London midday: Stocks edge lower as US banks report earnings
London stocks were nudging lower by midday as investors digested the first in a series of second-quarter earnings from US banking heavyweights, with JPMorgan, Wells Fargo and Citigroup all on the slate on Friday.
The FTSE 100 was down 0.2% to 7,400.72, while the pound was up 0.1% versus the euro at 1.1365 and 0.2% firmer against the dollar at 1.2969.
Accendo Markets analyst Mike van Dulken said: “In focus today will be the start of Q2 earnings season in the US. The big Banks open proceedings via JPMorgan, Wells Fargo and Citigroup, all rallying in recent weeks on expectations of big dividends/buybacks following Fed approval.
“Consensus has been guided lower as per usual, so prepare for consensus/guidance beats. But Wall St still expects a mixed showing amid pressure on trading from very low market volatility, limited deal-making (M&A/IPOs) and slower lending volumes. Are Fed hikes helping net interest margins and profitability? Outlook will likely be key.”
Investors will be hoping that JPMorgan set the tone with its earnings, as both profit and revenue at the bank beat analysts’ estimates.
Meanwhile, on the UK corporate front, Royal Mail retreated as it announced changes to its pension plan, giving its workers a choice between a defined-benefit and a defined-contribution scheme.
International sales, marketing and support services group DCC was a touch weaker as it said first quarter trading was in line with expectations and it expected the full year to produce “profit and growth”.
Electrical and telecoms retailer Dixons Carphone fell after agreeing to sell its entire holdings in The Phone House Spain, along with its related companies Connected World Services Europe and Smarthouse, to Bilbao-based technological services firm Global Dominion Access, it announced on Friday.
Acacia Mining was in the red after it said it will start paying a higher royalty to the Tanzanian government for its production of gold and copper of 6%, up from 4%, after new mining regulations were drawn up following an export dispute.
Emerging markets asset manager Ashmore was on the back foot after reporting a 5% jump in fourth-quarter assets thanks to a positive investment performance and net inflows.
Recruiter Hays was trading flat, giving up earlier gains despite saying it expects full-year profits to be ahead of market forecasts, while Workspace edged up after noting strong customer demand in the first quarter.
Carillion surged as it hired HSBC as its second financial adviser and joint corporate broker with immediate effect, although it also lost a contract.
FTSE 100 - Risers
Tesco (TSCO) 174.55p 1.07%
Standard Life (SL.) 414.90p 0.97%
Shire Plc (SHP) 4,208.00p 0.79%
Rio Tinto (RIO) 3,446.00p 0.76%
Mediclinic International (MDC) 745.50p 0.61%
BHP Billiton (BLT) 1,297.50p 0.58%
Pearson (PSON) 632.50p 0.56%
Antofagasta (ANTO) 856.50p 0.53%
Anglo American (AAL) 1,099.50p 0.50%
International Consolidated Airlines Group SA (CDI) (IAG) 627.00p 0.48%
FTSE 100 - Fallers
Royal Mail (RMG) 400.50p -2.55%
Barratt Developments (BDEV) 590.50p -1.67%
AstraZeneca (AZN) 4,942.00p -1.42%
Convatec Group (CTEC) 295.00p -1.17%
Kingfisher (KGF) 295.30p -1.14%
Persimmon (PSN) 2,373.00p -1.08%
ITV (ITV) 175.40p -1.07%
Admiral Group (ADM) 2,029.00p -1.02%
Associated British Foods (ABF) 2,887.00p -0.96%
Mondi (MNDI) 2,022.00p -0.93%
FTSE 250 - Risers
Carillion (CLLN) 59.15p 6.67%
Derwent London (DLN) 2,719.00p 2.53%
Clarkson (CKN) 2,622.00p 1.63%
IP Group (IPO) 135.40p 1.50%
CLS Holdings (CLI) 202.90p 1.45%
Genus (GNS) 1,753.00p 1.39%
Telecom Plus (TEP) 1,125.00p 1.35%
Great Portland Estates (GPOR) 603.50p 1.34%
Hunting (HTG) 489.10p 1.30%
Renishaw (RSW) 3,920.00p 1.29%
FTSE 250 - Fallers
Sophos Group (SOPH) 446.30p -2.85%
Ashmore Group (ASHM) 340.80p -2.85%
Rank Group (RNK) 222.70p -1.85%
Galliford Try (GFRD) 1,262.00p -1.79%
Redefine International (RDI) 38.93p -1.72%
TalkTalk Telecom Group (TALK) 185.40p -1.64%
Countryside Properties (CSP) 343.60p -1.43%
Dixons Carphone (DC.) 260.80p -1.40%
Acacia Mining (ACA) 278.00p -1.38%
Ascential (ASCL) 322.20p -1.35%