London midday: Stocks pare gains as pound jumps on Brexit breakthrough hopes
London stocks were up but off earlier highs by midday on Monday, after the pound reversed earlier losses amid growing hopes of a Brexit breakthrough and following solid construction data, as investors welcomed the passing of the US tax reform bill.
The FTSE 100 was up 0.5% to 7,337.00, while the pound was up 0.3% against the dollar at 1.3519 and 0.6% firmer versus the euro at 1.1400 as the latest survey from IHS Markit showed construction activity rallied more than expected last month, with residential building leading the way.
Spreadex analyst Connor Campbell said the pound was also benefiting from report that the UK has conceded there will be no regulatory divergence for Ireland on the single market and customs union, "potentially unclogging one of the major blockages preventing the unlocking of trade talks".
There were also reports that Michel Barnier had said a breakthrough was likely on Monday. Prime Minister Theresa May is due to meet European Commission President Jean-Claude Juncker for lunch in Brussels, along with Brexit Secretary David Davis and his counterpart Barnier.
The Markit/CIPS UK construction purchasing managers' index jumped to a five-month high of 53.1 for November from 50.8 in October.
With a PMI reading above 50 signalling growth, November's survey pointed to a return to growth after two consecutive quarters of contraction and was well ahead of the consensus forecast of 51.0.
A pick-up in the sector was largely confined to residential building, the survey found, with resilient demand reported and even an accelerated upturn in residential work.
Investors were also cheering news that the US Senate has voted 51 to 49 to pass a bill that will implement a slew of changes to the US tax code which will include a big cut in corporation tax to 20% from 35%.
On the corporate front, US-exposed equipment rental firm Ashtead and building materials group CRH gained on the back of the passing of the US Senate tax bill.
Broadcaster Sky was a high riser amid news that 21st Century Fox has restarted talks over a possible sale to Walt Disney.
Rio Tinto was on the front foot as it appointed non-executive director Simon Thompson as chairman with effect from 5 March 2018, succeeding Jan du Plessis.
Bus and coach operator National Express rose after saying it has enjoyed a good trading performance across all divisions in the autumn and completed two overseas acquisitions.
Budget airline Ryanair flew higher after reporting a 6% jump in traffic for last month as the load factor edged higher.
In broker note action, UBM was boosted by an upgrade from Exane BNP Paribas, while Premier Oil gushed higher after it was bumped up to 'buy' from 'hold' at Canaccord Genuity and IMI gained on an upgrade to 'buy' from Deutsche Bank.
Consumer goods giant Reckitt Benckiser was weaker after being cut to 'add' from 'buy' at AlphaValue, while Ultra Electronics was hit by a downgrade at Bank of America Merrill Lynch.
FTSE 100 - Risers
Ashtead Group (AHT) 1,957.00p 2.78%
Barclays (BARC) 194.62p 2.67%
Sky (SKY) 954.00p 2.53%
Associated British Foods (ABF) 2,939.66p 2.43%
Carnival (CCL) 4,872.00p 2.16%
Smiths Group (SMIN) 1,491.00p 2.12%
RSA Insurance Group (RSA) 614.00p 2.07%
Royal Bank of Scotland Group (RBS) 275.30p 1.93%
CRH (CRH) 2,595.00p 1.88%
Ferguson (FERG) 5,440.00p 1.77%
FTSE 100 - Fallers
Babcock International Group (BAB) 669.50p -2.97%
Fresnillo (FRES) 1,272.00p -2.75%
Randgold Resources Ltd. (RRS) 6,805.00p -1.38%
Reckitt Benckiser Group (RB.) 6,323.00p -0.98%
Next (NXT) 4,405.00p -0.63%
Pearson (PSON) 710.50p -0.63%
British American Tobacco (BATS) 4,762.00p -0.63%
Mondi (MNDI) 1,732.00p -0.57%
Shire Plc (SHP) 3,629.50p -0.55%
Tesco (TSCO) 194.55p -0.51%
FTSE 250 - Risers
Melrose Industries (MRO) 204.50p 2.61%
Wizz Air Holdings (WIZZ) 3,547.00p 2.52%
Elementis (ELM) 270.90p 2.46%
Brewin Dolphin Holdings (BRW) 370.60p 2.38%
Marshalls (MSLH) 435.00p 2.33%
Grafton Group Units (GFTU) 759.50p 2.22%
Unite Group (UTG) 725.00p 2.18%
ZPG Plc (ZPG) 337.70p 2.15%
Electrocomponents (ECM) 629.00p 2.11%
UBM (UBM) 754.50p 1.96%
FTSE 250 - Fallers
Drax Group (DRX) 260.90p -3.05%
Ocado Group (OCDO) 353.20p -2.83%
Ultra Electronics Holdings (ULE) 1,269.00p -2.38%
Polymetal International (POLY) 875.50p -2.07%
Hochschild Mining (HOC) 227.30p -2.03%
Centamin (DI) (CEY) 136.48p -1.89%
Hikma Pharmaceuticals (HIK) 996.50p -1.73%
Vedanta Resources (VED) 685.50p -1.72%
Acacia Mining (ACA) 170.10p -1.62%
Greggs (GRG) 1,310.00p -1.58%