London close: Stocks taper as sterling, commodity prices lose traction

UK stocks whimpered to a lower close on Friday as sterling lost traction on renewed Brexit fears and commodity prices headed south.

The spectre of the Lisbon Treaty's Article 50 rose once more, following a media report that claimed UK Prime Minister Theresa May was sympathetic to starting Britain's EU divorce by next April at the latest.

"The pound renewed its plunge into the red this Friday," said Spreadex financial analyst Connor Campbell in a note, referring to the media report. The ensuing pall saw sterling dive lower after lunch.

At about 16:16 BST, sterling was down 0.49% to $130.884, down 0.8% to 1.3062 yen and lower 0.48% to €1.1542. Same time, gold faltered 0.59% to $1349.20 an ounce.

Collectively, this dampened both the FTSE 100 and FTSE 250. Wall St was mostly lower, as were key indices in Europe.

Miners fell after Glencore, also hurt by Macquarie cutting its view on the shares to ‘neutral’ from ‘outperform,' albeit with a 200p target price, from 180p, ahead of its interims next week

KAZ Minerals nudged north as Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’ and lifted the price target to 250p from 165p, citing receding development risks.

Otherwise, blue-chip home builders were notable among fallers, piloted by Taylor Wimpey, Persimmon and Barratt Developments on jitters surrounding the UK housing market's outlook.

"The big question," wrote IG's Josh Mahony, "is whether sterling's fall will also drive renewed foreign interest in UK housing, thus mitigating any fears of a crash in house prices."

Overall, Mahony opined that it was clear the "overstretched nature of the FTSE means traders are happy to wait for another opportunity to buy the dips."

Both in the UK and across the Atlantic, all eyes are on next week's Jackson Hole speech by US Federal Reserve chair Janet Yellen, and pundits are already pondering what precisely that might bring.

"There is little space for manoeuvre, with any hawkish comment from Yellen likely to be seen through cynical eyes given the perception of can-kicking in 2016 to date," Mahony said.

Against this backcloth oil prices were mixed much of the day, but, by about 16:31 BST, West Texas Intermediate had shed 0.31% to $48.07 a barrel as Brent had lost 0.9% to $50.43 a barrel. This spurred Shell and BP's respective share prices lower.

On the economic front, UK public sector net borrowing hit a £1bn surplus in July, from £1.2bn a year ago, Office for National Statistics said. A surplus of £1.6bn was expected.

German producer prices ticked higher in July, Destatis said. The index of producer prices for industrial products was up 0.2% after a 0.4% rise in June and May. A 0.1% rise was expected.

Back to the stocks indices, other sectors heading south included pharmaceuticals, commercial property, consumer goods, leisure and utilities, among others.

Centrica advanced as Barclays raised its target price from 240p to 245p with an ‘equal weight’ rating, and separately Legal & General continued to slide a day after going ex-dividend.

EasyJet flew higher on rumours of a possible £16 a share takeover offer from private equity or founder Stelios Haji-Ioannou or a New York firm.

William Hill shares jumped after Rank and 888 Holdings quit their bid plans late Thursday, investors also liking the bookie's full-year operating profit guidance hike.

Market Movers

FTSE 100 (UKX) 6,858.95 -0.15%
FTSE 250 (MCX) 17,870.75 -0.00%
techMARK (TASX) 3,513.30 0.14%

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 55.24p 2.54%
easyJet (EZJ) 1,105.00p 2.50%
Centrica (CNA) 237.00p 1.41%
Morrison (Wm) Supermarkets (MRW) 194.50p 1.20%
InterContinental Hotels Group (IHG) 3,365.00p 1.17%
Sage Group (SGE) 735.50p 0.89%
Mediclinic International (MDC) 1,099.00p 0.83%
British American Tobacco (BATS) 4,868.50p 0.71%
Shire Plc (SHP) 5,065.00p 0.70%
London Stock Exchange Group (LSE) 2,889.00p 0.66%

FTSE 100 - Fallers

Glencore (GLEN) 189.15p -3.59%
Taylor Wimpey (TW.) 153.40p -2.48%
BHP Billiton (BLT) 1,054.00p -1.95%
Ashtead Group (AHT) 1,205.00p -1.95%
Standard Chartered (STAN) 624.80p -1.65%
Persimmon (PSN) 1,749.00p -1.58%
Worldpay Group (WI) (WPG) 300.60p -1.44%
Legal & General Group (LGEN) 205.90p -1.15%
Antofagasta (ANTO) 564.50p -1.14%
Anglo American (AAL) 870.00p -1.14%

FTSE 250 - Risers

Kaz Minerals (KAZ) 194.60p 8.11%
William Hill (WMH) 314.70p 3.83%
esure Group (ESUR) 263.90p 2.80%
Metro Bank (MTRO) 2,400.00p 2.78%
PayPoint (PAY) 1,005.00p 2.66%
Genus (GNS) 1,863.00p 2.64%
Diploma (DPLM) 888.00p 2.54%
Sophos Group (SOPH) 244.70p 2.51%
Go-Ahead Group (GOG) 1,913.00p 2.46%
Balfour Beatty (BBY) 260.00p 2.40%

FTSE 250 - Fallers

Ibstock (IBST) 165.90p -3.83%
JRP Group (JRP) 86.00p -3.37%
Cairn Energy (CNE) 203.40p -3.00%
Tullow Oil (TLW) 234.00p -2.34%
Pagegroup (PAGE) 346.70p -2.17%
International Personal Finance (IPF) 270.00p -2.10%
Evraz (EVR) 150.30p -2.08%
Redefine International (RDI) 43.63p -1.96%
Fidessa Group (FDSA) 2,511.00p -1.95%
IG Group Holdings (IGG) 943.50p -1.67%