|CATEGORY: MARKET REPORT - MIDDAY
Thu 31 Aug 2017
LONDON (SHARECAST) - (ShareCast News) - London stocks had extended gains by midday, helped along by a weaker pound and a strong showing in the mining sector after better-than-expected Chinese manufacturing data.
The FTSE 100 was up 0.6% to 7,407.64, as the pound was dragged lower by Brexit concerns. The currency was down 0.4% versus the dollar at 1.2878 and 0.2% against the euro at 1.0857.
Chief Brexit negotiator David Davis was due to hold a press conference with the EU's top negotiator, Michel Barnier, in Brussels later on Thursday.
ETX Capital analyst Neil Wilson said: "Barnier and Davis are due to talk later and markets expect more deadlock. The longer the talks seem to go nowhere the worse it gets for sterling. Theresa May's comments on no deal being better than a bad deal, whether accurate, have also rattled investors a touch as it goes against the language we've been hearing over the summer."
Market participants were also digesting comments from Bank of England rate setter Michael Saunders, who explained the thinking behind his recent votes for higher interest rates in a speech in Cardiff. Saunders, an external member of the Bank's Monetary Policy Committee, said "a modest rise" in interest rates is needed to return currently high inflation sustainably back to its 2% target.
Speaking at the Park Plaza Hotel in the Welsh capital, Saunders, who voted in the June and August MPC meetings to lift the bank rate by 25 basis points after voting for unchanged rates at earlier meetings, said the trade-off between above-target inflation and below-potential output had "shifted markedly" in recent quarters.
Mining stocks were among the best performers, with Anglo American, Rio Tinto and Glencore all in the black after China's official manufacturing purchasing managers' index for August printed at 51.7, up a touch from 51.4 in July and above expectations for a nudge down to 51.3. A reading above 50 indicates expansion.
Elsewhere, Restaurant Group surged after it sales deteriorated as the first half of the year wore on, but the Frankie & Benny's and Garfunkel's owner served up a flat dividend as it reported early signs of improvement and broke back into the black. Many analysts had been expecting another profit warning.
Building materials distributor Grafton was in the black after it said interim pre-tax profits rose 18% to £74.1m, but it warned that recent softer trends in the UK economy are likely to be sustained over the remainder of the year.
Recruiter Hays pushed higher as it posted a rise in full-year profit and announced its first special dividend following a solid performance in Europe and a stabilisation in the UK.
Serco was boosted by an upgrade from UBS, but G4S was hit by a downgrade from the same outfit. Provident Financial slipped after Jefferies downgraded its stance on the stock and as it was ejected from the FTSE 100 in the latest quarterly reshuffle.
Ladbrokes reversed earlier gains to trade lower despite reporting a strong start of the year and a 7% jump in first-half operating profit.
Melrose Industries suffered heavy losses after swinging to a profit in the first half of the year but warning that conditions at its Brush unit had worsened, while Jimmy Choo was flat despite reporting a 174% jump in first-half profit.
G4S, Hammerson, St James's Place, Croda, Stagecoach, Auto Trader and Wood Group were all weaker as their stock went ex-dividend.
FTSE 100 (UKX) 7,407.64 0.58%
FTSE 250 (MCX) 19,718.92 0.52%
techMARK (TASX) 3,407.48 0.65%
FTSE 100 - Risers
Anglo American (AAL) 1,403.50p 2.90%
Mediclinic International (MDC) 759.50p 2.22%
Rio Tinto (RIO) 3,756.00p 2.09%
Glencore (GLEN) 363.75p 1.98%
Antofagasta (ANTO) 1,035.00p 1.97%
Hargreaves Lansdown (HL.) 1,388.00p 1.83%
Centrica (CNA) 198.50p 1.53%
Prudential (PRU) 1,816.00p 1.48%
Shire Plc (SHP) 3,801.50p 1.47%
Aviva (AV.) 524.50p 1.45%
FTSE 100 - Fallers
G4S (GFS) 284.00p -3.04%
Provident Financial (PFG) 865.50p -2.97%
Tesco (TSCO) 180.00p -1.32%
Hammerson (HMSO) 558.00p -1.24%
Fresnillo (FRES) 1,606.00p -0.86%
St James's Place (STJ) 1,161.00p -0.77%
Morrison (Wm) Supermarkets (MRW) 243.50p -0.69%
Sainsbury (J) (SBRY) 234.40p -0.59%
Royal Mail (RMG) 388.30p -0.56%
Randgold Resources Ltd. (RRS) 7,870.00p -0.44%
FTSE 250 - Risers
Restaurant Group (RTN) 346.10p 8.80%
Serco Group (SRP) 116.70p 7.46%
TP ICAP (TCAP) 499.10p 7.45%
Evraz (EVR) 336.50p 6.66%
Rank Group (RNK) 231.70p 3.62%
Kaz Minerals (KAZ) 853.00p 3.52%
Millennium & Copthorne Hotels (MLC) 465.60p 3.28%
Electra Private Equity (ELTA) 1,686.00p 3.18%
Daejan Holdings (DJAN) 6,055.00p 2.63%
Wetherspoon (J.D.) (JDW) 1,091.00p 2.54%
FTSE 250 - Fallers
Stagecoach Group (SGC) 164.70p -4.41%
Melrose Industries (MRO) 219.50p -4.27%
Hochschild Mining (HOC) 278.50p -3.00%
Cairn Energy (CNE) 168.90p -2.65%
Polymetal International (POLY) 913.50p -2.35%
Elementis (ELM) 269.00p -2.07%
Wood Group (John) (WG.) 556.00p -1.94%
Ted Baker (TED) 2,462.00p -1.79%
Diploma (DPLM) 1,070.00p -1.74%
Spire Healthcare Group (SPI) 324.10p -1.55%