London midday: Stocks gain on back of new 'Trump rally'

London stocks on Wednesday tracked gains in the US on President Donald Trump's plans for boosting infrastructure spending.

At just after midday the FTSE 100 was up 19 points to 7,170.25.

The pound recovered from lows on Tuesday ahead of a Brexit bill, which is expected to bring more clarity to the government’s plans for the UK’s exit from the European Union when published on Thursday. Sterling rose 0.40% versus the dollar to $1.2570 and edged up 0.21% to €1.1692.

The currency was weaker on Tuesday after the Supreme Court upheld the High Court’s ruling that government must get consent from Parliament before triggering Article 50, which kicks off the formal process of Brexit. Analysts said while Parliament is unlikely to block Brexit, the ruling had brought uncertainty.

“Though the Supreme Court’s decision wasn’t a massive boost for sterling – it still leaves only a few obstacles for the government to clear before it triggers Article 50 – the fact it a bill will now be published on Thursday means the uncertainty that has plagued the currency for months is gradually dissipating,” said Connor Campbell, financial analyst at Spreadex.

Across the Atlantic, a “Trump rally” was giving global stocks a boost as the new President is expected to sign several executive orders over the next few days, including building a wall between the US and Mexico border. His plans to build a wall lifted infrastructure shares.

“With all the focus on fiscal stimulus, the decision to build a $14bn wall would certainly prove a positive first step for the US construction industry,” said IG market analyst Joshua Mahony.

“Whether Congress are willing to reallocate $14bn to the building of a wall is another matter. One thing is for sure, if Trump manages to build a wall that benefits US jobs and security, yet is paid for by Mexico, it would be an incredible sign of intent from the new President.”

In economic data, the Confederation of British Industry revealed British manufacturers have reported the strongest inflow of orders in nearly two years. However, manufacturers are seeing costs rise sharply due to a weaker sterling following the Brexit vote.

CBI’s monthly industrial orders balance rose to +5 in January from zero in December, its highest level since April 2015, beating expectations of +2.

Among corporate stocks, Chilean copper giant Antofagasta rallied after reporting a strong fourth quarter performance and impressive guidance on costs for 2017. Copper production of 205,500 tonnes at the end of 2016 was up 13.8% versus the previous quarter, lifting production for the full year to just under 710,000 tonnes, 12.5% higher than the prior year.

Other mining stocks were under pressure, including Fresnillo, Randgold Resources, Rio Tinto and BHP Billiton, as oil and metal prices fell.

WH Smith surged after reporting a strong start to full-year 2017, particularly in the Travel business. In the 21 weeks to 21 January, total sales were up 2% and like-for-like sales were up 1%.

Budget airline easyJet clawed back ground a day after saying profit for 2017 would take a £105m hit instead of £90m from the impact of a weaker pound.

Ashmore was a high riser as UBS upgraded the stock to ‘buy’, but Kingfisher dropped as Exane BNP Paribas downgraded the stock to ‘underperform’.

Tesco was under the cosh following reports it is facing a new claim for damages from investor Manning & Napier over the supermarket’s 2014 accounting scandal.

Restaurant Group tumbled as it said like-for-like sales continued to slip in the fourth quarter of 2016, and the company plans a "substantial" revamp of its casual dining chains as part of a group-wide "transformation programme".

Vodafone dipped after Bank of America Merrill Lynch downgraded the stock to a 'neutral' rating from 'buy' as the telecoms giant's multiple headwinds in recent months are "unlikely to abate in the near-term", with the 2 February trading update predicted to be cautious.

Brent crude dropped 1.0% to $54.89 per barrel and West Texas Intermediate slid 0.98% to $52.66 per barrel at 1150 GMT after inventory data from the American Petroleum Institute (API) late on Tuesday showed US crude, gasoline and diesel stocks rose more than expected last week.

Market Movers

FTSE 100 (UKX) 7,169.84 0.27%
FTSE 250 (MCX) 18,156.05 0.31%
techMARK (TASX) 3,248.49 0.14%

FTSE 100 - Risers

Ashtead Group (AHT) 1,614.00p 3.20%
easyJet (EZJ) 1,009.00p 2.85%
St James's Place (STJ) 1,088.00p 2.64%
Royal Bank of Scotland Group (RBS) 225.50p 2.50%
CRH (CRH) 2,926.00p 2.45%
Standard Chartered (STAN) 780.00p 2.23%
Marks & Spencer Group (MKS) 341.10p 2.00%
Aviva (AV.) 481.10p 1.71%
Old Mutual (OML) 213.90p 1.66%
Direct Line Insurance Group (DLG) 351.70p 1.59%

FTSE 100 - Fallers

Fresnillo (FRES) 1,441.00p -2.77%
Vodafone Group (VOD) 193.95p -2.71%
Kingfisher (KGF) 330.40p -2.48%
Randgold Resources Ltd. (RRS) 6,690.00p -2.41%
Barratt Developments (BDEV) 471.00p -1.77%
Rio Tinto (RIO) 3,558.50p -1.56%
BHP Billiton (BLT) 1,459.00p -1.45%
Whitbread (WTB) 4,004.00p -1.09%
Anglo American (AAL) 1,371.50p -1.05%
Paddy Power Betfair (PPB) 7,880.00p -0.76%

FTSE 250 - Risers

WH Smith (SMWH) 1,577.00p 6.55%
Ferrexpo (FXPO) 148.80p 5.98%
Ashmore Group (ASHM) 309.80p 5.66%
Aldermore Group (ALD) 218.80p 4.09%
McCarthy & Stone (MCS) 172.90p 3.29%
Aggreko (AGK) 1,038.00p 3.08%
Man Group (EMG) 130.20p 3.01%
Electrocomponents (ECM) 488.80p 2.54%
Spirax-Sarco Engineering (SPX) 4,391.00p 2.40%
Weir Group (WEIR) 2,026.00p 2.22%

FTSE 250 - Fallers

Restaurant Group (RTN) 309.30p -10.63%
Hochschild Mining (HOC) 243.40p -3.83%
Centamin (DI) (CEY) 150.00p -3.10%
Acacia Mining (ACA) 412.90p -2.50%
Domino's Pizza Group (DOM) 365.30p -2.48%
Polymetal International (POLY) 943.00p -2.33%
Vectura Group (VEC) 132.20p -2.29%
Evraz (EVR) 227.00p -2.07%
Millennium & Copthorne Hotels (MLC) 465.60p -1.98%
Nostrum Oil & Gas (NOG) 461.40p -1.75%