London midday: Stocks down after Fed minutes; Trump-Xi meeting eyed

London stocks were down but off lows by midday on Thursday as investors digested news that the Federal Reserve is ready to start cutting its balance sheet before the end of the year.

The FTSE 100 was down 0.4% to 7,302.64, while the pound was 0.3% weaker versus the dollar at 1.2454.

The minutes from the March meeting, during which officials approved a quarter-point interest rate hike, revealed that the Fed plans to start shedding the $4.5trn in bonds it is holding on its balance sheet this year. The minutes stated that the reductions should be “gradual and predictable” through the “phasing out” of reinvestments, meaning the Fed won't just stop repurchasing all debt instruments when they mature.

Although no details were given about amounts, policy makers suggested the unwinding would begin "later this year".

Chris Beauchamp, chief market analyst at IG, noted that the FTSE 100 bumped down against the key 7,260 level in early trading, an area that has been heavily defended by the bulls several times over the past few weeks.

"After US markets suffered a rapid handbrake turn the atmosphere is febrile, to say the least. The Fed is now openly discussing how to begin unwinding its crisis-era measures; we all knew this day would come, but with Mr Trump still settling into his role it may seem to some that the Fed is getting ahead of itself.

"To its credit, the US central bank has managed to get everyone to live with the idea of gradually rising rates, and now it needs to communicate the message that the withdrawal of the famous ‘punch bowl’ will be done in a similarly careful fashion," he said.

Investors were also eyeing a two-day summit between Donald Trump and Chinese President Xi Jinping, which kicks off in Florida later on Thursday, and the release of the non-farm payrolls report on Friday.

On the UK corporate front, Legal & General fell after saying it had completed the sale of its Netherlands unit to Chesnara for €161m (£137.6m).

Budget airline easyJet nudged lower as it reported a 10.6% increase in passenger numbers for March to 6.33m, while the load factor – which gauges how full the planes actually are – rose 1.4 percentage points to 92.7%.

Ferrexpo slumped as it posted a decline in iron ore pellet production during the first quarter of 2017 as a result of scheduled pellet line maintenance in the first two months of the year.

Polymer maker Victrex retreated after announcing the acquisition of Zyex, a manufacturer of polyetheretherketone (PEEK) based fibres for the aerospace, automotive and industrial markets, for £10m in order to explore 3D printing capabilities.

Unilever advanced as it said that alongside new plans to "go faster and further" with its restructuring programme, it has upped its annual dividend guidance and launched a €5bn share buyback. It also confirmed it will sell off its spreads business.

British Land gained ground after Exane BNP Paribas upped the stock to 'outperform' from 'neutral'.

HomeServe rallied after saying full-year results are anticipated to be at the upper end of market expectations thanks to strong momentum in the business. The range of analyst forecasts for adjusted pre-tax profit for the year is £105m to £112m.

Electrocomponents was also in the black after it said results for the year to the end of March 2017 are likely to be ahead of its previous expectations, with pre-tax profit ahead of the current market consensus range of between £122.3m and £124.2m, following a strong final quarter.

Go-Ahead was boosted by an upgrade at Liberum, while Countryside Properties and Redrow were lifted by upgrade from JP Morgan Cazenove, but Bovis Homes was hit by a downgrade from the same outfit.

Aviva, Lloyds, Electra Private Equity, Vesuvius, Sanne, and Berendsen all went ex-dividend on Thursday.

Education publisher Pearson was also under the cosh as it went ex-dividend and following a downbeat note by Exane BNP Paribas.

Market Movers

FTSE 100 (UKX) 7,302.64 -0.40%
FTSE 250 (MCX) 19,057.94 -0.06%
techMARK (TASX) 3,428.98 -0.24%

FTSE 100 - Risers

British Land Company (BLND) 632.50p 1.69%
Anglo American (AAL) 1,260.50p 1.57%
Land Securities Group (LAND) 1,086.00p 1.40%
Unilever (ULVR) 3,989.50p 1.27%
Antofagasta (ANTO) 863.50p 1.23%
easyJet (EZJ) 1,028.00p 1.08%
Fresnillo (FRES) 1,591.00p 1.08%
Randgold Resources Ltd. (RRS) 7,160.00p 0.92%
Persimmon (PSN) 2,119.00p 0.90%
BHP Billiton (BLT) 1,287.50p 0.78%

FTSE 100 - Fallers

Pearson (PSON) 625.00p -8.42%
Aviva (AV.) 513.00p -3.12%
Lloyds Banking Group (LLOY) 63.62p -2.86%
Paddy Power Betfair (PPB) 8,410.00p -2.04%
St James's Place (STJ) 1,033.00p -1.90%
WPP (WPP) 1,709.00p -1.73%
Next (NXT) 4,041.00p -1.65%
GKN (GKN) 351.30p -1.57%
Sky (SKY) 958.00p -1.44%
AstraZeneca (AZN) 4,789.50p -1.40%

FTSE 250 - Risers

Homeserve (HSV) 615.50p 8.65%
Tullow Oil (TLW) 209.50p 6.13%
IP Group (IPO) 145.20p 4.24%
Electrocomponents (ECM) 496.20p 3.50%
BTG (BTG) 610.50p 3.47%
Countryside Properties (CSP) 252.30p 3.23%
Restaurant Group (RTN) 343.70p 2.75%
McCarthy & Stone (MCS) 187.10p 2.58%
Go-Ahead Group (GOG) 1,736.00p 2.54%
Redrow (RDW) 526.50p 2.53%

FTSE 250 - Fallers

Electra Private Equity (ELTA) 2,420.00p -52.64%
Allied Minds (ALM) 170.10p -8.05%
Berendsen (BRSN) 746.50p -3.05%
Brewin Dolphin Holdings (BRW) 316.90p -2.28%
Ashmore Group (ASHM) 358.20p -2.24%
Pets at Home Group (PETS) 175.10p -2.01%
Diploma (DPLM) 1,076.00p -2.00%
Moneysupermarket.com Group (MONY) 325.50p -1.96%
Hunting (HTG) 579.00p -1.95%
Metro Bank (MTRO) 3,434.00p -1.91%