London midday: Stocks extend gains as pound drops

Stocks in London had extended gains by midday, with the pound losing ground against the dollar amid rising expectations of a US interest-rate hike, as investors sifted through a barrage of corporate and economic releases.

The FTSE 100 was up 0.9% to 7,326.98. Meanwhile, the pound was down 0.4% versus the dollar at 1.2327. The greenback was boosted by a series of hawkish comments from Federal Reserve officials on Tuesday, which briefly pushed market implied odds of a rate hike in mid-March as high as 70%, before they fell back to around 50%.

"Perhaps history is repeating itself once again. Arguably the more important developments overnight have been the ramping up of expectations regarding a Fed hike in March. Policymakers have been falling over themselves in the rush to suggest the US economy is ready for another hike, just one quarter after the last one," said IG's Chris Beauchamp

Investors in London were still digesting US President Donald Trump's first address to Congress the day before, in which he struck an upbeat but measured tone, saying he was open to a broad immigration reform bill but was short on details when it came to his economic plans.

Corporate news came thick and fast. Building materials group CRH rallied as it said pre-tax profit surged 68% in 2016.

Car dealership Inchcape gained ground after it posted a rise in full-year profit as revenue grew and the company was boosted by weakness in the pound.

Mitie surged as investors welcomed news it has sold its loss-making UK social care division, while retailer Next got a boost as Redburn double-upgraded the stock to 'buy' from 'sell'.

International distribution and outsourcing group Bunzl rose after agreeing to buy US-based Diversified Distribution Systems for an undisclosed sum.

Building materials distributor Wolseley pushed up as it appointed BBA Aviation's Mike Powell as chief financial officer and an executive director, effective from 1 June.

ITV edged higher after it pledged to pay a special dividend on top of a full year dividend up 20% as it reported a decline in broadcast revenues for 2016 and warned that advertising revenues would fall in the early months of 2017.

On the downside, hedge fund manager Man Group was under the cosh after saying it swung to a statutory pre-tax loss for the year to the end of December, although its funds under management rose.

Carillion fell as the support services group said profit fell 5% in 2016, while BBA Aviation slid as it swung to a full-year loss on the back of exceptional costs.

Consumer credit lender International Personal Finance tanked as it reported a 20% drop in full-year pre-tax profit.

On the data front, growth in the UK manufacturing sector slowed more than expected in February.

The Markit/CIPS manufacturing purchasing managers' index fell to 54.6 from 55.7 in January. The reading marked a three-month low and missed expectations for a more modest drop to 55.6, but it was still firmly above its long-run average of 51.6.

The decline in the index came as growth in new orders slowed and backlogs of work fell back, suggesting output growth may slow further. However, elevated business optimism, continued job creation, a recovery in export orders and rising levels of purchasing indicated that any easing will be mild.

Meanwhile, data from the Bank of England showed mortgage approvals for house purchases rose to an 11-month-high in January. The number of loans approved for house purchases jumped to 69,928 from 68,266 the month before, beating expectations for a small increase to 68,650 and marking the highest level since February last year.

Consumer credit in January was up £1.42bn, in line with expectations, and compared to £1bn in December, but below the six-month average of £1.6bn.

On an annual basis, however, the rate ticked down to 10.3% from 10.6% in December and 10.9% in November.

Market Movers

FTSE 100 (UKX) 7,326.98 0.87%
FTSE 250 (MCX) 18,859.41 0.47%
techMARK (TASX) 3,403.94 0.15%

FTSE 100 - Risers

CRH (CRH) 2,844.00p 4.56%
Ashtead Group (AHT) 1,713.00p 3.44%
Next (NXT) 3,956.00p 3.37%
Convatec Group (CTEC) 243.50p 3.18%
Glencore (GLEN) 331.05p 2.79%
BHP Billiton (BLT) 1,329.50p 2.47%
BP (BP.) 464.70p 2.46%
International Consolidated Airlines Group SA (CDI) (IAG) 550.00p 2.42%
Standard Chartered (STAN) 739.70p 2.39%
ITV (ITV) 207.10p 2.27%

FTSE 100 - Fallers

Fresnillo (FRES) 1,457.00p -1.95%
Micro Focus International (MCRO) 2,152.00p -1.47%
Randgold Resources Ltd. (RRS) 7,400.00p -1.46%
United Utilities Group (UU.) 966.50p -1.23%
Croda International (CRDA) 3,465.00p -1.23%
Centrica (CNA) 224.70p -0.97%
Babcock International Group (BAB) 939.00p -0.95%
BT Group (BT.A) 324.10p -0.92%
Severn Trent (SVT) 2,317.00p -0.90%
Vodafone Group (VOD) 200.40p -0.74%

FTSE 250 - Risers

Mitie Group (MTO) 222.90p 7.84%
ZPG Plc (ZPG) 389.00p 4.71%
Hill & Smith Holdings (HILS) 1,151.00p 4.35%
BTG (BTG) 599.00p 3.90%
JD Sports Fashion (JD.) 363.40p 3.30%
IMI (IMI) 1,280.00p 3.14%
Go-Ahead Group (GOG) 2,030.00p 3.05%
Senior (SNR) 188.10p 2.84%
Evraz (EVR) 236.90p 2.82%
Rotork (ROR) 253.90p 2.79%

FTSE 250 - Fallers

International Personal Finance (IPF) 165.10p -8.89%
Carillion (CLLN) 207.40p -5.30%
Elementis (ELM) 287.20p -4.14%
Man Group (EMG) 140.80p -3.83%
Hochschild Mining (HOC) 257.90p -3.12%
Meggitt (MGGT) 460.30p -2.17%
Millennium & Copthorne Hotels (MLC) 460.20p -1.71%
Centamin (DI) (CEY) 171.90p -1.66%
TalkTalk Telecom Group (TALK) 173.00p -1.59%
Ferrexpo (FXPO) 157.60p -1.56%