London midday: Stocks maintain losses as pound rallies; Morrisons bucks trend
London stocks were still in the red by midday on Tuesday as sterling gained ground against the greenback following US President Trump’s latest attack on the Fed.
The FTSE 100 was down 0.2% to 7,578.01, while the pound was 0.3% higher against the dollar at 1.2832 and 0.1% lower versus the euro at 1.1139.
The US dollar weakened overnight after Trump criticised the Federal Reserve again for lifting interest rates. In an interview with Reuters, Trump said the Fed should do "what’s good for the country".
Neil Wilson, chief market analyst at Markets.com, said: "Trump’s not thrilled with the Fed raising rates. At the same time, he accused China and the EU of currency manipulation. Taken together with previous comments we see a clear pattern of the president willing to talk the USD lower whenever it starts to look a bit toppy. Two ways to look at this: one if done enough times it can exert a powerful influence over market expectations. Two, comments like these will produce diminishing returns for the president.
"I think on this one the market will come round again and the dollar bounce back, but nonetheless it does appear the market is worried that the president will exert influence on Fed policy."
Trump also accused Europe and China of manipulating their currencies again. The US President told Reuters that China was doing so to make up for having to pay US tariffs. He also said he does not expect much from the US-China trade talks and has no time frame for ending the dispute.
As far as the UK is concerned, Jeremy Hunt will make his first appearance in the US as foreign secretary on Tuesday. He is due to make a speech at a Q&A in Washington during which he is expected to warn Brussels that a failure to strike a Brexit deal would destabilise the international order and urge President Trump to impose wider sanctions against Russia.
In a keynote speech earlier to business leaders in London, international trade secretary Liam Fox said Britain could become an "exporting superpower" after it leaves the EU, as he announced a new export strategy aimed at increasing the country's total exports to 35% of GDP.
"As we leave the European Union we must set our sights high and that is just what this Export Strategy will help us achieve," he said.
"The United Kingdom is a great exporting nation and our exporters lead the way, in creating jobs, raising wages and growing our economy."
On the data front, figures released earlier revealed that the government had its biggest July surplus for 18 years, giving Philip Hammond room for spending within his self-imposed fiscal constraints as the chancellor prepares his annual budget.
Public sector net borrowing, excluding public sector banks, showed a surplus of £2.0bn for July - £1bn more than a year earlier, official figures showed. The result was the biggest surplus for July since 2000 and beat than the £1.1bn average surplus forecast in a Reuters poll of economists.
The surplus took net borrowing for the first four months of the current financial year to £12.8bn - a reduction of £8.5bn from a year earlier and the lowest net borrowing at this point since 2002.
Elsewhere, the latest survey from the Confederation of British Industry showed the total orders balance fell to +7 in August from +11 in July, just below consensus expectations of +8.
In corporate news, BHP Billiton was in the red even as it declared a record final dividend as higher prices and volumes sent the miner’s underlying annual profit up by a third.
Morrisons was the biggest gainer after Kantar said its sales grew 2.7% in the 12 weeks to 13 August, making it the fastest-growing of the 'big four' supermarkets again.
Persimmon ticked up after it reported a 13% increase in profits from the first half of the year as the housebuilder sold 4% more homes and the average selling price increased 1% to £215,813.
AstraZeneca was a touch firmer after it announced that the Japanese Ministry of Health, Labour and Welfare has approved ‘Tagrisso’ (osimertinib) for the first-line treatment of patients with inoperable or recurrent epidermal growth factor receptor mutation-positive non-small cell lung cancer, following priority review.
Wood Group nudged higher as it posted a loss for the first six months of the year but a rise in revenues.
Polymetal rallied as it reported a 46% jump in first-half net income, while Charter Court Financial Services gained ground after it posted a rise in first-half profit as loans roses and the company announced an inaugural dividend.
In broker note action, Aggreko was upgraded to ‘buy’ at HSBC, while Weir was lifted to ‘outperform’ at Credit Suisse. Bodycote was downgraded to ‘sell’ at Panmure Gordon.
Market Movers
FTSE 100 (UKX) 7,578.01 -0.17%
FTSE 250 (MCX) 20,608.94 0.38%
techMARK (TASX) 3,549.35 -0.08%
FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 267.55p 1.42%
Centrica (CNA) 146.45p 1.14%
United Utilities Group (UU.) 751.60p 0.97%
Anglo American (AAL) 1,568.80p 0.95%
Ocado Group (OCDO) 1,069.00p 0.94%
International Consolidated Airlines Group SA (CDI) (IAG) 708.20p 0.94%
Severn Trent (SVT) 2,021.00p 0.85%
Admiral Group (ADM) 2,050.00p 0.79%
Barratt Developments (BDEV) 542.60p 0.67%
Sainsbury (J) (SBRY) 336.60p 0.63%
FTSE 100 - Fallers
Melrose Industries (MRO) 224.50p -1.01%
BHP Billiton (BLT) 1,629.80p -0.94%
Rio Tinto (RIO) 3,685.00p -0.87%
Shire Plc (SHP) 4,438.53p -0.86%
Compass Group (CPG) 1,694.50p -0.82%
Evraz (EVR) 475.80p -0.81%
Burberry Group (BRBY) 2,228.00p -0.80%
Bunzl (BNZL) 2,334.00p -0.77%
ITV (ITV) 164.90p -0.75%
Rentokil Initial (RTO) 336.60p -0.65%
FTSE 250 - Risers
Wood Group (John) (WG.) 704.80p 6.56%
Contour Global (GLO) 238.60p 5.39%
Rank Group (RNK) 171.00p 4.27%
Clarkson (CKN) 2,832.50p 3.94%
Aggreko (AGK) 873.40p 3.70%
Card Factory (CARD) 183.49p 3.37%
Centamin (DI) (CEY) 106.40p 2.55%
Charter Court Financial Services Group (CCFS) 341.20p 2.52%
WH Smith (SMWH) 2,016.00p 2.44%
Mediclinic International (MDC) 484.50p 2.37%
FTSE 250 - Fallers
Hill & Smith Holdings (HILS) 1,102.00p -3.33%
Syncona Limited NPV (SYNC) 279.60p -3.25%
Indivior (INDV) 264.80p -2.40%
Genus (GNS) 2,788.00p -2.04%
Thomas Cook Group (TCG) 83.65p -1.65%
IP Group (IPO) 120.20p -1.64%
CYBG (CYBG) 342.80p -1.61%
Aveva Group (AVV) 2,632.00p -1.50%
Ferrexpo (FXPO) 153.45p -1.45%
Virgin Money Holdings (UK) (VM.) 398.80p -1.26%