London midday: Stocks flat ahead of ECB; Morrisons rallies

London stocks were hugging the flatline by midday on Thursday as investors awaited the latest policy announcement from the European Central Bank, amid signs that trade tensions between the US and China are easing.

The FTSE 100 was steady at 7,335.06, having trading a touch higher earlier in the session, while the pound was flat against the dollar at 1.2324 and 0.1% lower versus the euro at 1.1187.

Concerns about Sino-US trade relations receded after Donald Trump agreed to delay a planned increase in tariffs on $250bn of Chinese imports by two weeks. The US President said on Twitter on Wednesday that the delay was "a gesture of goodwill" and due to the fact that the People's Republic of China will be celebrating its 70th anniversary on 1 October.

The move followed a decision earlier in the day by Beijing to ease tariffs on 16 categories of goods imported from the US.

Spreadex analyst Connor Campbell said: "Normally, such a move would be greeted with an explosion of green by the global markets (even if the delay is actually only a two-week pause)."

He pointed to two likely reasons why markets weren't rallying on the news.

"The European indices really let rip yesterday, meaning the markets are sort of in the backwards position of having risen sharply before the ‘gesture of good will’ from Trump some would argue justifies said growth. And, it is worth stating, such a slender increase does still leave them at fresh multi-week highs.

"The main muting factor, however, will be the relative uncertainty surrounding the day’s ECB meeting. Investors are after not only a rate cut, but a new round of the central bank’s asset purchase programme as well. Anything less than that may leave a bitter taste in the market’s mouth, and could cause the boards to turn red this afternoon."

On home shores, investors were digesting the latest survey from the Royal Institution of Chartered Surveyors, which showed the outlook for the UK housing market darkened in August.

The net balance of surveyors reporting that house prices have risen over the last three months increased to -4 in August from -9 in July, versus expectations for a reading of -10.

However, Brexit-related uncertainty dented the outlook, with the near-term sales expectations net balance falling to -23 from -4, while the near-term prices expectations net balance declined to -24 from -13.

RICS chief economist Simon Rubinsohn said: "It is hard to get away from the shadow being cast over the housing market by the seemingly never-ending Brexit saga. Indeed uncertainty is a theme that respondents continue to highlight as a negative influence on sentiment in survey after survey."

In equity markets, miners were the top performers, with Anglo American, Rio Tinto and BHP all trading up as copper and iron ore prices were back at recent highs.

Morrisons was the standout gainer on the top-flight index as the supermarket retailer reported a fall in second-quarter like-for-like sales but a 5.3% rise in interim profit.

British American Tobacco rose after saying it was axing 2,300 management jobs as it looks to simplify its structure and reinvest the savings in developing new products such as vapour, tobacco heating and oral tobacco.

Going the other way, InterContinental Hotels and Whitbread were trading lower after rating downgrades at JPMorgan, while Lloyds was hit by a downgrade to 'sell' at Goldman Sachs.

Market Movers

FTSE 100 (UKX) 7,335.06 -0.04%
FTSE 250 (MCX) 19,967.81 -0.07%
techMARK (TASX) 3,833.30 -0.03%

FTSE 100 - Risers

Morrison (Wm) Supermarkets (MRW) 202.70p 4.48%
Anglo American (AAL) 1,924.60p 2.21%
Centrica (CNA) 74.24p 1.89%
British American Tobacco (BATS) 3,093.00p 1.64%
BHP Group (BHP) 1,805.40p 1.60%
Rio Tinto (RIO) 4,348.00p 1.39%
Scottish Mortgage Inv Trust (SMT) 530.95p 1.33%
Berkeley Group Holdings (The) (BKG) 4,076.00p 1.32%
CRH (CRH) 2,802.00p 1.30%
Antofagasta (ANTO) 904.80p 1.30%

FTSE 100 - Fallers

NMC Health (NMC) 2,799.00p -4.08%
InterContinental Hotels Group (IHG) 5,006.00p -3.12%
Whitbread (WTB) 4,424.00p -2.64%
Lloyds Banking Group (LLOY) 51.49p -2.11%
British Land Company (BLND) 543.40p -1.84%
Micro Focus International (MCRO) 1,101.60p -1.48%
3i Group (III) 1,109.50p -1.47%
Land Securities Group (LAND) 812.00p -1.38%
RSA Insurance Group (RSA) 528.80p -1.31%
Marks & Spencer Group (MKS) 200.40p -1.28%

FTSE 250 - Risers

Woodford Patient Capital Trust (WPCT) 47.00p 4.33%
Sirius Minerals (SXX) 10.95p 3.30%
Capita (CPI) 145.10p 3.13%
Sports Direct International (SPD) 272.00p 2.72%
Hochschild Mining (HOC) 210.40p 2.63%
NewRiver REIT (NRR) 186.40p 2.53%
Dechra Pharmaceuticals (DPH) 2,876.00p 2.49%
Kaz Minerals (KAZ) 443.70p 2.45%
Babcock International Group (BAB) 550.80p 2.38%
Bovis Homes Group (BVS) 1,056.74p 2.10%

FTSE 250 - Fallers

Metro Bank (MTRO) 270.00p -6.70%
Intu Properties (INTU) 42.74p -6.64%
Energean Oil & Gas (ENOG) 946.00p -5.02%
IP Group (IPO) 63.45p -4.15%
Hammerson (HMSO) 261.20p -4.01%
Centamin (DI) (CEY) 131.15p -2.71%
Ted Baker (TED) 1,042.00p -2.62%
Hikma Pharmaceuticals (HIK) 1,906.50p -2.46%
Tullow Oil (TLW) 222.90p -2.41%
Derwent London (DLN) 3,094.00p -2.40%