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London midday: Stocks maintain gains amid sterling weakness; M&S under pressure

By Michele Maatouk

Date: Wednesday 22 May 2019

London midday: Stocks maintain gains amid sterling weakness; M&S under pressure

(Sharecast News) - London stocks were still in the green by midday on Wednesday, underpinned by a weaker pound as Prime Minister Theresa May's tweaked Brexit deal looked set for an even bigger defeat than the first three.
The FTSE 100 was up 0.5% at 7,364.95, while the pound was down 03% against the dollar at 1.2670 and 0.4% lower versus the euro at 1.1343.

IG market analyst Joshua Mahony said: "Talk of a potential second referendum provided a brief element of optimism for markets, yet it soon become increasingly evident that this deal will likely fall just like its predecessors.

"May's admission that it is impossible to fulfil everyone's personal form of Brexit is key here, for where she shifted the goalposts to appease some MPs, she similarly alienated those that had provided her their support in the past.

"With calls for a new vote of no confidence highlighting the fightback that is already taking shape, Theresa May seems to have an impossible task as she aims to win over support for the deal. However, with Theresa May leaving, we see the chance of a no-deal Brexit rise, sending the pound lower."

With Brexit news hogging the limelight, the latest inflation figures from the Office for National Statistics had little impact.

Inflation crept above the Bank of England's target in April, pushed upwards by rising energy and transport costs, but remained below consensus forecasts.

The 12-month consumer prices index, which strips out owner-occupiers' housing costs, was 2.1% in April, up from 1.9% in March. Although above the Bank's official 2% inflation target, it was below the Monetary Policy Committee's own forecast for 2.2%. Most economists were also looking for 2.2%.

Including owner-occupiers' housing costs, inflation was 2%, up from 1.8% in March. Core inflation, which strips out volatile components such as energy, was unchanged at 1.8%.

In equity markets, paper and packaging companies were the standout gainers after Mondi told its customers that the prices of recycled containerboard and kraft top liner will be increased by 60 euros a tonne in June-July "driven by continued reduction of stock levels and rising market demand". Mondi, Smurfit Kappa and DS Smith were all enjoying solid gains.

IG Group rose sharply after the online trading platform said it was expecting a drop in full-year net trading revenue and operating profit but outlined plans to drive growth. Peers Plus500 and CMC Markets were also trading up.

Pets at Home was a high riser after it posted a 6% jump in underlying full-year pre-tax profit and a 6.9% increase in revenue.

Royal Mail was in the green as its full-year results were in line with consensus and the lower end of the guidance range, both of which were cut after the company's profit warning in October.

On the downside, Marks & Spencer was in the red as it announced a discounted rights issue and said annual profit fell almost 10% as underlying revenue declined across the retail chain's food and clothing and home divisions.

Babcock shares tumbled after the company said operating profit and revenue for the financial year ahead were set to drop, partly due to contract step-downs.

Market Movers

FTSE 100 (UKX) 7,364.95 0.49%
FTSE 250 (MCX) 19,502.43 0.34%
techMARK (TASX) 3,544.52 0.50%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 2,300.00p 5.08%
Mondi (MNDI) 1,744.00p 4.88%
Hikma Pharmaceuticals (HIK) 1,742.00p 3.02%
Coca-Cola HBC AG (CDI) (CCH) 2,845.00p 2.74%
Smith (DS) (SMDS) 329.50p 2.65%
Micro Focus International (MCRO) 1,991.40p 2.48%
Reckitt Benckiser Group (RB.) 6,415.00p 2.36%
Spirax-Sarco Engineering (SPX) 8,790.00p 2.33%
Pearson (PSON) 802.60p 2.32%
Sage Group (SGE) 770.00p 2.31%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 258.90p -4.46%
easyJet (EZJ) 941.27p -3.98%
Persimmon (PSN) 2,042.00p -2.70%
Hargreaves Lansdown (HL.) 2,335.00p -2.61%
Sainsbury (J) (SBRY) 202.00p -2.46%
Legal & General Group (LGEN) 266.45p -2.06%
Royal Bank of Scotland Group (RBS) 220.60p -2.00%
Barratt Developments (BDEV) 584.60p -1.94%
International Consolidated Airlines Group SA (CDI) (IAG) 483.80p -1.80%
Taylor Wimpey (TW.) 172.40p -1.76%

FTSE 250 - Risers

IG Group Holdings (IGG) 539.51p 13.60%
Pets at Home Group (PETS) 166.20p 12.64%
Metro Bank (MTRO) 761.88p 8.28%
Royal Mail (RMG) 227.80p 7.10%
Intermediate Capital Group (ICP) 1,265.00p 5.85%
Plus500 Ltd (DI) (PLUS) 621.40p 4.37%
Indivior (INDV) 47.98p 3.20%
Stobart Group Ltd. (STOB) 115.60p 3.03%
Sophos Group (SOPH) 415.90p 2.91%
Homeserve (HSV) 1,200.00p 2.66%

FTSE 250 - Fallers

Babcock International Group (BAB) 468.40p -8.05%
Just Group (JUST) 58.98p -5.71%
Acacia Mining (ACA) 152.00p -4.70%
Kier Group (KIE) 310.20p -3.02%
Galliford Try (GFRD) 600.00p -2.83%
Stagecoach Group (SGC) 133.20p -2.63%
888 Holdings (888) 130.04p -2.61%
Restaurant Group (RTN) 131.20p -2.53%
Crest Nicholson Holdings (CRST) 367.80p -2.34%
Capita (CPI) 108.00p -2.31%

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