London midday: Stocks turn lower as utilities weigh after SSE profit warning
London stocks had fallen into the red by midday on Wednesday, dragged lower by utilities after a profit warning from SSE, with global trade relations still very much a concern.
The FTSE 100 was down 0.2% to 7,260.03, while the pound was down 0.3% against the dollar at 1.2991 and off 0.1% versus the euro at 1.1216.
The relationship between the US and China was in focus again after it emerged on Tuesday that Beijing will ask the World Trade Organization for permission to impose sanctions on the US next week.
Oanda analyst Craig Erlam said: "With China involving the WTO in the dispute and the US preparing more tariffs - and threatening an eventual tariff on all imports - it doesn’t appear this threat is going away any time soon and is something we should just get used to. This could work to the advantage of the EU with Trump engaging in negotiations in an attempt to forge closer trade ties, remove barriers and eliminate the apparent need for new tariffs."
On the corporate front, SSE was the biggest drag on the FTSE 100 as it warned that first-half profits are likely to have halved compared to last year due to higher costs and lower volumes of energy being consumed. After five months of its financial year, the group said full-year adjusted operating profit at its Energy Services arm was likely to be significantly lower than predicted at the start of the year ahead of its spin-off and merger with Npower.
Centrica, Severn Trent and National Grid all retreated.
Elsewhere, TI Fluid Systems was on the back foot after private equity group Bain Capital sold around 60m shares in the company.
On the upside, Galliford Try rallied as it posted a jump in full-year profit and revenue as completions rose and the housebuilder said it was making "excellent" progress towards its strategic objectives across all three businesses.
Dunelm advanced after saying that annual sales improved but underlying profits in the past 12 months have fallen due to lower margins and trading losses from its acquisition of online specialist Worldstores.
Luxury fashion brand Burberry was boosted by a report that a private equity firm had contacted Ferragamo about an offer, but this was later denied by the company.
Rare diseases specialist Shire ticked a touch higher after saying that Veyvondi has been granted EU marketing authorisation to treat bleeding events for adults with von Willebrand disease.
Sports Direct rose as it said ahead of its AGM that trading was in line with the group’s expectations of achieving a 5% to 15% improvement in underlying earnings for current financial year, excluding the acquisition of House of Fraser and announced that chairman Keith Hellawell is stepping down. Three shareholder advisory groups have been calling on investors to vote against the re-election of Hellawell and CEO Mike Ashley at the AGM.
Superdry edged up as it appointed the former head of global womenswear for Tommy Hilfiger, Brigitte Danielmeyer, to the newly-created role of chief product officer.
Big Yellow was in the green as it announced plans to raise around £67m to fund its pipeline of development opportunities and continue its longer-term portfolio expansion strategy, while Safestore gained after it reported a strong performance in the third quarter.
In broker note action, Anglo American was lifted to ‘buy’ at HSBC, while Capital & Counties was boosted to ‘neutral’ from ‘underperform’ by Exane BNP Paribas.
LSE was upgraded to ‘buy’ at Alphavalue and RBS was bumped up to ‘buy’ at Goldman Sachs.
Barclays upped Taylor Wimpey to ‘overweight’ from equalweight’ and Bovis Homes to ‘equalweight’ from ‘underweight’, but cut Crest Nicholson to ‘equalweight’ from ‘overweight’.
FTSE 100 - Risers
Glencore (GLEN) 293.80p 2.41%
Burberry Group (BRBY) 2,122.00p 1.87%
Ashtead Group (AHT) 2,428.00p 1.25%
Royal Mail (RMG) 475.60p 1.11%
Marks & Spencer Group (MKS) 292.00p 1.07%
Tesco (TSCO) 239.20p 1.01%
Sainsbury (J) (SBRY) 323.10p 1.00%
easyJet (EZJ) 1,407.85p 0.99%
Antofagasta (ANTO) 747.20p 0.92%
Evraz (EVR) 471.00p 0.86%
FTSE 100 - Fallers
SSE (SSE) 1,154.50p -7.68%
Centrica (CNA) 144.80p -3.31%
Rolls-Royce Holdings (RR.) 954.60p -2.09%
Severn Trent (SVT) 1,911.50p -1.57%
National Grid (NG.) 796.40p -1.42%
British American Tobacco (BATS) 3,507.50p -1.32%
Imperial Brands (IMB) 2,580.00p -1.09%
Relx plc (REL) 1,636.00p -1.06%
CRH (CRH) 2,464.00p -0.85%
Sage Group (SGE) 575.10p -0.84%
FTSE 250 - Risers
Galliford Try (GFRD) 1,063.00p 6.41%
Dunelm Group (DNLM) 538.00p 5.49%
Greene King (GNK) 532.75p 4.26%
Sports Direct International (SPD) 352.80p 3.49%
Centamin (DI) (CEY) 89.22p 3.43%
Petrofac Ltd. (PFC) 618.60p 3.38%
Kaz Minerals (KAZ) 451.00p 3.27%
Premier Oil (PMO) 123.60p 3.09%
Greencore Group (GNC) 184.55p 2.81%
McCarthy & Stone (MCS) 122.30p 2.77%
FTSE 250 - Fallers
TI Fluid Systems (TIFS) 268.20p -2.97%
Energean Oil & Gas (ENOG) 530.00p -2.75%
Crest Nicholson Holdings (CRST) 358.80p -2.39%
AA (AA.) 115.10p -2.25%
Capita (CPI) 142.85p -2.16%
Equiniti Group (EQN) 250.50p -2.15%
Cairn Energy (CNE) 222.00p -1.77%
Bank of Georgia Group (BGEO) 1,694.20p -1.40%
Schroder Asia Pacific Fund (SDP) 415.18p -1.38%
Mediclinic International (MDC) 471.10p -1.38%