London midday: Stocks extend gains as miners climb ahead of US-China talks
London stocks had extended gains by midday on Monday, supported by a strong showing in the mining sector, as investors grew more optimistic ahead of trade talks between the US and China later this week.
The FTSE 100 was up 0.4% to 7,590.44. Meanwhile, the pound was flat against the dollar at 1.2744 and up 0.2% versus the euro at 1.1168, with Brexit minister Dominic Raab heading to Brussels on Tuesday for more talks with the EU’s chief negotiator Michel Barnier.
However, the most-watched event this week is likely to be the US-China trade talks running from Tuesday to Wednesday, just before $16bn in new US tariffs on Chinese goods take effect.
"Markets often find it difficult to focus on one topic, and thus with the focus now shifting away from Turkey and towards China, it comes as no surprise that the pessimism of last week is fading into obscurity," said IG market analyst Joshua Mahony.
"Wednesday will see a trade delegation from China kick off a two-day meeting with their US counterparts, and as long as there is hope for some form of breakthrough, markets are likely to be in a more optimistic mood. However, this optimism is likely to be ill-founded, for all the previous meeting have shown precious few signs of anything that looks like a breakthrough."
Miners lent support, with Glencore, Anglo American and Antofagasta all higher as copper prices rose.
"London copper regained following last weeks’ broad sell-off as hopes towards progress in a trade dispute between the United States and China buoyed risk appetite and undermined safe-haven demand for the dollar," said broker SP Angel. "London Metal Exchange copper rose by +0.7% as the dollar sagged on receding investor demand, and a focus on discussions between the world’s top two economies are due this week."
NMC Health hit an all-time high in morning trading as the Gulf private healthcare operator plumped earnings 30% in the first half of the year a patient numbers grew and margins accelerated, helped by acquisitions of a cosmetic surgery business and a chronic care specialist. The UAE-based group has also made a first acquisition in the UK, from which it aims to grow a IVF business.
Paddy Power Betfair advanced as it completed the first tranche of a £200m share buyback programme and began a second £300m tranche.
Polymetal gained ground after saying that about 2000 tonnes of gold concentrate had been shipped by rail on Saturday from Kyzyl to an off-taker in China, with concentrate shipments to the Amursk POX hub expected to start next month.
LondonMetric ticked up after announcing the acquisition of two urban logistics warehouses for £23.5m, while Georgia-focused bank TBC Bank was up as it posted a 38.9% jump in underlying net profit for the second quarter.
Engineer Wood Group was lifted as it secured a six-year contract with Shell to provide asset management services to its Malampaya deepwater gas-to-power project in the Philippines.
Premier Oil nudged higher after saying that the development of its Tolmount Main gas field has been sanctioned by the joint venture and infrastructure partners.
On the downside, housebuilders were on the back foot, with Persimmon, Taylor Wimpey and Berkeley all lower as the latest figures from Rightmove released earlier showed that UK house prices dropped 2.3% in August from July, as new sellers launched a ‘late summer sale’ to try and find a buyer more quickly.
Miles Shipside, Rightmove director and housing market analyst, said: "Sellers who come to market in the peak holiday month often have a pressing need to sell and price down accordingly, and are offering ‘summer sale’ prices to entice holiday-distracted buyers."
G4S was in the red as the Ministry of Justice was forced to take control of the running of HMP Birmingham after officials decided the private contractor couldn't cope with the out-of-control prison.
Also under the cosh was Just Group after announcing last Friday that it had bought a 75% shareholding in the holding company of defined benefit pension advisory services firm Corinthian Pension Consulting.
Outside the FTSE 350, luxury handbag maker Mulberry, which operates 21 House of Fraser concessions, tumbled 15% after warning that the department store chain’s collapse into administration will dent profits by around £3m, while "challenging" trading conditions mean full-year profit will be "materially reduced".
On the broker note front, RBS was upgraded to ‘buy’ at Citi, while Kaz Minerals was lifted to ‘hold’ at Liberum. CVS Group was upgraded to ‘outperform’ at RBC Capital Markets and Hill & Smith was boosted to ‘buy’ at Investec.
Sage was cut to ‘sell’ at Deutsche Bank and Kingfisher was downgraded to ‘neutral’ at Davy.
Market Movers
FTSE 100 (UKX) 7,590.44 0.42%
FTSE 250 (MCX) 20,584.16 0.68%
techMARK (TASX) 3,551.30 0.11%
FTSE 100 - Risers
Evraz (EVR) 493.10p 5.68%
NMC Health (NMC) 4,250.00p 4.68%
BHP Billiton (BLT) 1,671.60p 2.59%
Paddy Power Betfair (PPB) 7,120.00p 2.37%
Mondi (MNDI) 2,146.00p 2.24%
Fresnillo (FRES) 943.40p 2.01%
Anglo American (AAL) 1,564.00p 1.96%
Glencore (GLEN) 310.75p 1.89%
Antofagasta (ANTO) 841.40p 1.74%
Johnson Matthey (JMAT) 3,618.00p 1.46%
FTSE 100 - Fallers
Sage Group (SGE) 627.60p -5.74%
Persimmon (PSN) 2,428.63p -1.36%
United Utilities Group (UU.) 742.80p -1.25%
Berkeley Group Holdings (The) (BKG) 3,698.00p -1.04%
Taylor Wimpey (TW.) 169.40p -0.88%
Standard Life Aberdeen (SLA) 314.54p -0.84%
Centrica (CNA) 144.75p -0.79%
Direct Line Insurance Group (DLG) 329.90p -0.75%
Severn Trent (SVT) 2,001.88p -0.60%
SSE (SSE) 1,257.50p -0.59%
FTSE 250 - Risers
Hill & Smith Holdings (HILS) 1,145.00p 4.09%
Hikma Pharmaceuticals (HIK) 1,891.00p 4.02%
IP Group (IPO) 125.05p 3.69%
Cairn Energy (CNE) 232.91p 3.42%
Cineworld Group (CINE) 296.78p 3.41%
Syncona Limited NPV (SYNC) 299.05p 3.12%
TBC Bank Group (TBCG) 1,650.00p 3.00%
Capita (CPI) 141.30p 2.99%
Senior (SNR) 326.80p 2.90%
Sophos Group (SOPH) 501.50p 2.60%
FTSE 250 - Fallers
Just Group (JUST) 86.95p -5.44%
On The Beach Group (OTB) 462.00p -2.53%
Crest Nicholson Holdings (CRST) 379.80p -1.81%
Superdry (SDRY) 1,136.00p -1.39%
Energean Oil & Gas (ENOG) 508.00p -0.97%
Assura (AGR) 57.17p -0.91%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 109.50p -0.90%
Bank of Georgia Group (BGEO) 1,724.40p -0.89%
Pennon Group (PNN) 774.00p -0.79%
Softcat (SCT) 838.30p -0.79%