London midday: Footsie holds on to gains as markets monitor data, geopolitics

Stocks were holding higher come midday after Wednesday's night's Fed minutes and ahead of a smattering of US economic data due out in the afternoon, despite some sobering headlines on the geopolitical front.

As of 11:50 the FTSE 100 index was up by 82.65 points, or 1.32%, taking it to 6,361.61, with similar gains evident on the Continent.

Front-month Brent crude futures had also pushed a tad higher, they were gaining 1.03% to $44.60 per barrel in ICE trading.

The yield on the benchmark 10-year Gilt was steady versus the start of the session, at 1.91%.

Cable was still higher by 0.23% to 1.5272, despite a weaker than expected retail sales report for November.

US still opposed to al-Assad

Speaking from Manila, US president Obama reiterated the only way his country would coordinate attacks in Syria with Russia was if it refocused its own attacks against ISIS.

So far, Russian strikes have not been focused on Islamic State, he said, according to Bloomberg.

Obama also repeated his stance against Syrian leader al-Assad taking part in the post-conflict political process.

“It’s because it is unimaginable that you can stop the civil war there when the overwhelming majority of people in Syria consider him to be a brutal, murderous dictator,” he said. “He cannot regain legitimacy.”

Fed likely to raise rates in December

The summary of US rate-setters' debate about whether or not raise rates in October had a less hawkish bias to it than had been anticipated, leaving the door open to a tightening of monetary policy in December but seemingly also implying a shallower path of rate rises would follow thereafter, market watchers seemed to agree.

"The minutes suggest that the committee remains divided. However, since the time of the October meeting, we see them as having reached a broad consensus on a December rate hike," economists at Barclays said following the release of the minutes.

Deutsche Bank was of a similar view, but added: "This doesn't mean to say that a hike wouldn't be a policy error and it'll be too early to conclude on this for sometime. Monetary policy works with a lag that can be around 1-2 years and we worry that with global nominal growth still so low, the Fed has left it rather late in the cycle to be hiking. In our minds we still see 2017-2018 as potential recessionary years which fits with the above."

Retail sales miss forecasts, but nothing serious

UK retail sales figures for October revealed a decline of 0.6% month-on-month. Economists had expected a 0.5% drop month-on-month following a surge in September.

"Below our expectations, but broadly in line with market expectations. Our baseline remains that private consumption growth should slow down slightly to +0.6% q/q in Q4 after +0.7% q/q in Q3," economists at Barclays said by way of reaction to the data.

To take note of, analysts at FC Stone told Bloomberg that the price of copper could slide a further 17% by next year,
“It’s grim-to-bleak, so the onus is on the supply side. The market needs to transition to a lower price point to force more cuts,” analyst Ed Meir told the newswire.

FTSE 100: Johnson Matthey shows investors the money

Steady sailing was the theme for Johnson Matthey on Thursday morning, as it released its half-year results showing underlying revenue at the specialty chemicals firm was up 20% on the previous period, with sales up 5% to £1.588bn. The company announced it would return £305m to shareholders via a special dividend, more than the roughly £250m some analysts had penciled in.

Building materials group CRH said sales in the nine months to the end of September rose 16% from last year, as it reiterated its guidance that 2015 will be a year of growth thanks to continued positive momentum in the Americas. Cumulative sales from continuing operations increased to €15.5bn (£10.8bn), while earnings before interest, taxes, depreciation and amortisation were up 34% to €1.5bn.

Meggitt has won a multi-million dollar contract to provide the cargo smoke detection system (CSDS) for the Boeing 777X aircraft. The company did not give a specific value on the contract. Production will start in 2017 from Meggitt's facility in Simi Valley, California to meet entry into service in 2019.

Australia’s competition watchdog has approved the proposed merger of Royal Dutch Shell and BG Group, leaving just two more major regulatory hurdles and shareholder approval of both companies. The Australian Competition and Consumer Commission (ACCC) rubber-stamped Shell’s $47bn cash and share takeover offer of BG Group late on Thursday morning (Wednesday night UK time).

Revenues were flat at Royal Mail in the first half as UK and European parcel growth offsett letters weakness, while the focus on costs saw group operating profit flat. Adjusted profit before tax down 16.4%.

FTSE 250: Poundland weighed down by poor results, Qinetiq up

Poundland shares were pounded after a poor half-year result. The single-price retailer’s underlying results for the period ended 27 September were largely disappointing, with like-for-like sales down 2.8% and EBITDA down 18.5% to £16.5m. Pre-tax profits were down a sizeable 26.3% to £9.3m in the period.

Half year profits rose at Defence products group QinetiQ despite a severe fall in its order intake during the period. The company said pretax profits rose to £48.3m from £44.4m last time with revenues up to £370.9m from £365.6m.

Shares in Bovis Homes Group slumped almost 10% early on Thursday after the home builder revealed its mix of homes for 2015 will be more weighted to existing sites than previously expected.

Domino’s Pizza has announced chief financial officer Paul Doughty is leaving the company and stepping down from the board at the end of the year.The company said he had tendered his resignation after just five months in the role.

Market Movers

FTSE 100 (UKX) 6,364.46 1.36%
FTSE 250 (MCX) 17,191.78 0.60%
techMARK (TASX) 3,181.84 1.06%

FTSE 100 - Risers

Johnson Matthey (JMAT) 2,666.00p 8.51%
CRH (CRH) 1,883.00p 5.91%
Royal Mail (RMG) 479.20p 5.50%
Glencore (GLEN) 97.04p 4.00%
Randgold Resources Ltd. (RRS) 4,086.00p 3.89%
Anglo American (AAL) 465.40p 3.55%
Antofagasta (ANTO) 516.50p 3.30%
BHP Billiton (BLT) 909.00p 3.21%
Royal Dutch Shell 'A' (RDSA) 1,687.50p 2.90%
Compass Group (CPG) 1,085.00p 2.75%

FTSE 100 - Fallers

Persimmon (PSN) 1,826.00p -2.09%
Berkeley Group Holdings (The) (BKG) 3,076.00p -2.01%
Imperial Tobacco Group (IMT) 3,525.00p -1.26%
Barratt Developments (BDEV) 574.00p -0.61%
Taylor Wimpey (TW.) 184.60p -0.59%
Vodafone Group (VOD) 223.35p -0.29%
Rolls-Royce Holdings (RR.) 541.50p -0.28%
Whitbread (WTB) 4,499.00p -0.02%
Burberry Group (BRBY) 1,282.00p 0.00%
Morrison (Wm) Supermarkets (MRW) 154.50p 0.00%

FTSE 250 - Risers

QinetiQ Group (QQ.) 254.00p 7.76%
Investec (INVP) 542.00p 6.07%
Nostrum Oil & Gas (NOG) 360.40p 4.62%
Drax Group (DRX) 226.40p 4.28%
Senior (SNR) 242.00p 4.04%
Acacia Mining (ACA) 168.10p 3.70%
Premier Oil (PMO) 77.15p 3.56%
Kaz Minerals (KAZ) 93.55p 3.54%
Petra Diamonds Ltd.(DI) (PDL) 60.00p 3.54%
Atkins (WS) (ATK) 1,529.00p 3.45%

FTSE 250 - Fallers

Poundland Group (PLND) 230.60p -17.23%
Bovis Homes Group (BVS) 907.00p -8.29%
Virgin Money Holdings (UK) (VM.) 351.70p -5.96%
Spire Healthcare Group (SPI) 285.30p -5.15%
Aldermore Group (ALD) 263.30p -4.95%
TalkTalk Telecom Group (TALK) 230.80p -4.67%
Paragon Group Of Companies (PAG) 405.00p -3.89%
Crest Nicholson Holdings (CRST) 502.00p -2.52%
Redefine International (RDI) 52.75p -2.31%
Ophir Energy (OPHR) 94.75p -2.27%