London midday: Stocks edge up despite Brexit, US-China trade concerns

Stocks are holding slightly higher come midday, despite news that the Chancellor might back a second referendum in order to unblock the paralysis that had led to a halving in the UK's car production in last month.

In remarks to BBC Radio 4's Today Programme, Philip Hammond, said that "if we get to the point when we have to admit that parliament can't resolve this issue then clearly it will have to be remitted back to the people."

Earlier, the Society of Motor Manufacturers and Traders had reported that in April the UK's output of cars shrank by 44.5% versus a year ago as companies carried through on previously scheduled factory shutdowns in anticipation of the original Brexit date.

On the next to last day of the month, as of 1217 BST the top flight index was trading 31.63 points or 0.44% higher to 7,216.62. In parallel, futures on the S&P 500 were adding 7.25 points to 2,787.25 and the front month West Texas Intermediate crude oil futures contract was up by 0.33% to $59.0 on the ICE.

Markets were nevertheless in a bit of a holding pattern ahead of a speech from the US central bank's vice-chairman, Richard Clarida, scheduled for 1800 BST, with investors keen for any hints regarding the outlook for monetary policy in the world's largest economy.

The Bank of England was also in the spotlight, with deputy governor Dave Ramsden reiterating in a speech at the Inverness Chamber of Commerce the widely-held view on the Monetary Policy Committee that a 'no deal' Brexit could cut either way in terms of the path for Bank Rate.

In the background, speaking overnight, China's vice foreign minister, Zhang Hanhui, reportedly said that Beijing was against the use of "big sticks" like sanctions, tariffs or protectionism, labelling recent US actions as "naked economic terrorism".

Analysts appeared to be somewhat divided on the scope for a relatively prompt resolution of the trade war, with some market commentary highlighting the view that the current frictions were but the prelude to a rivalry that was set to heat-up and extend for decades.

On a more positive note, in remarks to Bloomberg TV from China, Morgan Stanley chief, James Gorman, said that a "collapse" in the stock market was unlikely, adding that trade talks between Beijing and Washington were likely to resume as there was simply too much to lose on the table.

Other market pundits were also out overnight but with more cautious assessments.

One of those was Bridgewater Associates founder, Ray Dalio, who said on LinkedIn: "It is widely believed that time is on China’s side so that it is in the U.S. interest to have any fight that’s going to occur happen earlier and in China’s interest to have it later. This is leading to the Trump administration’s pushing the limits.

"Worth keeping in mind is how Chinese and Americans fight wars differently (the Chinese more strategically by gaining relative strength and the Americans more by exchanging blows until one side gives up)."

No major economic reports were published in the UK.

In the US on the other hand, investors were waiting on figures covering weekly jobless claims, first quarter gross domestic product and foreign trade in April.

Off to the races: FirstGroup at two-year high after announcing intention to sell Greyhound unit

First Group delivered a better than expected full-year performance, on the back of strength in its North American operations outside of its Greyhound coach unit and announced the results of a wide-ranging strategy review, including the proposed sale of the iconic coach franchise in the States and the separation of its First Bus operations in the UK. The news sent First Group shares to their best level in approximately two years

De La Rue was the standout faller in the small cap space after posting a 78% drop in profits on the heels of exceptional charges linked to American sanctions on Venezuela and after its boss announced his intention to step down.

Speciality chemicals company Johnson Matthey posted a 53% rise in pre-tax profits as tighter regulation in Europe and China helped its clean air division. Profits came it at £523m on revenues of £10.7bn, up 5% as the company said it expected current year growth in operating performance at constant rates to be within medium term guidance of mid to high single digit growth.

Pennon dripped lower despite announcing its decision to bump up its final dividend by 6.0% in the wake of a 6.1% rise in its full-year underlying revenues, which drove a 7.2% jump in the water utility's EBITDA.

Satellite communications giant Inmarsat announced on Thursday that Airbus Defence & Space had been selected as its satellite manufacturing partner, as part of the development of its ‘Global Xpress’ (GX) network. The FTSE 250 company said the partnership would provide a “step-change” in GX's capabilities, capacity and agility for the benefit of existing and future Inmarsat customers, partners and investors.

TR Property Investment Trust reported a 5.8% improvement in its net asset value per share in its full-year results on Thursday, to 418.54p. The FTSE 250 firm said shareholders’ funds were also ahead 5.8% at £1.33bn in the year ended 31 March, with shares in issue at year-end totalling 317.4 million, in line with the prior year. Its net debt ratio stood at 10%, narrowing from 14.6% year-on-year.

Several well-known corporates began trading without the rights to their latest dividend on Thursday, including National Grid, Bank of Georgia, Whitbread, Spire Healthcare and Marks&Spencer.

Market Movers

FTSE 100 (UKX) 7,218.14 0.46%
FTSE 250 (MCX) 19,091.92 0.77%
techMARK (TASX) 3,493.94 0.53%

FTSE 100 - Risers

Standard Life Aberdeen (SLA) 270.90p 2.34%
Rightmove (RMV) 577.90p 2.28%
Schroders (SDR) 2,928.00p 2.09%
Evraz (EVR) 591.00p 2.00%
Phoenix Group Holdings (PHNX) 669.80p 1.93%
Relx plc (REL) 1,844.50p 1.91%
London Stock Exchange Group (LSE) 5,242.00p 1.87%
Hargreaves Lansdown (HL.) 2,287.00p 1.83%
Halma (HLMA) 1,815.00p 1.77%
Bunzl (BNZL) 2,095.00p 1.75%

FTSE 100 - Fallers

National Grid (NG.) 782.70p -4.06%
Johnson Matthey (JMAT) 3,073.00p -3.49%
Marks & Spencer Group (MKS) 225.10p -2.97%
United Utilities Group (UU.) 786.80p -1.28%
Whitbread (WTB) 4,511.00p -1.10%
Flutter Entertainment (FLTR) 5,562.00p -0.93%
easyJet (EZJ) 880.00p -0.90%
BT Group (BT.A) 195.00p -0.51%
Smurfit Kappa Group (SKG) 2,176.00p -0.32%
Melrose Industries (MRO) 168.30p -0.30%

FTSE 250 - Risers

Kier Group (KIE) 288.20p 10.76%
Aveva Group (AVV) 3,542.00p 4.55%
FirstGroup (FGP) 115.24p 4.38%
Quilter (QLT) 135.10p 4.24%
Stobart Group Ltd. (STOB) 129.56p 4.15%
Tullow Oil (TLW) 209.20p 3.98%
Intermediate Capital Group (ICP) 1,349.00p 3.61%
Go-Ahead Group (GOG) 1,901.00p 3.37%
TI Fluid Systems (TIFS) 188.48p 3.22%
Ashmore Group (ASHM) 479.60p 3.18%

FTSE 250 - Fallers

Just Group (JUST) 50.27p -6.91%
Metro Bank (MTRO) 728.00p -5.94%
Saga (SAGA) 41.86p -4.25%
Entertainment One Limited (ETO) 422.20p -2.72%
Hilton Food Group (HFG) 980.00p -2.00%
Computacenter (CCC) 1,243.00p -1.97%
Apax Global Alpha Limited (APAX) 144.50p -1.70%
Drax Group (DRX) 301.40p -1.70%
Babcock International Group (BAB) 450.00p -1.68%
Great Portland Estates (GPOR) 704.60p -1.67%