London midday: Stocks flatline as investors digest central bank talk

London stocks were still trading near the unchanged mark by midday, following fairly uninspiring sessions in the US and Asia, with remarks from central bankers filling the vacuum left by a nearly empty economic calendar.

As of 12:16 the Footsie was higher by just 7.23 points or 0.11% to 6,337.47.

Speaking at the 25th European Banking Congress in Frankfurt, European Central Bank governor Mario Draghi said that should it become apparent that the stability inflation mandate was not going to be met, then the ECB would do "what we must" to bring inflation higher "as quickly as possible"

That sent the single currency scurrying lower versus the US dollar, towards 1.068. Cable was also drifting lower by the mid-point of the trading session and was to be seen off by 0.29% to 1.5244.

"So, going next month, we expect Draghi to be very aggressive, but I wonder if his friends from Germany will be on board with him," said Naeem Aslam, chief market analyst at Ava Trade.

Soon afterwards, it was the German central bank president Jens Weidmann’s turn at the podium.

“I see no reason to talk down the economic outlook and paint a gloomy picture. […] In the end, we should also not forget that the monetary policy measures already taken still need time to fully feed into the economy," Weidmann said.

Overnight, US Federal Reserve vice chairman Stanley Fischer told an audience that the monetary authority had done everything it could to telegraph its message ahead of time and indications were that emerging market central banks had already undertaken the necessary preparations, although “no final decisions have been made.”

Those last words of his left some market observers scratching their heads about the timing of the next Fed hike, coming as they did in the wake of similar remarks from Cleveland Fed president Loreta Mester.

In the background, data from ONS revealed that public sector net borrowing in the UK increased by £7.5bn in October (consensus: £5.3bn), down from the previous month's upwardly revised reading of £8.3bn.

According to Ruth Miller at Capital Economics, that left the Chancellor facing “the uncomfortable situation of having to find some money to soften the tax credit cuts at the same time as the borrowing forecasts are pushed up a bit.”

BATS plotting to roll-up rival

British American Tobacco has put together a syndicate of banks to finance a possible purchase of rival Imperial Tobacco, according to the Financial Times's Alphaville, which cites "people claiming direct knowledge of the process". "With Imperial shares now trading near a record high the company might choose to go pens down rather than risk overpaying," the same sources cautioned.

Moody’s has changed its outlook on British Airways’ Ba2 rating to positive from stable and affirmed the airline’s ratings.

French and British pharmaceutical giants Sanofi and AstraZeneca have agreed a direct exchange of 210,000 compounds from their respective, proprietary compound libraries. The companies said on Friday that the deal would enhance the chemical diversity of the compound collections and allow each of them to screen a broader, more diverse chemical space as the starting point in the search for new, small-molecule medicines.

John Lewis’s weekly sales reached £100m for the first time this Christmas shopping season. The retailer revealed its sales figures for the week ending 14 November as festive sales ramp up. It said sales for the week were up 1.5% on last year and 15.8% on the previous week, and it showed signs it would be an “omnichannel Christmas”. “Two thirds of our customers now visit both a shop and johnlewis.com to make a purchase,” the company revealed.

Melrose Industries said trading for the Elster Group it agreed to sell to Honeywell in July was strong in the ten months to October, although its Brush business experienced challenging end market conditions. Sales at Elster were up 14% versus last year at constancy currency, 6% if excluding the acquisition of Eclipse in November last year. Melrose said the sale of the group was on course to complete in first the quarter of next year.

Spectris, the productivity-enhancing instrumentation and controls company, said group like-for-like sales fell by 1% in the four months to the end of October, with trading conditions worsening as the period progressed. Chief executive John O'Higgins said: "The period has been characterised by challenging trading conditions, particularly in our largest geographic region, North America. The board currently anticipates that full year adjusted operating profit will be towards the lower end of the range of market expectations.”

Market Movers

FTSE 100 (UKX) 6,330.91 0.02%
FTSE 250 (MCX) 17,142.23 -0.01%
techMARK (TASX) 3,173.66 0.09%

FTSE 100 - Risers

Glencore (GLEN) 96.63p 2.87%
Imperial Tobacco Group (IMT) 3,566.00p 2.15%
Anglo American (AAL) 459.60p 2.03%
Aberdeen Asset Management (ADN) 345.70p 1.89%
Antofagasta (ANTO) 510.00p 1.80%
Sky (SKY) 1,123.00p 1.54%
Pearson (PSON) 826.50p 1.35%
Rolls-Royce Holdings (RR.) 548.00p 1.29%
Old Mutual (OML) 204.70p 1.29%
Royal Mail (RMG) 483.00p 1.28%

FTSE 100 - Fallers

easyJet (EZJ) 1,662.00p -3.03%
G4S (GFS) 220.30p -2.52%
Babcock International Group (BAB) 975.50p -2.45%
Barclays (BARC) 224.80p -2.17%
Lloyds Banking Group (LLOY) 72.22p -1.51%
Shire Plc (SHP) 4,651.00p -1.46%
Royal Dutch Shell 'B' (RDSB) 1,656.50p -1.46%
BG Group (BG.) 1,025.50p -1.30%
Royal Dutch Shell 'A' (RDSA) 1,643.50p -1.23%
Sports Direct International (SPD) 699.50p -1.13%

FTSE 250 - Risers

CLS Holdings (CLI) 1,806.00p 4.57%
Allied Minds (ALM) 449.90p 4.24%
Poundland Group (PLND) 230.10p 3.32%
Ted Baker (TED) 3,600.00p 2.32%
Kaz Minerals (KAZ) 93.45p 2.13%
Senior (SNR) 244.90p 2.13%
William Hill (WMH) 354.80p 2.04%
IMI (IMI) 935.50p 2.02%
Daejan Holdings (DJAN) 5,940.00p 1.97%
Morgan Advanced Materials (MGAM) 250.70p 1.95%

FTSE 250 - Fallers

Ophir Energy (OPHR) 86.95p -4.03%
Amec Foster Wheeler (AMFW) 465.10p -2.84%
Countrywide (CWD) 389.50p -2.68%
Petra Diamonds Ltd.(DI) (PDL) 58.75p -2.49%
TalkTalk Telecom Group (TALK) 230.00p -2.29%
OneSavings Bank (OSB) 381.30p -2.03%
Jimmy Choo (CHOO) 147.00p -2.00%
Polymetal International (POLY) 559.00p -1.93%
DCC (DCC) 5,750.00p -1.88%
Premier Oil (PMO) 74.50p -1.84%