London midday: Stocks push higher ahead of US CPI; BoJo Brexit speech ingested
London equity markets had extended gains by midday on Wednesday, taking their cue from another positive close on Wall Street as investors looked ahead to key US inflation figures.
The FTSE 100 was up 0.8% to 7,221.89, while the pound slipped to a five-week low against the euro as investors took in a speech by Foreign Secretary Boris Johnson on Brexit.
Sterling was off 0.3% against the euro and the dollar at 1.1218 and 1.3847, respectively, as Johnson said Brexit was a cause for "hope not fear". In a speech calling on Leavers and Remainers to come together, he said a second referendum on Brexit would be a "disastrous mistake" and insisted that Britain quitting the EU is about "re-engaging this country with its global identity".
"We would be mad to go through this process of extrication from the EU, and not to take advantage of the economic freedoms it will bring. We will stop paying huge sums to the EU every year and as the PM has said, this will leave us with more to spend on our domestic priorities, including the NHS."
"We will be able to take back control of our borders - not because I am hostile to immigrants or immigration. Far from it. We need talented people to come and make their lives in this country – doctors, scientists, the coders and programmers who are so crucial to Britain’s booming tech economy."
With no major UK data releases due, all eyes will be on the US, where the consumer price index for January is out at 1330 GMT, along with retail sales.
Oanda analyst Craig Erlam said: "Given the volatility that we’ve seen over the last week or so, which was initially attributed to higher interest rate expectations following the January jobs report, traders will be closely monitoring the US inflation and retail sales releases today. Both numbers will be released shortly before the open on Wall Street and could be the trigger for further volatility, especially if the CPI exceeds expectations.
"While the CPI number isn’t the Federal Reserve’s preferred inflation measure – which could impact how traders respond to it - it is released a couple of weeks earlier than the core PCE price index and so is seen as being indicative of inflationary trends. This means markets can be sensitive to the release, particularly during times of increases sensitivity, like we’re seeing at the moment."
In corporate news, Coca Cola HBC rallied as it reported full year earnings before interest and tax (EBIT) of €621m, a rise of 20% on net sales revenue of £6.5bn, up 4.9%.
Sky and BT were both on the front foot as they picked up the rights to the Premier League for £4.46bn.
Engineer GKN, which is currently fighting off a hostile bid from turnaround specialist Melrose Industries, was in the black after saying it is targeting a cash return of up to £2.5bn to shareholders over the next three years.
The knock-on effects of Carillion's collapse were being felt as Galliford Try tumbled after announcing a £150m capital raising to cover the impact. The announcement came alongside the firm's latest interims and a decision to pay out a dividend of 28p for the six months to 31 December, versus 32p in the first half of 2017.
However, Serco advanced after saying it has signed a revised purchase agreement with Carillion's liquidators allowing it to buy some of Carillion's UK healthcare facilities management business for £29.7m, down from a previously agreed price of £47.7m.
Sirius Minerals gained after entering into a design and build contract with shaft sinking and mining contractor DMC Mining Services for the construction of the four shafts required for its polyhalite project in North Yorkshire.
Spirax-Sarco Engineering nudged up after it said chairman Bill Whiteley plans to retire from the board in May, and will be succeeded by senior independent director Jamie Pike.
CYBG was boosted by an upgrade to 'sector perform' at RBC Capital Markets, but Virgin Money was hit by a downgrade to 'underperform' by the same outfit.
Aviva was higher after an upgrade to 'buy' at Goldman Sachs, while TalkTalk edged up after an upgrade to 'hold' at Societe Generale.
AG Barr slid after JPMorgan cut the stock to 'underweight'.
FTSE 100 - Risers
Old Mutual (OML) 239.90p 3.23%
Sky (SKY) 1,095.05p 3.21%
Coca-Cola HBC AG (CDI) (CCH) 2,306.00p 3.09%
Bunzl (BNZL) 2,055.00p 2.44%
British American Tobacco (BATS) 4,483.50p 2.35%
HSBC Holdings (HSBA) 752.10p 2.31%
Shire Plc (SHP) 3,250.50p 2.16%
ITV (ITV) 164.09p 2.09%
Evraz (EVR) 368.10p 1.97%
United Utilities Group (UU.) 676.60p 1.84%
FTSE 100 - Fallers
TUI AG Reg Shs (DI) (TUI) 1,561.00p -3.31%
Standard Life Aberdeen (SLA) 390.70p -2.03%
CRH (CRH) 2,442.00p -0.73%
Sainsbury (J) (SBRY) 245.60p -0.45%
Barratt Developments (BDEV) 549.60p -0.25%
NMC Health (NMC) 3,260.00p -0.24%
Berkeley Group Holdings (The) (BKG) 3,775.00p -0.24%
Halma (HLMA) 1,188.00p -0.17%
Lloyds Banking Group (LLOY) 66.45p -0.12%
International Consolidated Airlines Group SA (CDI) (IAG) 601.80p -0.10%
FTSE 250 - Risers
TBC Bank Group (TBCG) 1,662.00p 4.79%
Provident Financial (PFG) 687.20p 4.52%
Capita (CPI) 190.86p 3.49%
Hikma Pharmaceuticals (HIK) 885.40p 3.48%
Merlin Entertainments (MERL) 331.20p 3.43%
Convatec Group (CTEC) 193.55p 3.28%
Inmarsat (ISAT) 440.70p 3.20%
Dunelm Group (DNLM) 635.50p 2.91%
Intu Properties (INTU) 213.40p 2.65%
IWG (IWG) 238.20p 2.32%
FTSE 250 - Fallers
Galliford Try (GFRD) 807.50p -17.56%
Barr (A.G.) (BAG) 637.00p -3.64%
Kier Group (KIE) 1,050.00p -3.49%
AA (AA.) 114.16p -3.12%
Vectura Group (VEC) 75.45p -3.05%
Virgin Money Holdings (UK) (VM.) 263.90p -2.70%
St. Modwen Properties (SMP) 388.20p -1.82%
Tullow Oil (TLW) 172.25p -1.60%
Spire Healthcare Group (SPI) 220.60p -1.52%
Beazley (BEZ) 533.00p -1.48%