London midday: Stocks maintain small gains but AstraZeneca bucks trend
(ShareCast News) - London stocks were holding on to small gains by midday on Thursday as investors continued to digest a dovish congressional testimony by Federal Reserve Chair Janet Yellen a day earlier.
The FTSE 100 was up 0.1% to 7,425.15, while the pound was up 0.3% against the dollar at 1.2923 after Yellen indicated that the Fed won't be rushing to tighten monetary policy, and 0.6% firmer versus the euro at 1.1350. Yellen will testify again on Thursday, this time to the Senate Banking Committee.
Oanda analyst Craig Erlam said Yellen's admission that rate increases will be gradual was not a new revelation in itself but "suggested that the pace of tightening next year and beyond may well be slower, with focus likely shifting to balance sheet reduction".
He added: "While many may have expected this to be the case prior to this, Yellen's acknowledgement of this potentially signals a slight shift in the Fed's rate outlook later this year, once the central bank unveils its plans to begin the process of reducing its bond purchases. In this moderate growth and low inflation environment, this comes as a relief to investors and therefore provided a temporary boost for equities."
Erlam said the market would follow Yellen's second testimony to check she reiterates the point, adds further colour to it, "or possibly backtracks on it".
Investors were also digesting news that British house price inflation slowed to its weakest in June since the aftermath of the Brexit vote as political worries took their toll. The Royal Institution of Chartered Surveyors' monthly house price index fell to +7 from +17 in May.
In corporate news, BT was the standout gainer after Ofcom said it will establish a separate unit to monitor the performance of the company's broadband network operator Openreach.
LondonMetric Property ticked a touch higher as it announced the acquisition of two Marks & Spencer stores in Newport, Isle of Wight and Kendal, Lancashire for £24.6 million, while specialist healthcare company BTG edged up after saying it was on track to achieve double digit sales growth in the 12 months to 31 March 2018.
Go-Ahead was in the black as it struck an agreement with the UK Department for Transport regarding the strike impact on train performance at its partially-owned Govia Thameslink Railway franchise. Unions criticised the penalty as merely a "slapped wrist".
Construction and support group Carillion finally bounced back from two days of heavy losses after a dismal trading update on Monday.
On the downside, AstraZeneca was under pressure following a report that its chief executive officer Pascal Soriot is leaving the company to go to Teva Pharmaceuticals.
N Brown slumped after saying it would take a £35-40m one-off charge this year to cover expected customer compensation after finding it had sold 'flawed' product protection insurance to customers between 2006 and 2014.
Online fashion retailer ASOS was trading flat, recovering from earlier losses after it said sales in the four months to the end of June rose 32% and that it expects sales growth for the current financial year to be at the upper end of its 30-35% range.
Marine and aerospace engineer Babcock slipped, reversing earlier gains after saying its new financial year has begun well, with 82% of revenues for the full year already booked.
Still to come in the US, the producer price index and initial jobless claims are at 1330 BST.
FTSE 100 (UKX) 7,425.15 0.11%
FTSE 250 (MCX) 19,365.04 0.50%
techMARK (TASX) 3,494.35 0.01%
FTSE 100 - Risers
BT Group (BT.A) 300.40p 3.55%
Marks & Spencer Group (MKS) 325.80p 3.04%
Lloyds Banking Group (LLOY) 67.93p 2.86%
Next (NXT) 3,706.00p 2.43%
Barclays (BARC) 212.60p 2.21%
GKN (GKN) 336.00p 1.60%
Schroders (SDR) 3,270.00p 1.55%
Vodafone Group (VOD) 223.70p 1.47%
Aviva (AV.) 534.50p 1.42%
Taylor Wimpey (TW.) 179.80p 1.41%
FTSE 100 - Fallers
AstraZeneca (AZN) 4,966.00p -4.35%
Sage Group (SGE) 670.00p -1.76%
Convatec Group (CTEC) 296.10p -0.94%
Micro Focus International (MCRO) 2,003.00p -0.84%
Shire Plc (SHP) 4,234.50p -0.83%
Royal Dutch Shell 'B' (RDSB) 2,075.00p -0.81%
Royal Dutch Shell 'A' (RDSA) 2,062.00p -0.70%
Carnival (CCL) 5,120.00p -0.68%
BP (BP.) 448.05p -0.58%
Coca-Cola HBC AG (CDI) (CCH) 2,239.00p -0.53%
FTSE 250 - Risers
Carillion (CLLN) 63.05p 10.23%
JD Sports Fashion (JD.) 341.20p 4.18%
Dunelm Group (DNLM) 564.00p 3.49%
Ocado Group (OCDO) 282.70p 3.14%
TalkTalk Telecom Group (TALK) 187.80p 3.13%
IP Group (IPO) 134.00p 3.08%
Tullow Oil (TLW) 156.80p 3.02%
Pets at Home Group (PETS) 160.20p 2.43%
Ashmore Group (ASHM) 349.20p 2.40%
Galliford Try (GFRD) 1,286.00p 2.39%
FTSE 250 - Fallers
TBC Bank Group (TBCG) 1,616.00p -2.06%
McCarthy & Stone (MCS) 164.20p -1.68%
Petrofac Ltd. (PFC) 439.50p -1.66%
Domino's Pizza Group (DOM) 270.70p -1.38%
Kaz Minerals (KAZ) 580.00p -1.36%
Petra Diamonds Ltd.(DI) (PDL) 101.70p -1.36%
Hunting (HTG) 482.70p -1.21%
Safestore Holdings (SAFE) 412.00p -0.87%
Evraz (EVR) 231.60p -0.86%
Wizz Air Holdings (WIZZ) 2,561.00p -0.74%