London midday: Stocks move lower as housebuilders retreat

Mon 20 May 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks had fallen into the red by midday on Monday, led lower by weakness in the housebuilding sector, as worries about Brexit and Sino-US relations weighed on investor sentiment.
The FTSE 100 was down 0.7% at 7,297.65, while the pound was up 0.1% against the dollar at 1.2742 and 0.2% firmer versus the euro at 1.1421.

As far as Brexit is concerned, IG analyst Joshua Mahony said: "For all the talk of a 'bold' new Brexit offer from the Prime Minister, the reports that such a deal would include the Northern Ireland backstop are already leading us to believe she will see yet another failed vote next month.

"There is little reason to believe that a new leader would find any greater success in putting together a more attractive deal with the EU, and thus markets are aware that the change of leadership will ensure a no-deal Brexit is on the table as Farage breathes down their neck."

More broadly, relations between the US and China were in focus again as Infineon Technologies and AMS said they have not stopped shipments to China's Huawei, after it was reported over the weekend that US technology companies have, in order to comply with President Trump's executive order. These include Google, Intel Corp, Qualcomm and Broadcom.

"The latest headlines over the weekend indicate that Trump could be softening his stance slightly after he removed tariffs on Canadian steel and aluminium," said London Capital Group analyst Jasper Lawler. "However, US top tech companies starting to cut off vital Huawei supplies as they comply with the Trump administrations crackdown risks stoking tensions between the US and China further."

In equity markets, housebuilders were the worst performers, with Barratt Developments, Persimmon, Taylor Wimpey and Berkeley Group all lower as the latest survey from Rightmove highlighted weakness in the London market.

According to the survey, house prices rose 0.9% on the month in May compared to a 1.1% increase in April. On the year, prices were 0.1% higher, versus a 0.1% drop the month before.

Rightmove said four out of 11 regions were "bucking the Brexit blues", with Wales, the West and East Midlands and the North West all setting new asking price records for newly-market property.

However, in the capital, just two of the 32 boroughs - Barking and Dagenham and Bexley - saw prices increase.

A trading update from Foxtons added to the downbeat tone as it said revenue in the first quarter declined as Brexit uncertainty continued to dent the London market, which remains "very challenging".

Elsewhere, TUI was the biggest faller on the FTSE 100 as small-cap peer Thomas Cook tumbled again after reports over the weekend that one of its payment intermediaries wants to extend the period for which it retains holidaymakers' payments for trips.

Ryanair slumped as it posted a 29% drop in full-year profit due to falling fares and issued a cautious outlook, dragging EasyJet and International Consolidated Airlines Group down with it.

Madame Tussauds owner Merlin Entertainments fell sharply on the back of a downgrade to 'reduce' at HSBC.

Marks & Spencer was weaker following a report that the retailer is accelerating plans to close stores. According to the Times, M&S is on track to close 100 outlets by the end of 2020, almost two years ahead of schedule.

Going the other way, IT infrastructure provider Softcat gained as it said full-year results will now be slightly ahead of previous expectations.

Market Movers

FTSE 100 (UKX) 7,297.65 -0.69%
FTSE 250 (MCX) 19,364.31 -0.69%
techMARK (TASX) 3,520.84 -0.67%

FTSE 100 - Risers

Evraz (EVR) 574.20p 0.91%
WPP (WPP) 966.00p 0.33%
Intertek Group (ITRK) 5,098.00p 0.24%
Experian (EXPN) 2,305.00p 0.22%
BP (BP.) 556.70p 0.13%
Reckitt Benckiser Group (RB.) 6,260.00p 0.08%
Rio Tinto (RIO) 4,676.00p 0.06%
Rentokil Initial (RTO) 387.20p 0.05%
Imperial Brands (IMB) 2,163.00p 0.05%
Next (NXT) 5,782.00p 0.03%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 798.40p -3.60%
Barratt Developments (BDEV) 594.80p -3.06%
Taylor Wimpey (TW.) 172.29p -2.99%
Persimmon (PSN) 2,057.00p -2.83%
Berkeley Group Holdings (The) (BKG) 3,680.00p -2.65%
Royal Bank of Scotland Group (RBS) 222.35p -2.31%
Scottish Mortgage Inv Trust (SMT) 511.86p -2.13%
Hikma Pharmaceuticals (HIK) 1,703.00p -2.07%
Johnson Matthey (JMAT) 3,127.00p -2.04%
Mondi (MNDI) 1,672.00p -1.91%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 907.10p 4.26%
JPMorgan Indian Investment Trust (JII) 739.00p 3.65%
Hilton Food Group (HFG) 1,070.00p 2.29%
Softcat (SCT) 960.00p 2.13%
Funding Circle Holdings (FCH) 259.50p 1.76%
IP Group (IPO) 90.50p 1.69%
3i Infrastructure (3IN) 283.79p 1.53%
Contour Global (GLO) 203.50p 1.50%
Sophos Group (SOPH) 390.60p 1.45%
Acacia Mining (ACA) 154.10p 1.38%

FTSE 250 - Fallers

Merlin Entertainments (MERL) 350.10p -6.66%
Metro Bank (MTRO) 642.51p -5.10%
Galliford Try (GFRD) 523.55p -4.55%
Indivior (INDV) 46.54p -4.16%
Kier Group (KIE) 309.60p -4.03%
Countryside Properties (CSP) 310.60p -3.96%
Stobart Group Ltd. (STOB) 116.46p -3.43%
Saga (SAGA) 50.10p -3.09%
GVC Holdings (GVC) 607.40p -3.06%
888 Holdings (888) 130.00p -2.84%
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