|CATEGORY: MARKET REPORT - MIDDAY
Mon 13 Jan 2020
LONDON (SHARECAST) - (Sharecast News) - London stocks were still in the green by midday on Monday as sterling fell below $1.30 amid growing rate cut expectations and as data showed that the UK economy grew at its weakest rate in seven years in November.
The FTSE 100 was up 0.4% at 7,618.28, while sterling was down 0.7% against the dollar and the euro at 1.2973 and 1.1668, knocked lower after Bank of England policymaker Gertjan Vlieghe echoed recent dovish from Governor Mark Carney, telling the Financial Times over the weekend that he would vote for an interest rate cut later this month if key economic data don't show a recovery in the economy after the general election.
"Personally I think it's been a close call, therefore it doesn't take much data to swing it one way or the other and the next few [MPC] meetings are absolutely live," he told the FT. "I really need to see an imminent and significant improvement in the UK data to justify waiting a little bit longer."
Data released earlier by the Office for National Statistics showed that the UK economy unexpectedly shrank in November, with gross domestic product contracting by 0.3% as industrial and manufacturing production declined 1.2% and 1.7%, respectively. However, in the three months to November, the economy grew 0.1%.
Chris Williamson, chief business economist at IHS Markit, said: "The latest GDP data add to signs that the UK economy stagnated at best in the fourth quarter of last year as heightened political uncertainty, Brexit risks and weaker global demand all colluded to dampen spending by both business and households.
"The good news is that all these headwinds are showing signs of moderating, if not even turning into tail winds, as we move into 2020. However, downside risks remain elevated."
More broadly, all eyes will be on the signing of the 'phase one' trade deal between the US and China, which is due to take place on Wednesday.
Neil Wilson, chief market analyst at Markets.com, said: "With the phase one deal baked in, what markets want to know is how quickly - if at all - the two sides can move things forward to phase two. There's no doubt that building on this deal is going to take a lot more effort and compromise. Of course, phase one could unravel at any moment if either side wants to walk. Enforcement is an issue too."
In equity markets, BAE Systems was the standout gainer on the back of an upgrade at Bank of America Merrill Lynch, while Taylor Wimpey was boosted by upgrades at Merrill and Peel Hunt. Halma was up after an upgrade to 'buy' at Goldman Sachs.
Spirent Communications surged to the top of the FTSE 250 after the telecoms equipment company bumped up its full-year profit guidance.
Savills rallied as it said underlying results for the year to the end of December were set to be at the upper end of the board's expectations following an "excellent" performance in the UK.
Pennon was a high riser following reports that the South West Water owner was preparing to sell off its Viridor waste management business after a bid from US private equity firm KKR.
Ferrexpo rose after the iron ore pellet producer said higher prices helped offset cost increases as it reported a slight fall in annual production.
William Hill was little changed despite saying that adjusted operating profit for 2019 is expected to come in ahead of market and management expectations thanks to favourable sporting results through the year end. It also announced the departure of chief financial officer Ruth Prior.
The sector was likely being hit by news that the Gambling Commission was set to ban bookmakers from taking credit card deposits for betting online, in a bid to protect vulnerable customers. 888 Holdings was under the cosh.
St James's Place and Just Group were hit by downgrades to 'underperform' at Credit Suisse, while Homeserve and Mitchells & Butlers were dented by downgrades to 'neutral' at JPMorgan. Man Group was weaker after a downgrade to 'equalweight' at Barclays.
FTSE 100 (UKX) 7,618.28 0.40%
FTSE 250 (MCX) 21,781.80 1.00%
techMARK (TASX) 4,237.17 1.15%
FTSE 100 - Risers
BAE Systems (BA.) 613.20p 3.44%
Severn Trent (SVT) 2,521.00p 2.52%
Hargreaves Lansdown (HL.) 1,890.50p 2.49%
Intertek Group (ITRK) 5,886.00p 2.37%
Taylor Wimpey (TW.) 202.20p 2.30%
United Utilities Group (UU.) 967.20p 2.13%
Hikma Pharmaceuticals (HIK) 1,942.00p 1.86%
Rightmove (RMV) 648.00p 1.60%
CRH (CRH) 3,033.00p 1.57%
SSE (SSE) 1,446.00p 1.47%
FTSE 100 - Fallers
Just Eat (JE.) 885.20p -1.75%
Lloyds Banking Group (LLOY) 59.48p -1.41%
Associated British Foods (ABF) 2,588.00p -1.26%
Mondi (MNDI) 1,657.00p -1.25%
easyJet (EZJ) 1,482.50p -1.10%
NMC Health (NMC) 1,337.50p -0.89%
Flutter Entertainment (FLTR) 9,320.00p -0.85%
St James's Place (STJ) 1,130.00p -0.79%
Royal Bank of Scotland Group (RBS) 233.60p -0.72%
Smith (DS) (SMDS) 373.10p -0.69%
FTSE 250 - Risers
Spirent Communications (SPT) 237.50p 16.14%
Savills (SVS) 1,234.00p 7.40%
Pennon Group (PNN) 1,073.00p 6.55%
Tullow Oil (TLW) 62.06p 5.19%
Pets at Home Group (PETS) 275.40p 3.92%
Softcat (SCT) 1,196.00p 3.91%
Avast (AVST) 517.00p 3.52%
Plus500 Ltd (DI) (PLUS) 939.40p 3.23%
Ferrexpo (FXPO) 150.05p 3.06%
Aston Martin Lagonda Global Holdings (AML) 483.10p 2.85%
FTSE 250 - Fallers
Just Group (JUST) 78.05p -4.93%
888 Holdings (888) 150.80p -3.15%
Restaurant Group (RTN) 146.10p -2.66%
Mitchells & Butlers (MAB) 422.00p -2.54%
Man Group (EMG) 155.00p -2.21%
Sanne Group (SNN) 634.00p -1.86%
Future (FUTR) 1,400.00p -1.55%
GVC Holdings (GVC) 925.80p -1.41%
Cairn Energy (CNE) 197.70p -1.05%
Sirius Minerals (SXX) 5.30p -0.93%