London midday: Stocks edge higher as retailers get a broker boost

London stocks had edged up by midday, helped by strength in the retail sector and a solid update from housebuilder Barratt Developments making up for a gloomy reading on the advertising sector from ITV.

The FTSE 100 was up 0.3% to 7,362.07, while the pound was 0.1% firmer at $1.2946, edging back from its brief push towards $1.30 as investors eyed the latest rate announcement from the Bank of England on Thursday, and as the dollar was weighed by US President Trump's surprise firing of FBI director James Comey.

Analysts at currency broker Monex said a that a BoE move towards tighter policy is hardly likely, but the Inflation Report will offer the bank the chance to revise its outlook for the economy, potentially in a slightly more hawkish direction given resilient economic growth, rising inflation, and an improving labour market.

Retailers put in a solid performance, boosted by a series of positive broker notes. Next was up following an upgrade to 'buy' from 'hold' at Investec, while Marks & Spencer was lifted after Deutsche Bank upped its price target on the stock and Primark owner Associated British Foods was bumped up to 'buy' from 'hold' at Citigroup.

Elsewhere, housebuilder Barratt Developments rallied after saying it expects pre-tax profit for the full year 2017 to be at the top end of current analyst estimates of between £675m and £733m and that completions will hit their highest level in nine years, coming in at around 17,350.

Barclays was in positive territory after chief executive Jes Staley apologised to shareholders for his attempts to identify an internal whistleblower, which led to the bank being investigated by the Financial Conduct Authority and the Prudential Regulation Authority. He also said the bank does not currently see a need to shift British jobs or significant operations elsewhere.

Catering company Compass edged higher after it reported a rise in first-half revenue as it benefited from a weaker pound and announced a £1bn special dividend.

Defence contractor BAE Systems nudged higher as it said it has started the year with good momentum and that trading is in line with its expectations, while Vesuvius surged after an upbeat trading update.

Engineer Renishaw was just a touch firmer as it lifted its full-year revenue and profit forecasts for the second time this year, while Marshalls racked up healthy gains as it said revenue in the four months to the end of April was up 6% to £135m.

Transport operator National Express was little changed after saying it remains on target to deliver its profit expectation and free cash flow and leverage targets for the year.

On the downside, ITV was in the red after it said advertising revenue fell in the first quarter and is expected to remain down for the first half, though production sales from its Studios arm and online growth were both strong.

TalkTalk shares tumbled as it reported full-year adjusted operating profit short of expectations and said it will cut the dividend in the current year, while AstraZeneca fell a little after saying its asthma drug, Tralokinumab, did not meet its primary endpoint in a late-stage study.

Just Eat was weaker after it said that it noted that the Competition and Markets Authority plans to refer its proposed takeover of Hungryhouse to a Phase 2 investigation, while Wood Group slipped as it said its performance year to data has been weaker than expected.

Market Movers

FTSE 100 (UKX) 7,362.07 0.27%
FTSE 250 (MCX) 19,866.69 0.25%
techMARK (TASX) 3,555.71 -0.10%

FTSE 100 - Risers

Barratt Developments (BDEV) 621.00p 4.11%
Associated British Foods (ABF) 2,876.00p 2.35%
Next (NXT) 4,414.00p 1.96%
Compass Group (CPG) 1,621.00p 1.63%
Burberry Group (BRBY) 1,628.00p 1.62%
Kingfisher (KGF) 347.90p 1.52%
Taylor Wimpey (TW.) 202.40p 1.50%
Persimmon (PSN) 2,438.00p 1.50%
Centrica (CNA) 202.60p 1.30%
Marks & Spencer Group (MKS) 384.90p 1.29%

FTSE 100 - Fallers

ITV (ITV) 195.70p -2.54%
Hikma Pharmaceuticals (HIK) 1,938.00p -2.07%
Provident Financial (PFG) 3,197.00p -1.42%
Pearson (PSON) 725.00p -1.23%
Informa (INF) 649.50p -0.99%
Smurfit Kappa Group (SKG) 2,164.00p -0.92%
Rolls-Royce Holdings (RR.) 882.00p -0.90%
Intertek Group (ITRK) 4,139.00p -0.89%
Micro Focus International (MCRO) 2,468.00p -0.88%
Coca-Cola HBC AG (CDI) (CCH) 2,176.00p -0.87%

FTSE 250 - Risers

Vesuvius (VSVS) 589.50p 8.56%
Marshalls (MSLH) 412.50p 4.96%
Hill & Smith Holdings (HILS) 1,399.00p 3.78%
Ferrexpo (FXPO) 162.10p 2.72%
Greencore Group (GNC) 238.90p 2.71%
Dignity (DTY) 2,591.00p 2.61%
Indivior (INDV) 337.50p 2.27%
Vedanta Resources (VED) 618.00p 2.23%
JRP Group (JRP) 131.90p 2.17%
Berkeley Group Holdings (The) (BKG) 3,400.00p 1.95%

FTSE 250 - Fallers

TalkTalk Telecom Group (TALK) 163.50p -10.41%
Renishaw (RSW) 3,501.00p -2.91%
BGEO Group (BGEO) 3,554.00p -2.84%
Serco Group (SRP) 117.40p -2.00%
Allied Minds (ALM) 145.20p -1.96%
ZPG Plc (ZPG) 360.00p -1.93%
SIG (SHI) 123.70p -1.75%
Kaz Minerals (KAZ) 434.40p -1.72%
Spectris (SXS) 2,787.00p -1.66%
AO World (AO.) 148.60p -1.52%