|CATEGORY: MARKET REPORT - MIDDAY
Tue 21 May 2019
LONDON (SHARECAST) - (Sharecast News) - London stocks had extended gains by midday on Tuesday, boosted by a weaker pound, as investors welcomed Washington's decision to grant a temporary reprieve from the Huawei ban.
The FTSE 100 was up 0.7% to 7,363.94, while the pound was down 0.2% against the dollar at 1.2698 - falling below $1.27 for the first time since mid-January - and 0.1% lower versus the euro at 1.1386, with Prime Minister Theresa May set for a cabinet showdown as she attempts to get backing for her Brexit agreement.
David Cheetham, chief market analyst at XTB said that with May's Brexit deal unlikely to get through, investors are turning their attention to her replacement.
Her exit paves the way for a "more extreme" outcome, namely no deal or a second referendum, he said.
"What happens next is pretty much anyone's guess but the main concern in the markets remains that the six-month extension from the EU could well be as far as the bloc is willing to go without a clear change of tact from the UK, and as things stand the default outcome in the absence of an extension would be a no-deal Brexit."
More broadly, investors were cheering news that the Trump administration has issued a licence allowing US companies to keep doing business with Huawei over the next three months.
Spreadex analyst Connor Campbell said: "The reason behind this is likely some trademark lack of forethought from the Trump administration, the government failing to anticipate the effect the blacklisting would have on the US side of things. However, it also is a bit of fire control for the bridge currently burning between the two nations, keeping the relationship alive ahead of next month's G20 meeting in Japan."
Investors were choosing to focus on the positives, brushing off the latest warning from the Organisation for Economic Co-operation and Development, which cut its global growth forecast and urged governments to resolve their trade disputes.
Market participants were also mulling the latest survey from the Confederation of British Industry, which showed the total orders balance in the manufacturing sector fell to -10 in May from -5 in April, missing expectations for no change and marking the lowest level since October 2016.
In equity markets, government contractor Galliford Try surged as the construction group said it was cutting 350 jobs at its construction division following a strategic review.
In a trading statement, Galliford said it expected full year results to be in line with its own forecasts, adding that target construction revenues would fall to £1.3bn. The company forecast profit before tax after exceptional items for the year to June 30 of £112.7m - £123.3m based on forecasts at May 20.
UDG Healthcare was on the rise as it announced two acquisitions and lifted its 2019 adjusted earnings per share guidance.
Electrocomponents rallied as it posted a 23.9% jump in full-year profit thanks to "strong" market share gains in EMEA and the Americas.
Severn Trent rose as it reported a 6.8% increase in annual profit but warned over the impact of nationalisation of the industry.
On the downside, Paddy Power Betfair was the biggest faller on the top-flight index as Goldman Sachs said the company's US opportunity was "significant but priced in" and stuck with a 'neutral' rating.
Entertainment One retreated as the Peppa Pig owner said full-year pre-tax profit slumped 43% to £36.8m as it was hit by a one-off charge related to its home entertainment business.
WH Smith was in the red as it announced the departure of chief executive officer Stephen Clarke and reported a 15% rise in third-quarter group sales.
FTSE 100 (UKX) 7,363.94 0.73%
FTSE 250 (MCX) 19,469.39 0.69%
techMARK (TASX) 3,542.89 0.46%
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 2,765.00p 3.48%
Micro Focus International (MCRO) 1,965.80p 3.19%
Sage Group (SGE) 761.00p 3.03%
Antofagasta (ANTO) 849.20p 2.44%
Sainsbury (J) (SBRY) 202.60p 2.43%
United Utilities Group (UU.) 785.20p 2.00%
Standard Life Aberdeen (SLA) 264.70p 1.93%
Melrose Industries (MRO) 178.00p 1.92%
Experian (EXPN) 2,344.00p 1.87%
Standard Chartered (STAN) 689.62p 1.86%
FTSE 100 - Fallers
Paddy Power Betfair (PPB) 5,712.00p -1.75%
International Consolidated Airlines Group SA (CDI) (IAG) 497.40p -1.00%
Land Securities Group (LAND) 862.40p -0.78%
Pearson (PSON) 795.00p -0.70%
easyJet (EZJ) 985.20p -0.48%
Rolls-Royce Holdings (RR.) 937.00p -0.45%
Hikma Pharmaceuticals (HIK) 1,701.50p -0.32%
TUI AG Reg Shs (DI) (TUI) 772.80p -0.28%
WPP (WPP) 950.80p -0.15%
Diageo (DGE) 3,341.00p -0.09%
FTSE 250 - Risers
Galliford Try (GFRD) 600.00p 11.84%
UDG Healthcare Public Limited Company (UDG) 705.00p 7.55%
Saga (SAGA) 52.72p 7.33%
Electrocomponents (ECM) 637.00p 5.01%
Homeserve (HSV) 1,135.00p 3.94%
TI Fluid Systems (TIFS) 191.60p 3.57%
Softcat (SCT) 983.20p 3.55%
Assura (AGR) 62.94p 3.53%
Stagecoach Group (SGC) 138.20p 3.29%
Funding Circle Holdings (FCH) 255.50p 3.23%
FTSE 250 - Fallers
Entertainment One Limited (ETO) 431.02p -6.38%
Royal Mail (RMG) 222.30p -4.55%
Wizz Air Holdings (WIZZ) 3,195.00p -3.53%
Sirius Minerals (SXX) 15.50p -2.52%
Merlin Entertainments (MERL) 342.83p -2.05%
Convatec Group (CTEC) 137.10p -2.04%
Energean Oil & Gas (ENOG) 774.10p -1.76%
Ferrexpo (FXPO) 221.20p -1.60%
Greencore Group (GNC) 219.10p -1.57%
WH Smith (SMWH) 2,000.00p -1.38%