London midday: Gains limited as StanChart, Lloyds and BG Group drop

UK stocks advanced on Tuesday morning with the FTSE 100 bouncing off a one-week low, but gains were limited by some heavy falls from Standard Chartered, Lloyds Banking Group and BG Group.

A profit warning from StanChart saw shares in the emerging-markets lender drop around 10%, while Lloyds underwhelmed with a jump in third-quarter earnings and BG missed forecasts with its quarterly report.

Nevertheless, decent gains in the heavyweight mining sector were helping the Footsie keep its head above water, with the index up 0.5% at 6,398 by midday.

The UK index closed at 6,363.46 on Monday, its lowest finish since 20 October, after weak business confidence figures from Germany and the results of bank stress-tests in Europe dampened sentiment.

Meanwhile, Wall Street indices closed broadly flat after weak US services and pending-home sales data, as well as a subdued reading of manufacturing activity in Dallas. The S&P 500 finished 0.1% lower after rising 4.1% last week, its best weekly performance this year.

Looking ahead, investors were readying themselves for Wednesday's Federal Open Market Committee decision, at which US policymakers are expected to bring their third round of quantitative easing (QE) programme to an end.

While the withdrawal of stimulus would normally be negative for markets, trader Jonathan Sudaria from Capital Spreads said the "bulls are seeing a silver lining".

He continued: "The last time the Fed pulled the plug on QE1 and 2, equities plunged so to prevent a repeat, the bulls will be hoping for something extremely dovish in the statement to placate the urge to dump risky assets."

StanChart, Lloyds and BG fall

Shares in banking counterpart Standard Chartered dropped after the company reported a 16% decline in operating profit in the third quarter and said that full-year earnings would be lower than last year.

Underlying profits were higher than expected at Lloyds Banking Group, rising 44% year-on-year in the third quarter, but shares fell as analysts raised concerns about further PPI impairment charges and the outlook for the UK housing market.

Banking peers RBS and Barclays were also out of favour by midday, erasing earlier gains.

Lower prices and higher costs led to a worse-than-expected 26% drop in adjusted profits at BG Group in the third quarter despite higher revenues, pushing the stock lower.

In contrast, mining stocks were making gains with blue chips Anglo American, Glencore, BHP Billiton and Rio Tinto among the best performers.

BP reported that profits fell by almost a fifth in the third quarter, but the stock edged higher after the oil major still beat the market's expectations and said it was "well on track" to hit its targets this year.

Shares of Synthomer sank after the chemicals company delivered a profit warning to investors, saying that the demand momentum in Europe seen earlier in the year had tailed off. The FTSE 250 company, which develops polymers for consumer products, now expected full-year pre-tax profit to be "slightly below current consensus".

Market Movers

techMARK 2,704.26 +0.60%
FTSE 100 6,397.80 +0.54%
FTSE 250 15,120.95 +0.54%

FTSE 100 - Risers
Anglo American (AAL) 1,331.50p +2.70%
Dixons Carphone (DC.) 389.20p +2.66%
Aberdeen Asset Management (ADN) 410.90p +2.49%
Vodafone Group (VOD) 202.55p +2.45%
Royal Mail (RMG) 454.50p +2.41%
Glencore (GLEN) 320.00p +2.35%
Mondi (MNDI) 1,010.00p +2.33%
Smith & Nephew (SN.) 999.50p +2.20%
Coca-Cola HBC AG (CDI) (CCH) 1,352.00p +1.96%
St James's Place (STJ) 686.50p +1.78%

FTSE 100 - Fallers
Standard Chartered (STAN) 990.70p -9.53%
Lloyds Banking Group (LLOY) 73.10p -2.97%
BG Group (BG.) 1,027.00p -1.53%
Burberry Group (BRBY) 1,479.00p -1.33%
Royal Bank of Scotland Group (RBS) 355.40p -1.06%
Barclays (BARC) 220.40p -0.65%
InterContinental Hotels Group (IHG) 2,262.00p -0.26%
IMI (IMI) 1,174.00p -0.17%
Marks & Spencer Group (MKS) 407.40p -0.12%
Next (NXT) 6,405.00p -0.08%

FTSE 250 - Risers
Bank of Georgia Holdings (BGEO) 2,594.00p +3.76%
Afren (AFR) 95.00p +3.26%
Hays (HAS) 121.30p +2.71%
Brit (BRIT) 245.40p +2.59%
Debenhams (DEB) 63.35p +2.59%
Cairn Energy (CNE) 154.80p +2.38%
Renishaw (RSW) 1,705.00p +2.34%
Polymetal International (POLY) 484.00p +2.28%
Hochschild Mining (HOC) 109.90p +2.23%
Ocado Group (OCDO) 233.30p +2.15%

FTSE 250 - Fallers
Synthomer (SYNT) 198.00p -6.95%
Morgan Advanced Materials (MGAM) 276.90p -3.25%
Petra Diamonds Ltd.(DI) (PDL) 165.10p -2.94%
AO World (AO.) 161.50p -1.70%
Senior (SNR) 253.60p -1.44%
SIG (SHI) 148.20p -1.40%
Micro Focus International (MCRO) 979.00p -1.36%
Synergy Health (SYR) 1,777.00p -1.28%
Moneysupermarket.com Group (MONY) 188.30p -1.21%
Lonmin (LMI) 176.20p -1.18%