London midday: Stocks fall further as pound perks up after Queen's speech

London stocks had extended losses just after midday on Wednesday after the Queen set out the government's programme for the next two years, and as investors digested data showing the UK budget deficit narrowed in May.

The FTSE 100 was down 0.4% to 7,441.20 as the pound perked up, trading 0.4% higher against the euro at 1.1383 and 0.4% firmer versus the dollar at 1.2682.

A number of the Tories' key manifesto pledges were dropped from the Queen's Speech, which focused mostly on Brexit, with no mention of issues such as the expansion of grammar schools or a free vote on restoring foxhunting. In addition to bills on a new customs regime and immigration system and reforms to trade, the agenda included details on counter-terrorism plans and infrastructure projects, as well as the economy.

Meanwhile, figures released earlier from the Office for National Statistics revealed that UK public borrowing declined more than expected in May, providing encouraging reading for Chancellor Philip Hammond, although the budget deficit is still expected to increase over the rest of the year as the economy weakens.

Public sector net borrowing excluding publicly owned banks reached £6.7bn in May, the lowest May borrowing since 2007 as the public sector spent more money than it received in taxes and other income.

The budget deficit was down from £7.1bn in May last year, a touch below the consensus expectation of £6.8bn and follows the PSNB of £9.4bn in April that was revised down from a previously reported £10.4bn.

The Office for Budget Responsibility expects a £7bn rise in PSNB over the full fiscal year to £58.3bn.

For the 2017 financial year the public defecit was recalculated to £46.6bn versus the previous £48.7bn estimate.

Lower borrowing in May was due to an increase in central government revenue of £2.6bn or 5.1%, boosted by a 4.3% rise in VAT receipts, that offset higher expenditure of £2.2bn, a rise of 4.2%.

In corporate news, Whitbread rallied after saying it booked in a strong start to its new financial year, with revenues at its Premier Inn hotels accelerating and Costa coffee shops sales returning to like-for-like growth.

Biopharmaceutical company Shire was on the front foot as it announced that the US Food and Drug Administration approved Mydayis - mixed salts of a single-entity amphetamine product - which the company’s board described as a once-daily treatment comprised of three different types of drug-releasing beads for patients 13 years and older with attention deficit hyperactivity disorder .

Berkeley Group advanced as it reported a 53% jump in full-year pre-tax profit, while British Gas parent Centrica also gained as it agreed to sell its operational Langage ad South Humber Park combined cycle gas turbine power stations to EP UK Investments for £318m in cash.

On the downside, subprime lender Provident Financial tanked after it cautioned that its consumer credit division will see profits nearly halve in 2017 compared to a year ago, mostly due to restructuring costs.

Market Movers

FTSE 100 (UKX) 7,441.20 -0.42%
FTSE 250 (MCX) 19,670.10 -0.51%
techMARK (TASX) 3,608.98 -0.16%

FTSE 100 - Risers

Whitbread (WTB) 3,995.00p 3.69%
Centrica (CNA) 206.10p 1.98%
Fresnillo (FRES) 1,549.00p 1.64%
Anglo American (AAL) 972.20p 1.33%
Shire Plc (SHP) 4,428.50p 1.33%
Glencore (GLEN) 279.00p 0.87%
Rio Tinto (RIO) 3,022.00p 0.73%
ITV (ITV) 177.00p 0.68%
International Consolidated Airlines Group SA (CDI) (IAG) 595.00p 0.68%
Micro Focus International (MCRO) 2,444.00p 0.66%

FTSE 100 - Fallers

Provident Financial (PFG) 2,385.00p -16.75%
Hargreaves Lansdown (HL.) 1,332.00p -2.20%
Schroders (SDR) 3,098.00p -1.68%
3i Group (III) 887.00p -1.61%
Admiral Group (ADM) 2,032.00p -1.60%
Prudential (PRU) 1,786.50p -1.57%
Standard Life (SL.) 392.20p -1.56%
Direct Line Insurance Group (DLG) 362.40p -1.41%
St James's Place (STJ) 1,210.00p -1.39%
BT Group (BT.A) 282.35p -1.38%

FTSE 250 - Risers

Assura (AGR) 63.75p 3.32%
Capita (CPI) 684.00p 1.94%
Just Eat (JE.) 673.50p 1.66%
Acacia Mining (ACA) 295.60p 1.62%
Clarkson (CKN) 2,587.00p 1.57%
Hunting (HTG) 473.80p 1.54%
IP Group (IPO) 135.30p 1.42%
St. Modwen Properties (SMP) 357.00p 1.39%
FDM Group (Holdings) (FDM) 771.50p 1.31%
GCP Infrastructure Investments Ltd (GCP) 127.40p 1.27%

FTSE 250 - Fallers

Euromoney Institutional Investor (ERM) 1,108.00p -4.07%
CLS Holdings (CLI) 207.00p -3.77%
NMC Health (NMC) 2,268.00p -3.57%
Essentra (ESNT) 559.50p -3.20%
Cairn Energy (CNE) 172.00p -3.10%
Domino's Pizza Group (DOM) 285.90p -3.08%
Ascential (ASCL) 325.80p -3.04%
Aldermore Group (ALD) 223.00p -2.71%
RPC Group (RPC) 744.00p -2.68%
AA (AA.) 211.60p -2.67%