London midday: FTSE flattens off as investors sit on sidelines

The FTSE 100 maintained its small lead by midday on Wednesday as, although polls showed the EU referendum remained too close to call, rallying housebuilding and financials stocks indicated investors were confident the status quo would be maintained.

The Footsie saw earlier heights trimmed to stand at just over 6,251, a 0.4% gain for the session so far, with the mid-cap FTSE 250 index recovering some of its initial losses to reach a virtually flat 16,968.

Sterling was up 0.2% the dollar at 1.4684 but down 0.26% versus the euro at 1.2997, with three Brexit opinion polls due out in late afternoon and the evening offering the potential for some sharper forex movements.

Market analyst Connor Campbell at Spreadex said there was "not much action" as investors choose to "sit on the side-lines rather than risk taking any particular position ahead of tomorrow’s referendum".

He added: "While the general tone of the market suggests a quiet confidence in Vote Remain prevailing come Friday morning, there are still enough nerves to prevent the kind of super-surge seen on Monday.

"At the same time today’s trading is a far cry from the panicky scenes that greeted a potential Grexit last year, capturing the distinct difference between how investors are judging the likelihood of Britain opting to leave the EU and the seriousness of Greece’s flirtation with an enforced exit in 2015.

Despite the strong dollar, oil prices appreciated, with West Texas up 0.8% to $50.25 a barrel and Brent crude firming 0.6% to $50.93. At 1530 BST, the US Energy Information Administration will release its weekly crude oil stockpiles report.

Overnight, US Federal Reserve Chair Janet Yellen told the Senate that a rate rise could be "appropriate in the coming months".

"But Yellen has said 'rate hike in the coming months' since the turn of the year," observed Mike Van Dulken of Accendo Markets. "And in aggregate she took a rather cautious tone. Note also that while she said a Brexit vote might not result in a US recession, ECB President Draghi said he is prepared for all eventualities come Friday."

Yellen is due to provide testimony again on Wednesday but is not expected to say anything different.

In corporate news, department store chain Debenhams slipped lower after it revealed like-for-like sales fell in the third quarter and gross profit margins is likely to be flatter than previously thought. LFL sales were down 0.2% and full year profits are likely to be within the range of analyst forecasts, which many investors took to mean "at the bottom of the range".

Housebuilders Taylor Wimpey, Persimmon, Berkeley and Barratt Developments, all of which have been hit hard by concerns about the EU referendum, were among risers.

RSA Insurance, bolstered by a strong write-up from Barclays analysts, was at the top of the leaderboard, dragging peers Direct Line and Admiral and financial services group Hargeaves Lansdown, also indicating confidence about the result of Thursday's vote.

Shares in Associated British Foods were under the cosh after analysts at Morgan Stanley cut their stance on the stock and slashed the price target to 2,650p from 3,500p after taking a fresh look at Primark. The bank said that while Primark remains a great fast-fashion retail chain with attractive long-term growth prospects, its like-for-like sales have slowed to zero over the last 18 months or so.

Specialty chemicals company Elementis was a big faller after it issued a profit warning ahead of its interim results due to slower chromium sales. The FTSE 250 firm said that, as previously indicated, sales and contribution margins from the division in North America for the first six months of the year are expected to be similar to the prior year.

Market Movers

FTSE 100 (UKX) 6,251.55 0.40%
FTSE 250 (MCX) 16,967.96 -0.07%
techMARK (TASX) 3,043.14 -0.01%

FTSE 100 - Risers

RSA Insurance Group (RSA) 485.20p 2.32%
Anglo American (AAL) 670.00p 1.78%
Taylor Wimpey (TW.) 188.80p 1.72%
Pearson (PSON) 878.50p 1.62%
Travis Perkins (TPK) 1,898.00p 1.55%
Glencore (GLEN) 148.35p 1.54%
Persimmon (PSN) 2,077.00p 1.52%
Hargreaves Lansdown (HL.) 1,347.00p 1.51%
Morrison (Wm) Supermarkets (MRW) 190.10p 1.49%
Old Mutual (OML) 190.60p 1.49%

FTSE 100 - Fallers

Associated British Foods (ABF) 2,808.00p -3.21%
Antofagasta (ANTO) 426.30p -1.55%
Marks & Spencer Group (MKS) 360.30p -1.02%
Coca-Cola HBC AG (CDI) (CCH) 1,411.00p -0.84%
Fresnillo (FRES) 1,209.00p -0.74%
easyJet (EZJ) 1,511.00p -0.59%
Ashtead Group (AHT) 1,031.00p -0.58%
Rolls-Royce Holdings (RR.) 628.50p -0.40%
Shire Plc (SHP) 3,961.00p -0.38%
Next (NXT) 5,445.00p -0.37%

FTSE 250 - Risers

Circassia Pharmaceuticals (CIR) 104.80p 8.04%
Countrywide (CWD) 349.50p 3.10%
Safestore Holdings (SAFE) 399.50p 2.94%
FirstGroup (FGP) 100.70p 2.76%
Ocado Group (OCDO) 251.00p 2.28%
BGEO Group (BGEO) 2,603.00p 2.12%
Pets at Home Group (PETS) 262.40p 2.06%
Vesuvius (VSVS) 341.40p 1.91%
Shawbrook Group (SHAW) 287.30p 1.81%
Softcat (SCT) 366.60p 1.81%

FTSE 250 - Fallers

Elementis (ELM) 210.20p -7.16%
Domino's Pizza Group (DOM) 995.50p -4.46%
Synthomer (SYNT) 340.20p -4.44%
Debenhams (DEB) 71.05p -4.31%
AO World (AO.) 156.70p -2.73%
Essentra (ESNT) 527.00p -2.41%
IP Group (IPO) 157.20p -2.36%
Indivior (INDV) 224.20p -2.31%
Entertainment One Limited (ETO) 168.50p -2.26%
Greggs (GRG) 1,059.00p -2.22%