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London close: Stocks end off highs as Theresa May's fate hangs in the balance

By Michele Maatouk

Date: Wednesday 22 May 2019

London close: Stocks end off highs as Theresa May's fate hangs in the balance

(Sharecast News) - London stocks ended just in the green on Wednesday, off earlier highs as sterling remained under pressure and below $1.27 amid growing calls for Prime Minister Theresa May to resign.
The FTSE 100 closed up 0.1% at 7,334.19, while the pound was down 0.2% against the dollar and the euro at 1.2675 and 1.1360, respectively.

Neil Wilson, chief market analyst at Markets.com, said: "Newswires are flashing with a slew of reports suggesting the PM is about to be ousted. It seems the cabinet has now had enough and if they don't move now Theresa May will be safe for a while longer. The pressure on the PM is intense and it's hard to see how she can survive. We should caution though that she is the master of clinging on no matter what.

"For the market this opens up the prospect of more uncertainty, the potential of a Brexiter PM, a General Election and perhaps a second referendum. In other words it just makes things even more chaotic. However, we should caution that a sell the rumour, buy the fact trade may well be at work - as soon as things become clearer sterling is ripe for a bounce - the more it's sold the riper it becomes as the trade looks increasingly crowded."

Wilson said Cable is eyeing a return to the 1.25 handle "with bid just simply not coming forward".

"GBPUSD slipped to 1.26233 before finding some semblance of support. As previously stated, daily momentum indicators suggest the pound is looking a touch oversold, but that does not mean it can't keep falling."

With Brexit news hogging the limelight, the latest inflation 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 higher.

IG Group was a big gainer 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 advanced 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, housebuilders Persimmon, Barratt Developments, Berkeley and Taylor Wimpey were down in the dumps amid growing concerns about Brexit.

Marks & Spencer slumped 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) 7,334.19 0.07%
FTSE 250 (MCX) 19,326.39 -0.57%
techMARK (TASX) 3,544.90 0.52%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 2,319.00p 6.13%
Smith (DS) (SMDS) 333.30p 3.83%
Hikma Pharmaceuticals (HIK) 1,753.00p 3.67%
Mondi (MNDI) 1,713.50p 3.13%
Coca-Cola HBC AG (CDI) (CCH) 2,855.00p 3.11%
Intertek Group (ITRK) 5,204.00p 2.97%
InterContinental Hotels Group (IHG) 5,159.00p 2.73%
Bunzl (BNZL) 2,143.00p 2.63%
Pearson (PSON) 805.60p 2.60%
Sage Group (SGE) 772.00p 2.50%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 248.40p -8.41%
Persimmon (PSN) 1,984.00p -5.88%
easyJet (EZJ) 927.20p -5.83%
Berkeley Group Holdings (The) (BKG) 3,546.00p -4.60%
Hargreaves Lansdown (HL.) 2,292.00p -4.46%
Taylor Wimpey (TW.) 168.30p -4.29%
Barratt Developments (BDEV) 571.40p -4.29%
Sainsbury (J) (SBRY) 198.85p -3.98%
Antofagasta (ANTO) 813.00p -3.92%
International Consolidated Airlines Group SA (CDI) (IAG) 473.90p -3.91%

FTSE 250 - Risers

Metro Bank (MTRO) 813.00p 15.24%
Pets at Home Group (PETS) 168.50p 13.85%
IG Group Holdings (IGG) 534.20p 12.51%
Plus500 Ltd (DI) (PLUS) 633.80p 6.45%
Intermediate Capital Group (ICP) 1,265.00p 5.68%
Royal Mail (RMG) 222.00p 5.01%
Sophos Group (SOPH) 424.00p 4.72%
Homeserve (HSV) 1,221.69p 4.69%
Convatec Group (CTEC) 142.90p 3.33%
Vivo Energy (VVO) 116.80p 2.82%

FTSE 250 - Fallers

Galliford Try (GFRD) 560.50p -9.45%
Babcock International Group (BAB) 460.00p -9.31%
Just Group (JUST) 58.75p -6.08%
IP Group (IPO) 85.50p -5.42%
Restaurant Group (RTN) 127.40p -5.35%
TalkTalk Telecom Group (TALK) 115.10p -5.11%
Balfour Beatty (BBY) 223.40p -5.02%
Hilton Food Group (HFG) 1,034.00p -4.96%
Stagecoach Group (SGC) 130.20p -4.82%
Sabre Insurance Group (SBRE) 264.50p -4.68%

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