure to scrape together the requisite £200m owed to creditors means that the Civil Aviation Authority (CAA) will foot the bill estimated to be around £100M to get stranded holidaymakers home.
"A failure for the government to plug this shortfall may seem illogical in the short-term but a rescue package would likely have amounted to little more than delaying the inevitable and simply throwing good money after bad, with the prospect of Thomas Cook having been able to turn this around given the massive debt pile and struggling core business operations extremely faint to say the least."
AstraZeneca ticked up after the pharmaceuticals giant received European Union marketing authorisation for its Qtrilmet diabetes treatment.
FTSE 100 - Risers
TUI AG Reg Shs (DI) (TUI) 898.60p 6.90%
Compass Group (CPG) 2,041.00p 1.85%
Fresnillo (FRES) 729.60p 1.70%
Unilever (ULVR) 4,855.00p 1.25%
GlaxoSmithKline (GSK) 1,689.40p 1.06%
Relx plc (REL) 1,874.00p 0.89%
Diageo (DGE) 3,246.00p 0.74%
National Grid (NG.) 857.40p 0.69%
JD Sports Fashion (JD.) 699.80p 0.69%
AstraZeneca (AZN) 7,211.00p 0.61%
FTSE 100 - Fallers
NMC Health (NMC) 2,708.00p -6.94%
Smiths Group (SMIN) 1,574.50p -3.88%
Micro Focus International (MCRO) 1,129.20p -3.55%
Glencore (GLEN) 247.65p -3.47%
Marks & Spencer Group (MKS) 189.20p -3.40%
RSA Insurance Group (RSA) 521.00p -3.34%
Smurfit Kappa Group (SKG) 2,382.00p -3.09%
Royal Bank of Scotland Group (RBS) 207.10p -3.00%
Lloyds Banking Group (LLOY) 53.88p -2.94%
Mondi (MNDI) 1,543.00p -2.47%
FTSE 250 - Risers
Intu Properties (INTU) 40.50p 4.76%
Centamin (DI) (CEY) 130.95p 4.26%
JPMorgan Indian Investment Trust (JII) 743.00p 3.77%
Metro Bank (MTRO) 296.40p 3.20%
Ted Baker (TED) 968.50p 3.14%
Amigo Holdings (AMGO) 69.90p 2.79%
Hochschild Mining (HOC) 214.53p 1.87%
Dunelm Group (DNLM) 859.50p 1.66%
McCarthy & Stone (MCS) 145.40p 1.39%
Pets at Home Group (PETS) 222.80p 1.36%
FTSE 250 - Fallers
PureTech Health (PRTC) 230.88p -13.20%
Wood Group (John) (WG.) 406.50p -5.77%
Drax Group (DRX) 277.60p -4.87%
Ferrexpo (FXPO) 178.34p -4.53%
Vivo Energy (VVO) 123.80p -4.33%
CYBG (CYBG) 117.90p -4.22%
Aston Martin Lagonda Global Holdings (AML) 592.60p -4.02%
William Hill (WMH) 182.32p -3.99%
Hunting (HTG) 475.80p -3.92%
Weir Group (WEIR) 1,445.00p -3.60%