London midday: FTSE 100 sets fresh intraday record

Stocks were up around record levels by midday on Tuesday, with retailers putting in the best performance, amid profit-taking in oil and a weaker pound.

As of 1222 BST the FTSE 100 was up by 29.72 points or 0.42% to 7,127.22, having earlier set an intraday record at 7,128.03.

On a light day for economic data, all eyes were on central bank speakers and the gyrations of the pound on foreign exchange markets.

Speaking to the Treasury Select Committee, the Monetary Policy Committee’s newest member, Michael Saunders, said the Bank of England could “look through” the impact that Sterling’s fall might have on prices, even if it lasted for many years.

His remarks helped to staunch the bleeding in fixed income markets, sending yields on the benchmark 10-year Gilt lower by five basis points to 0.97%.

However, Saunders also said further weakness in Sterling would not surprise him and the pound duly obliged, retreating 0.78% to 1.2264.

Acting as a backdrop, referencing leaked documents The Times reported that a ‘hard Brexit’ could cost the Treasury up to £66bn a year in lost tax revenues.

The documents suggested that a hard Brexit, involving leaving the EU single market and moving to World Trade Organisation rules, would cause GDP to fall by about 9.5%, in comparison to if the country stayed in the EU.

Speaking overnight, the president of the US Federal Reserve bank of Chicago, Charles Evans, said progress on meeting the central bank's inflation target had been "unsatisfactory", which might indicate that a December rate hike is not quite yet a done deal.

UK data emerged from the British Retail Consortium on Tuesday, which showed like-for-like retail sales grew by 0.4% month-on-month in September, after a fall of 0.9% in August (consensus: -0.3%).

Nonetheless, economists at Pantheon Macroeconomics said: "We continue to think, however, that a sharp slowdown in retail sales growth lies ahead, as firms reduce hiring and inflation soars. Indeed, sterling’s further depreciation over the last week suggests that goods prices will shoot up next year, reducing growth in retail sales volumes to a near-standstill."

The economic calendar was otherwise quite sparse.

Clothing retailers put in strong performance

In corporate news, profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter.

The interim dividend was held flat as the company revealed the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".

Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.

In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.

With these bullish reports allied to the BRC data and cooler weather, Next topped the FTSE 100 leaderboard.

Mid-caps dominated the news, with plastics group Victrex reporting an improved second half, but full year sales still shrank due to consumer electronics weakness that is expected to persist.

Retirement housebuilder McCarthy & Stone was higher on the back of improved trading in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years.

Market Movers

FTSE 100 (UKX) 7,128.76 0.44%
FTSE 250 (MCX) 18,117.76 0.77%
techMARK (TASX) 3,594.22 0.48%

FTSE 100 - Risers

Next (NXT) 4,731.00p 4.34%
Whitbread (WTB) 3,904.00p 3.61%
Marks & Spencer Group (MKS) 331.60p 3.14%
Travis Perkins (TPK) 1,471.00p 2.94%
Burberry Group (BRBY) 1,516.00p 2.50%
Royal Bank of Scotland Group (RBS) 182.90p 2.41%
Taylor Wimpey (TW.) 147.10p 2.29%
Coca-Cola HBC AG (CDI) (CCH) 1,864.00p 1.91%
Barratt Developments (BDEV) 479.60p 1.87%
ITV (ITV) 176.60p 1.79%

FTSE 100 - Fallers

Old Mutual (OML) 200.70p -4.11%
Mediclinic International (MDC) 904.00p -1.53%
Capita (CPI) 589.50p -1.50%
Mondi (MNDI) 1,681.00p -0.65%
Shire Plc (SHP) 5,289.00p -0.64%
Micro Focus International (MCRO) 2,235.00p -0.62%
Tesco (TSCO) 201.85p -0.62%
Provident Financial (PFG) 3,140.00p -0.57%
Babcock International Group (BAB) 985.00p -0.51%
3i Group (III) 669.50p -0.45%

FTSE 250 - Risers

Brown (N.) Group (BWNG) 201.00p 14.27%
Victrex plc (VCT) 1,743.00p 7.46%
McCarthy & Stone (MCS) 175.00p 7.36%
Millennium & Copthorne Hotels (MLC) 455.80p 5.75%
Ted Baker (TED) 2,536.00p 5.01%
Euromoney Institutional Investor (ERM) 1,033.00p 4.87%
Pagegroup (PAGE) 365.00p 4.64%
Sports Direct International (SPD) 282.50p 4.44%
Hunting (HTG) 557.50p 4.40%
PayPoint (PAY) 1,046.00p 3.67%

FTSE 250 - Fallers

Centamin (DI) (CEY) 150.60p -3.09%
Hochschild Mining (HOC) 259.00p -3.07%
Greencore Group (GNC) 303.00p -1.81%
Booker Group (BOK) 172.40p -1.37%
St. Modwen Properties (SMP) 259.70p -1.37%
esure Group (ESUR) 293.00p -1.35%
AA (AA.) 268.40p -1.32%
Meggitt (MGGT) 463.40p -1.28%
Paragon Group Of Companies (PAG) 315.70p -1.16%
BGEO Group (BGEO) 2,980.00p -1.00%