London midday: Energy shares pace the advance as oil rallies
London stocks had extended gains by midday on Wednesday, with energy shares pacing the advance as Brent crude hit its best levels since 2014 on the back of US President Trump's decision to pull out of the Iran nuclear deal, with a raft of corporate news also keeping investors busy.
The FTSE 100 was up 0.6% to 7,610.84, while the pound was flat versus the euro and the dollar at 1.1414 and 1.3551.
Trump said on Tuesday that the nuclear agreement was a "horrible, one-sided deal that should never, ever have been made" and that rather than protecting the US and its allies, it placed "very weak limits on the regime's nuclear activity".
European powers, meanwhile, reiterated their commitment to the 2015 agreement, while Iranian President Hassan Rouhani said that for now, he considers the deal to be intact.
Although Trump had been widely expected to announce the withdrawal, analysts said the threat that he would also penalise anyone who helps Iran is likely to have a lasting impact on markets.
Oil prices gained on the back of the announcement, with West Texas Intermediate and Brent crude 2.5% higher at $70.84 a barrel and $76.77, respectively, pushing both Royal Dutch Shell and BP up 2.2%.
Oanda analyst Craig Erlam said: "The question now is how restrictive the sanctions will be on the Iranian economy and its ability to produce and export oil given that the UK, Germany, France, China and Russia remain committed to the deal.
"Oil has been rallying for days in response to rumours that Trump would announce the withdrawal, which clearly suggests that traders believe the sanctions will further tighten global supply at a time when some of the world’s largest producers have already significantly reduced inventories. There is clearly the potential for these countries to fill the void left by the sanctions but if it aids their cause then they’ll likely opt against it."
There are no major UK data releases due, with the week's highlights - the Bank of England rate announcement and manufacturing and industrial production figures for March - out on Thursday.
In corporate news, Imperial Brands rallied as it said sales volumes continued to outperform the industry and doled out a 10% increase in its interim dividend of 56.87p, but posted a 7% drop in profits.
Vodafone gained ground as it agreed to acquire Liberty Global's operations in Germany, the Czech Republic, Hungary and Romania for an enterprise value of €18.4bn.
OneSavings Bank rose as it said the first-quarter loan book grew 5% and reiterated its guidance for the year, while JD Wetherspoon ticked up despite reporting a slowdown in sales growth in the 13 weeks to 19 April.
Troubled doorstep lender Provident Financial racked up strong gains as it hailed a solid start to the year and said it was on track to deliver 2018 results in line with its plans, while engineer Renishaw surged after posting a 12% jump in revenue for the first three quarters of the year.
On the downside, luxury fashion brand Burberry was under the cosh after Groupe Bruxelles Lambert, the holding company of Belgian billionaire Albert Frere, sold its entire 6.6% stake in the group.
FTSE 250 bakery chain Greggs tumbled as it struck a cautious note and said underlying profits for the year are likely to be flat year-on-year, with trading in March and April hit by weaker market conditions.
Compass Group slumped as its first-half results missed expectations and it revealed a big drop in margins in Europe, while security group G4S was in the red as it said first-quarter organic revenue fell 2%, but that it expects growth to accelerate in the second half of the year.
TUI was on the back foot despite posting a narrowing of its second-quarter loss and maintaining its full-year guidance.
Builders' merchant Grafton Group lost ground after saying it experienced a positive star to the year in January and February, but that March was weaker due to the bad weather.
Market Movers
FTSE 100 (UKX) 7,610.84 0.60%
FTSE 250 (MCX) 20,599.38 0.02%
techMARK (TASX) 3,476.68 0.21%
FTSE 100 - Risers
Imperial Brands (IMB) 2,740.50p 4.66%
BHP Billiton (BLT) 1,616.80p 2.54%
Royal Dutch Shell 'B' (RDSB) 2,692.50p 2.26%
Royal Dutch Shell 'A' (RDSA) 2,607.50p 2.23%
BP (BP.) 562.60p 2.22%
Sainsbury (J) (SBRY) 299.80p 1.49%
Vodafone Group (VOD) 210.13p 1.25%
Evraz (EVR) 496.40p 1.18%
British American Tobacco (BATS) 3,853.50p 1.17%
Johnson Matthey (JMAT) 3,380.00p 1.17%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,784.00p -5.33%
Compass Group (CPG) 1,515.00p -4.33%
TUI AG Reg Shs (DI) (TUI) 1,720.50p -1.85%
G4S (GFS) 256.10p -1.84%
easyJet (EZJ) 1,637.50p -1.65%
NMC Health (NMC) 3,512.00p -1.46%
International Consolidated Airlines Group SA (CDI) (IAG) 690.84p -1.34%
Shire Plc (SHP) 3,991.50p -1.07%
AstraZeneca (AZN) 5,188.00p -0.97%
Mediclinic International (MDC) 692.40p -0.94%
FTSE 250 - Risers
Renishaw (RSW) 5,424.85p 14.16%
Provident Financial (PFG) 690.80p 7.60%
Hill & Smith Holdings (HILS) 1,448.31p 4.95%
Tullow Oil (TLW) 235.44p 4.50%
Cairn Energy (CNE) 239.40p 3.55%
Hunting (HTG) 834.00p 3.28%
On The Beach Group (OTB) 629.00p 3.11%
Wood Group (John) (WG.) 588.20p 2.90%
FirstGroup (FGP) 100.00p 2.56%
Just Group (JUST) 143.74p 2.23%
FTSE 250 - Fallers
Greggs (GRG) 1,076.28p -15.05%
Grafton Group Units (GFTU) 772.50p -3.38%
Inmarsat (ISAT) 380.16p -2.72%
ZPG Plc (ZPG) 374.60p -2.45%
SIG (SHI) 141.90p -1.94%
Thomas Cook Group (TCG) 131.80p -1.86%
Dechra Pharmaceuticals (DPH) 2,760.00p -1.78%
Merlin Entertainments (MERL) 368.90p -1.73%
Cineworld Group (CINE) 258.80p -1.67%
BGEO Group (BGEO) 3,326.00p -1.66%