London midday: Stocks maintain gains as pound drops below $1.41, miners gain
London stocks were holding on to gains by midday on Monday as the pound fell below $1.41, with miners on the up as copper prices rose.
The FTSE 100 was up 0.2% to 7,683.42, while the pound was 0.6% weaker against the dollar at 1.4075 as the greenback gained back some of the ground lost last week and amid worries about the Brexit transition following reports over the weekend that Britain wants to vet new EU laws. Sterling was down 0.4% versus the euro at 1.1351.
A weaker pound tends to underpin the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
A strong performance from the heavily-weighted mining sector also lent a hand as copper prices advanced, helping to push shares in Glencore, Rio Tinto, Antofagasta and Anglo American higher, even though usual effect of a stronger dollar is to push down commodities prices.
IG analyst Joshua Mahony said: "After last week’s losses, UK traders will hope that this will represent the beginning of a resurgence for the FTSE, yet with the dollar devaluation likely to drive the pound higher yet, it makes more sense to be long US markets over their European counterparts. "Today sees a somewhat serene start to what is likely to be a fairly frantic week, with the second half providing a whole host of top tier economic data points to drive market sentiment. Donald Trump’s state of the union address tomorrow sees the market focus shift back to US economic prospects, and with the potential for a raft of infrastructure projects around the corner, there is another good reason to be long US stocks."
There are no major UK data releases due on Monday, though a meeting in Brussels will formally agree negotiating terms on the Brexit transition period.
Things will pick up on Tuesday with the release of UK net lending and mortgage approvals and an important Brexit debate in the House of Lords and get busier stateside too, with President Donald Trump’s State of the Union Address, while the Fed meeting on Wednesday and non-farm payrolls on Friday will also be market highlights.
In corporate news, Anglo American rose after announcing the sale of the New Largo thermal coal project and Old New Largo closed colliery in South Africa for ZAR 850m ($71m).
Relx Group ticked up after agreeing to buy California-based security technology company ThreatMetrix for £580m in cash.
John Laing Infrastructure advanced as it said there would be “minimal” service disruption from the Carillion collapse but that it expects additional advisory and transaction costs to be approximately £3m in aggregate.
GKN nudged a touch lower as it looked to clear up a dispute over its pensions deficit as it battles to stave off a hostile takeover from smaller rival Melrose Industries. The FTSE 100 group said its group pension scheme's deficit stood at £0.7bn on one basis of accounting at the end of December, or could be as low as £0.4bn on an actuarial basis or as high as £1.4bn if gilt yields do not rise.
On the broker note front, Smurfit Kappa got a boost as Numis upped its price target on the stock to 2,800p from 2,600p ahead of its results on 7 February.
EasyJet flew lower after a downgrade to ‘market perform’ at Bernstein, while Diageo dropped after a downgrade to ‘sector perform’ at RBC Capital Markets and Polymetal was hit by a downgrade to ‘underweight’ at JPMorgan.
Market Movers
FTSE 100 (UKX) 7,683.42 0.23%
FTSE 250 (MCX) 20,686.96 0.35%
techMARK (TASX) 3,484.71 0.36%
FTSE 100 - Risers
Smurfit Kappa Group (SKG) 2,592.00p 2.53%
Glencore (GLEN) 410.90p 2.24%
Rolls-Royce Holdings (RR.) 874.00p 2.13%
Rio Tinto (RIO) 4,022.50p 2.03%
Antofagasta (ANTO) 955.00p 1.49%
SSE (SSE) 1,300.45p 1.48%
Anglo American (AAL) 1,759.20p 1.42%
Schroders (SDR) 3,770.00p 1.37%
Prudential (PRU) 1,944.50p 1.30%
Johnson Matthey (JMAT) 3,335.00p 1.24%
FTSE 100 - Fallers
Diageo (DGE) 2,517.00p -1.64%
British American Tobacco (BATS) 4,876.00p -1.28%
Associated British Foods (ABF) 2,824.00p -1.09%
easyJet (EZJ) 1,675.00p -0.83%
Old Mutual (OML) 238.40p -0.79%
BT Group (BT.A) 260.85p -0.78%
United Utilities Group (UU.) 742.40p -0.75%
Severn Trent (SVT) 1,995.00p -0.75%
National Grid (NG.) 801.10p -0.73%
Next (NXT) 5,182.00p -0.69%
FTSE 250 - Risers
Cairn Energy (CNE) 225.00p 3.69%
Intermediate Capital Group (ICP) 1,163.00p 3.38%
Barr (A.G.) (BAG) 648.00p 3.02%
Renishaw (RSW) 4,924.00p 3.01%
UDG Healthcare Public Limited Company (UDG) 828.50p 2.92%
Sirius Minerals (SXX) 23.85p 2.89%
Herald Investment Trust (HRI) 1,224.00p 2.43%
Hikma Pharmaceuticals (HIK) 1,019.00p 2.17%
Sanne Group (SNN) 760.11p 2.03%
McCarthy & Stone (MCS) 151.43p 1.90%
FTSE 250 - Fallers
Provident Financial (PFG) 681.80p -2.85%
TalkTalk Telecom Group (TALK) 135.83p -2.77%
Brown (N.) Group (BWNG) 208.61p -2.33%
AA (AA.) 146.30p -2.04%
Ocado Group (OCDO) 484.70p -2.04%
Greencore Group (GNC) 205.50p -1.67%
Acacia Mining (ACA) 190.20p -1.58%
Card Factory (CARD) 195.90p -1.51%
Dignity (DTY) 894.00p -1.49%
Babcock International Group (BAB) 732.80p -1.40%