London midday: Stocks edge lower as oil prices waver

UK equities fell on Friday as oil prices wavered and the pound reversed the previous day’s gain against the dollar.

Oil prices were mixed as the dollar strengthened and investors took some profits. Brent crude fell 0.21% to $50.78 per barrel while West Texas Intermediate rose 0.10% to $48.27 per barrel.

The pound was down 0.21% against the dollar at $1.3140 at 1116 BST, following gains on Thursday when official data showed UK retail sales rose more than expected.

There are little catalysts to drive volumes on Friday with the only notable releases being UK public finance data and a report on German producer prices.

UK public sector net borrowing was in a £1bn surplus in July, less than the £1.2bn seen a year ago, the Office for National Statistics revealed. Economists had expected a surplus of £1.6bn.

The budget was affected by weaker growth in individual income tax payments and lower revenues from tobacco tax.

The ONS said the impact of the UK’s vote to leave the European Union would take time to impact the data.

“July is normally one of the bumper months for tax receipts, because HMRC gets a lot of payments of income tax from self-employed people, and also quarterly corporation tax payments from companies, which is why the government found itself quids in last month,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.

“Of course the elephant in the room is Brexit, and what effect this will have on tax receipts going forward, but so far the hard economic data has actually been pretty robust, though it’s obviously very early days.”

Meanwhile, German producer prices ticked higher in July, according to data from Destatis. The index of producer prices for industrial products was up 0.2% following a 0.4% increase in June and May. Economists had been expecting the index to nudge up 0.1%.

On the company front, William Hill shares jumped after Rank and 888 Holdings abandoned their bid for the bookmaker late on Thursday. Investors were encouraged by a statement from William Hill, which said it now expects operating profit for 2016 to be at the top end of the previously guided range of £260m to £280m.

EasyJet flew higher on rumours of a possible £16 a share takeover offer from private equity or founder Stelios Haji-Ioannou or a New York firm.

Centrica advanced as Barclays raised its target price from 240p to 245p with an ‘equal weight’ rating, saying it sees long-term potential from its new Connected Home & Distributed Energy & Power divisions.

KAZ Minerals gained as Credit Suisse upgraded the stock to ‘outperform’ from ‘neutral’ and lifted the price target to 250p from 165p saying development risks are receding.

On the downside, house builders slumped with Persimmon and Taylor Wimpey in the red.

Whitman Howard said shares in Persimmon have rallied by 30.0% since July but remain about 17% below pre-EU referendum levels.

"We believe that this reflects a growing awareness that predictions of a 2017 collapse are unfounded. Interim results on 23 August 2016 should provide further evidence that the company will face only a modest slowdown and continue to generate cash. Therefore, a yield of over 6.0% on the capital return is unwarranted. We remain buyers."

Legal & General continued to slide a day after going ex-dividend.

Glencore edged lower as Macquarie downgraded its recommendation on the shares to ‘neutral’ from ‘outperform' ahead of the miner’s first half results next week. However, analysts bumped up their target price on the stock from 180p to 200p.

Gem Diamonds dropped after RBC Capital Markets downgraded its rating to ‘sector perform’ from ‘outperform’ and cut its target price to 130p from 170p.

Market Movers

FTSE 100 (UKX) 6,858.48 -0.15%
FTSE 250 (MCX) 17,869.09 -0.01%
techMARK (TASX) 3,513.95 0.16%

FTSE 100 - Risers

easyJet (EZJ) 1,101.00p 2.13%
Centrica (CNA) 236.40p 1.16%
Morrison (Wm) Supermarkets (MRW) 194.00p 0.94%
Fresnillo (FRES) 1,955.00p 0.93%
Rolls-Royce Holdings (RR.) 795.00p 0.76%
BAE Systems (BA.) 531.50p 0.76%
AstraZeneca (AZN) 5,073.00p 0.54%
British American Tobacco (BATS) 4,858.50p 0.51%
Sage Group (SGE) 732.50p 0.48%
BP (BP.) 437.40p 0.42%

FTSE 100 - Fallers

Persimmon (PSN) 1,739.00p -2.14%
Standard Chartered (STAN) 622.60p -2.00%
Taylor Wimpey (TW.) 154.20p -1.97%
Legal & General Group (LGEN) 205.00p -1.58%
St James's Place (STJ) 947.50p -1.56%
Prudential (PRU) 1,375.50p -1.50%
Berkeley Group Holdings (The) (BKG) 2,469.00p -1.44%
Dixons Carphone (DC.) 364.80p -1.41%
Barratt Developments (BDEV) 448.70p -1.38%
Hargreaves Lansdown (HL.) 1,318.00p -1.35%

FTSE 250 - Risers

Kaz Minerals (KAZ) 193.40p 7.44%
William Hill (WMH) 315.50p 4.09%
Metro Bank (MTRO) 2,412.00p 3.30%
esure Group (ESUR) 265.10p 3.27%
Balfour Beatty (BBY) 261.50p 2.99%
Rotork (ROR) 210.60p 2.53%
Circassia Pharmaceuticals (CIR) 95.65p 2.52%
Brown (N.) Group (BWNG) 194.50p 2.48%
PayPoint (PAY) 1,003.00p 2.45%
Rank Group (RNK) 226.90p 2.39%

FTSE 250 - Fallers

CMC Markets (CMCX) 270.00p -2.88%
Pagegroup (PAGE) 346.80p -2.14%
International Personal Finance (IPF) 269.90p -2.14%
Ocado Group (OCDO) 278.20p -2.04%
Tullett Prebon (TLPR) 359.40p -1.96%
Close Brothers Group (CBG) 1,336.00p -1.76%
Virgin Money Holdings (UK) (VM.) 280.50p -1.75%
Thomas Cook Group (TCG) 64.95p -1.74%
Card Factory (CARD) 279.50p -1.55%
Ashmore Group (ASHM) 360.10p -1.45%