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London midday: Sterling strength weighs on FTSE

By Michele Maatouk

Date: Thursday 05 Dec 2019

London midday: Sterling strength weighs on FTSE

(Sharecast News) - London stocks were still in the red by midday on Thursday, missing out on a broader market rally as sterling strength weighed.
The FTSE 100 was down 0.1% at 7,179.75, off earlier lows but still a touch weaker and underperforming major European indices as sterling gained on expectations of a Tory win at next week's general election.

The pound ticked up 0.1% against the euro to 1.1840, having hit a fresh 31-month high earlier, and was 0.2% higher versus the dollar at 1.3136, trading a seven-month high.

David Cheetham, chief market analyst at XTB, said: "It is quite clear that the markets are looking favourably on the prospects of a Conservative majority, which due to the promise of delivering Brexit will lift some uncertainty at least for the next couple of months.

"While there has been a slight narrowing in the lead enjoyed by the Conservatives over Labour, at present it's looking like there won't be a repeat of the 2017 election where a disastrous Conservative campaign and an inspired Labour one saw a stark change in popular opinion and ultimately delivered a hung parliament."

A firmer pound tends to dent the top-flight index as around 70% of its constituents derive most of their earnings from overseas.

More broadly, trade relations between the US and China remained in focus after Bloomberg reported China's Ministry of Commerce spokesman Gao Feng as saying that Chinese officials are in "close contact" with US counterparts on trade negotiations. He also reiterated that tariffs should be reduced proportionately as part of a phase one deal.

"Ultimately, we'll only know what the true state of play is as we get closer to 15th December and the decision on the implementation of tariffs on the remaining $150bn of Chinese goods," said CMC Markets analyst Michael Hewson.

In equity markets, paper and packaging group DS Smith was down despite posting a 31% jump in first-half profit as it reaped the benefits of a rise in online shopping. Peers Smurfit Kappa and Mondi also retreated.

Travel company TUI was the worst performer after a downgrade at Commerzbank, while Hochschild was hit by a downgrade to 'neutral' from 'buy' at UBS and Stagecoach was knocked lower by a downgrade at Liberum.

IG Group lost ground as the online trading provider said net trading revenue for the first half was set to slip to around £250m from £251m last year, which benefitted from two months of trading prior to the introduction of product intervention measures by the European Securities and Markets Authority.

Clothing retailer Ted Baker fell after the Financial Times reported that the company had appointed AlixPartners to help with a root-and-branch review of its operations following three profit warnings.

Investment platform AJ Bell was on the back foot even as it reported record pre-tax profit in its first set of results as a listed company.

Next, Mediclinic, Royal Mail, Britvic and Homeserve were all down as their stock went ex-dividend.

On the upside, luxury fashion brand Burberry was sitting pretty at the top of the FTSE 100 as shares of luxury coat maker Moncler surged following a report that France's Kering could be interested in buying the company.

Dunelm surged after the homeware retailer said full-year pre-tax profit was set to be higher than previous expectations.

Aston Martin Lagonda shares rallied following a report that Canadian billionaire Lawrence Stroll - father of Formula 1 driver Lance Stroll - is preparing to make a bid for a major stake in the luxury car maker.

Market Movers

FTSE 100 (UKX) 7,179.75 -0.12%
FTSE 250 (MCX) 20,717.94 0.25%
techMARK (TASX) 4,007.28 0.16%

FTSE 100 - Risers

Burberry Group (BRBY) 2,062.00p 3.72%
NMC Health (NMC) 2,499.00p 2.63%
ITV (ITV) 144.30p 2.30%
Centrica (CNA) 80.72p 2.18%
British Land Company (BLND) 597.60p 2.05%
Morrison (Wm) Supermarkets (MRW) 196.55p 1.95%
Fresnillo (FRES) 555.60p 1.87%
Sainsbury (J) (SBRY) 217.00p 1.69%
Kingfisher (KGF) 207.50p 1.67%
Smith & Nephew (SN.) 1,687.50p 1.60%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 984.60p -2.66%
Smith (DS) (SMDS) 369.50p -2.48%
Evraz (EVR) 348.60p -2.41%
Severn Trent (SVT) 2,206.00p -1.34%
WPP (WPP) 948.20p -1.23%
Reckitt Benckiser Group (RB.) 5,863.00p -1.10%
Vodafone Group (VOD) 144.58p -1.03%
Experian (EXPN) 2,432.00p -1.02%
3i Group (III) 1,052.50p -0.94%
Relx plc (REL) 1,799.00p -0.94%

FTSE 250 - Risers

Dunelm Group (DNLM) 994.50p 19.53%
Aston Martin Lagonda Global Holdings (AML) 563.80p 12.09%
Premier Oil (PMO) 94.12p 4.60%
Plus500 Ltd (DI) (PLUS) 794.20p 3.60%
Hammerson (HMSO) 305.90p 3.48%
Network International Holdings (NETW) 585.00p 2.81%
Bakkavor Group (BAKK) 137.00p 2.70%
Workspace Group (WKP) 1,117.00p 2.67%
TP ICAP (TCAP) 399.40p 2.38%
Hilton Food Group (HFG) 1,012.00p 2.33%

FTSE 250 - Fallers

AJ Bell (AJB) 389.00p -4.66%
Centamin (DI) (CEY) 122.50p -4.15%
Stagecoach Group (SGC) 128.50p -4.10%
IG Group Holdings (IGG) 661.60p -4.00%
Royal Mail (RMG) 213.20p -3.31%
Hochschild Mining (HOC) 159.30p -3.10%
Watches of Switzerland Group (WOSG) 316.40p -2.65%
Kainos Group (KNOS) 606.00p -2.57%
Mediclinic International (MDC) 380.60p -2.39%
Investec (INVP) 428.80p -2.32%


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