London midday: Stocks off lows as Shire surges on deal news
Deal news helped London equity indices pare losses by midday on Wednesday, after a technology-led selloff on Wall Street sparked early losses.
The FTSE 100 was down 0.2% to 6,983.89, while the pound was up 0.1% against the euro at 1.1422 and flat versus the dollar at 1.4153.
Stocks in the US suffered heavy losses on Tuesday, with Facebook under the cosh as it emerged that chief executive Mark Zuckerberg would testify before Congress following the Cambridge Analytica scandal.
This led to some of their biggest falls in years for the so called 'FANG' stocks of Facebook, Amazon, Netflix and Google owner Alphabet as concern spread about a crackdown on how these companies use personal data prompted a re-examination of how these companies are valued.
Chris Beauchamp, chief market analyst at IG, said: "Markets remain under pressure as the sell-off in tech spreads once more to the wider equities space. The bounce on Tuesday looks like a flash in the pan, with more and more investors heading to the exit. It is looking increasingly likely that we have a re-run of August 2015 on our hands; equities then had months of volatility to contend with before the rally resumed.
"With trade wars and the tech scandal weighing on sentiment we may well have more downside to content with."
On the UK data front, the latest survey from the CBI showed that retailers sustained a fall in sales over a snow-affected February. The reported sales balance fell to -8 in March, from +8 in February, well below the consensus forecast for a +7 gain.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Heavy snow in late February and early March is largely to blame for the big drop in the reported sales balance in March. The survey was conducted during the period of bad weather and up to March 14, so it won’t have captured any catch-up spending that might have occurred in late March. Nonetheless, the underlying trend in real sales looks weak too."
Investors will also eye the final confirmation of fourth-quarter US GDP data at 1330 BST.
On the corporate front, M&A news injected some life into proceedings, with Shire shares sharply higher after Japanese rival Takeda Pharmaceutical said it was considering a buyout of the company.
Diploma, the life sciences, seals and controls supplier, was on the front foot after reporting "robust" trading in the first half of the year, as sales growth has slowed slightly in the second quarter.
Outside of the FTSE 350, DFS Furniture racked up strong gains as it posted an expected drop in half-year profit and revenue but struck a confident tone on its outlook, bucking the downcast retail trend of late.
Paddy Power Betfair was on the back foot after saying it has recruited Jonathan Hill from Saga to be the bookmaker’s next chief financial officer. Hill, who will stay at the over-50s company until September, has been Saga’s CFO since 2015.
Miners were dented as the swing in the dollar hurt metals prices, with Antofagasta, Glencore, BHP, Anglo American and Rio Tinto among the big fallers.
Ahead of the acceptance deadline for the deal on Thursday, turnaround specialist Melrose Industries set out details of binding commitments for its proposed hostile takeover of GKN and launched a final effort to assert its credentials as a company committed to the wider UK economy. Shares in both companies were lower.
Insurer Aviva was trading lower as the Financial Conduct Authority said it was considering whether to launch a formal investigation into its decision to ditch plans to cancel its preference shares.
Primark owner Associated British Foods gained as it was upgraded to ‘overweight’ at Morgan Stanley. Luxury fashion brand Burberry was in the black as Goldman Sachs lifted it to ‘buy’ and added the stock to its conviction list, while G4S rallied after an upgrade to ‘hold’ at HSBC. Hunting retreated after a downgrade to ‘neutral’ by Macquarie.
Market Movers
FTSE 100 (UKX) 6,983.89 -0.23%
FTSE 250 (MCX) 19,227.71 -0.83%
techMARK (TASX) 3,243.47 1.33%
FTSE 100 - Risers
Shire Plc (SHP) 3,652.50p 18.97%
United Utilities Group (UU.) 702.60p 5.12%
Severn Trent (SVT) 1,800.00p 3.33%
National Grid (NG.) 787.44p 3.14%
Unilever (ULVR) 3,817.00p 2.09%
Associated British Foods (ABF) 2,469.00p 1.90%
Micro Focus International (MCRO) 965.80p 1.49%
Imperial Brands (IMB) 2,373.00p 1.41%
G4S (GFS) 245.00p 1.20%
Centrica (CNA) 139.01p 1.17%
FTSE 100 - Fallers
Evraz (EVR) 431.20p -4.73%
Antofagasta (ANTO) 912.40p -3.73%
Scottish Mortgage Inv Trust (SMT) 439.00p -3.52%
Anglo American (AAL) 1,634.60p -2.76%
Glencore (GLEN) 354.15p -2.57%
Old Mutual (OML) 236.30p -2.44%
easyJet (EZJ) 1,564.00p -2.37%
BHP Billiton (BLT) 1,370.60p -2.31%
Rio Tinto (RIO) 3,522.00p -2.15%
Mondi (MNDI) 1,894.50p -1.89%
FTSE 250 - Risers
Pennon Group (PNN) 615.80p 3.84%
John Laing Group (JLG) 267.70p 2.57%
Barr (A.G.) (BAG) 642.00p 2.56%
Dairy Crest Group (DCG) 500.00p 1.58%
Euromoney Institutional Investor (ERM) 1,222.00p 1.50%
Tate & Lyle (TATE) 533.40p 1.41%
Diploma (DPLM) 1,132.00p 1.16%
Provident Financial (PFG) 677.00p 1.07%
Capita (CPI) 150.30p 1.01%
Ibstock (IBST) 275.60p 0.95%
FTSE 250 - Fallers
Vedanta Resources (VED) 690.60p -4.32%
Kaz Minerals (KAZ) 858.80p -3.74%
Sophos Group (SOPH) 453.00p -3.58%
Polar Capital Technology Trust (PCT) 1,074.00p -3.42%
Grafton Group Units (GFTU) 777.00p -2.75%
Monks Inv Trust (MNKS) 751.51p -2.65%
Tullow Oil (TLW) 190.80p -2.58%
Edinburgh Dragon Trust (EFM) 354.00p -2.48%
Metro Bank (MTRO) 3,508.00p -2.45%
Intermediate Capital Group (ICP) 965.50p -2.33%