London midday: FTSE drops as pound firms against dollar amid Trump worries
The FTSE 100 declined on Monday as the pound strengthened against the dollar following Donald Trump’s inauguration as US President and worries about his plans to redraw the global trade map.
At 1200 GMT, the index dropped 0.47% to 7,164.30 points.
The pound was up 0.59% against the dollar to $1.2448 as Trump’s inauguration speech on Friday offered insufficient details on his fiscal policies. Meanwhile, the Trump administration vowed in its revamped website to withdraw from the Trans-Pacific Partnership and renegotiate the North American Free Trade Agreement.
“Though Theresa May’s pair of speeches last week has helped sterling by somewhat clarifying Britain’s Brexit position, given that the currency is only up 0.2% against the euro it seems that Monday’s cable gains are more a case of dollar weakness than pound strength,” said Connor Campbell, financial analyst at Spreadex.
"The greenback, which also shed 0.4% against the euro and 0.8% against the Japanese yen, seems to have been shaken both by the apocalyptic tone set by Trump at his inauguration, and the global protests that greeted the former Apprentice host’s ascension to the highest office in the land."
Bank stocks were the biggest fallers on the FTSE after a survey of 103 financial services firms by business group CBI and accounting firm PwC showed optimism among the UK’s lenders and money managers fell for the fourth consecutive quarter. It marked the longest period of falling business sentiment since the worst days of the 2008 financial crisis.
The survey found that nine out of 10 cited Brexit as their main challenge.
Shares in Royal Bank of Scotland, Barclays, Lloyds Banking Group and HSBC Holdings were in the red.
Going the other way, mining shares were up as a weaker dollar gave gold prices a boost. Antofagasta, Fresnillo and Anglo American rallied.
Antofagasta was also lifted after Citigroup upgraded the stock to ‘buy’ from ‘neutral’ at a target price of 807p, saying the miner is set to benefit from lower taxes and sees improved free cash flow in the next decade.
Elsewhere, Paddy Power Betfair slumped after saying it would not hit its top-end targets after Donald Trump's unexpected US election win and many punter-friendly sporting results at the end of the year cost it around £40m.
Essentra declined after the maker of cigarette filters and plastic packaging warned that it expects profit will be below expectations due to operational issues at its health and personal care packaging unit.
Hochschild Mining was on the front foot as it reached an agreement with a local community at its Pallancata mine in Peru to allow the silver and gold mine to reopen this week.
Housebuilder Bovis Homes gained following a Sunday Times report that one of its larger shareholders has suggested Berkeley Group mount a bid for the company.
SSP Group was up on the back of a Jefferies upgrade to 'buy' on the group's "sizzling solid potential".
Market Movers
FTSE 100 (UKX) 7,168.60 -0.41%
FTSE 250 (MCX) 18,113.25 -0.21%
techMARK (TASX) 3,315.68 -0.83%
FTSE 100 - Risers
Antofagasta (ANTO) 787.50p 3.35%
Fresnillo (FRES) 1,444.00p 3.00%
Anglo American (AAL) 1,317.00p 2.13%
Capita (CPI) 523.00p 1.85%
Glencore (GLEN) 323.50p 1.62%
easyJet (EZJ) 1,058.00p 1.34%
TUI AG Reg Shs (DI) (TUI) 1,146.00p 1.24%
Randgold Resources Ltd. (RRS) 6,795.00p 1.19%
Smurfit Kappa Group (SKG) 2,202.00p 0.96%
Reckitt Benckiser Group (RB.) 6,877.00p 0.76%
FTSE 100 - Fallers
Paddy Power Betfair (PPB) 8,395.00p -3.23%
Royal Bank of Scotland Group (RBS) 216.80p -1.86%
Barclays (BARC) 223.50p -1.72%
Micro Focus International (MCRO) 2,087.00p -1.56%
HSBC Holdings (HSBA) 668.90p -1.40%
Sage Group (SGE) 634.50p -1.40%
BT Group (BT.A) 381.85p -1.37%
Marks & Spencer Group (MKS) 332.60p -1.36%
Next (NXT) 3,868.00p -1.33%
Lloyds Banking Group (LLOY) 64.26p -1.24%
FTSE 250 - Risers
Hochschild Mining (HOC) 240.00p 6.29%
SSP Group (SSPG) 412.20p 5.42%
Ferrexpo (FXPO) 134.90p 3.69%
Bovis Homes Group (BVS) 823.00p 3.26%
Kaz Minerals (KAZ) 422.70p 3.02%
Safestore Holdings (SAFE) 367.00p 2.14%
Vedanta Resources (VED) 1,015.00p 2.01%
Senior (SNR) 202.60p 1.76%
SIG (SHI) 106.90p 1.71%
G4S (GFS) 250.10p 1.58%
FTSE 250 - Fallers
Inmarsat (ISAT) 635.00p -3.20%
Virgin Money Holdings (UK) (VM.) 296.50p -2.79%
Hunting (HTG) 601.00p -2.67%
Essentra (ESNT) 430.90p -2.67%
Shawbrook Group (SHAW) 235.60p -2.64%
Greencore Group (GNC) 229.80p -2.63%
Jupiter Fund Management (JUP) 393.40p -2.38%
Aldermore Group (ALD) 210.70p -2.36%
Aberdeen Asset Management (ADN) 258.70p -2.19%
Pets at Home Group (PETS) 200.80p -2.14%