London midday: Stocks climb as pound slides after industrial and manufacturing data

London stocks climbed on Wednesday as investors weighed industrial and manufacturing data and awaited remarks from Bank of England Governor Mark Carney.

UK industrial production rose 0.1% on the month in July, according to the Office for National Statistics, beating expectations for a 0.2% decline.

In contrast, manufacturing output declined 0.9% in July, worse than the 0.3% fall anticipated by economists.

“The FTSE managed to eke out a meagre 0.1% rise this morning despite the fact that manufacturing production hit a 5 month nadir of -0.9% (industrial production was a bit better, unexpectedly remaining unchanged at 0.1%),” said Connor Campbell, financial analyst at Spreadex.

“That is because the pound took the brunt of the bad news, with sterling slipping 0.6% against the dollar and 0.4% against the euro, taking it back below the 1.34 and 1.19 it had recently crossed.”

The attention now turns to Carney’s testimony to the Treasury Select Committee at 1415 BST on the 4 August Inflation Report. Carney will likely be questioned over the reasoning behind the BoE’s decision last month to cut interest rates and boost asset purchases, particularly given the resilience the economy has shown since the Brexit vote.

“The inflation report hearing is often an uncomfortable occasion for Carney but today is likely to be a gruelling affair due to his position prior to the Brexit vote and the central bank’s policy response in the aftermath of the event,” said Craig Erlam, senior market analyst at Oanda.

“The BoE’s independence has repeatedly been called into question by Brexit campaigners, unsurprising considering he was of many warning about the economic risks of voting to leave the EU, and now he must face some of those that have been most forthcoming in their criticism of him and his leadership.”

In corporate news, Sports Direct tumbled after saying it expects earnings to fall 21% this year but adding that, contrary to much media speculation, founder Mike Ashley was not planning to take the company private any time soon.

Weir Group gained after Morgan Stanley upgraded its recommendation on the engineering company to 'overweight' from ‘equal weight’ while maintaining its target price of 2,000p.

Housebuilder and property developer Barratt Developments was weaker as it said total completions in the year to the end of June rose 5.3% to 17,319 and revenue rose 12.7% to £4.24bn, with profit from operations up 15.9% to £668.4m.

Hargreaves Lansdown was also in the red despite the investment management firm reporting a jump in full-year profit as asset under administration grew. The company also announced on Wednesday that its chief executive Ian Gorham was stepping down.

Industrial equipment rental company Ashtead Group advanced after it said revenue increased as it benefited from weak sterling in the first quarter, while it expects full-year results to be ahead of expectations.

Market Movers

FTSE 100 (UKX) 6,835.37 0.14%
FTSE 250 (MCX) 18,027.90 0.14%
techMARK (TASX) 3,457.05 0.08%

FTSE 100 - Risers

Ashtead Group (AHT) 1,336.00p 6.20%
Royal Dutch Shell 'A' (RDSA) 1,895.00p 1.77%
Randgold Resources Ltd. (RRS) 7,730.00p 1.58%
Royal Dutch Shell 'B' (RDSB) 1,969.00p 1.57%
BP (BP.) 433.40p 1.34%
SSE (SSE) 1,567.00p 1.29%
Smiths Group (SMIN) 1,389.00p 1.24%
Whitbread (WTB) 4,273.00p 1.23%
WPP (WPP) 1,819.00p 1.22%
GKN (GKN) 326.50p 1.08%

FTSE 100 - Fallers

Worldpay Group (WI) (WPG) 285.00p -3.19%
Rolls-Royce Holdings (RR.) 755.00p -2.45%
Persimmon (PSN) 1,827.00p -2.30%
Berkeley Group Holdings (The) (BKG) 2,720.00p -2.26%
Barratt Developments (BDEV) 497.30p -1.91%
Severn Trent (SVT) 2,407.00p -1.67%
Taylor Wimpey (TW.) 160.90p -1.65%
Hikma Pharmaceuticals (HIK) 2,172.00p -1.32%
Centrica (CNA) 233.40p -1.31%
Lloyds Banking Group (LLOY) 57.39p -1.19%

FTSE 250 - Risers

Vectura Group (VEC) 142.00p 11.90%
Weir Group (WEIR) 1,618.00p 4.79%
Metro Bank (MTRO) 2,594.00p 4.39%
OneSavings Bank (OSB) 270.20p 3.80%
CLS Holdings (CLI) 1,598.00p 3.70%
Evraz (EVR) 137.60p 3.46%
Drax Group (DRX) 315.80p 2.77%
CYBG (CYBG) 274.90p 2.46%
Shawbrook Group (SHAW) 234.50p 2.31%
International Personal Finance (IPF) 277.80p 2.28%

FTSE 250 - Fallers

CMC Markets (CMCX) 243.40p -12.16%
Sports Direct International (SPD) 314.00p -10.18%
IG Group Holdings (IGG) 898.00p -4.97%
Just Eat (JE.) 550.00p -3.42%
Thomas Cook Group (TCG) 72.55p -3.01%
Ascential (ASCL) 257.80p -2.94%
Synthomer (SYNT) 359.40p -2.58%
Entertainment One Limited (ETO) 215.00p -2.27%
Redrow (RDW) 410.20p -1.98%
Aberforth Smaller Companies Trust (ASL) 1,036.00p -1.80%