London midday: Stocks hold higher despite geopolitical tensions

Stocks were holding higher come midday amid a backdrop of French airstrikes against Isis targets in Syria and news that diplomats meeting in Vienna had thrashed out an agreement for a political transition in Syria.

As of 11:55 the FTSE 100 was 25.96 points or 0.41% higher to 6,143.97. Meanwhile, the benchmark Stoxx Europe 600 index was to be seen advancing 0.25% to 370.44.

The news came as analysts were still trying to get a handle on the full medium-term implications of the attacks in geopolitical terms, although some traders appeared confident that the short-term impact on financial markets would be shortlived.

The impact on commodities markets was the most clear cut, with front-month Brent crude futures up 1.05% to $44.94 per barrel in ICE trading following Sunday evening's strike by French jets against the ISIS stronghold of Raqqa in Syria. Gold futures were up by 0.93% to $1,091 per ounce in COMEX trading.

Euro/dollar was nearly unchanged at 1.0734.

Meeting over the weekend in Turkey, G-20 planners were reported to have made progress on a timeline for a political transition in Syria, amid some signs of a rapprochement between Russia and the US.

There was also some added speculation that the European Central Bank might be that much more likely to move in December.

"For France, regional elections in three weeks will be very closely watched. Front National were already tipped to do well and it's possible that Friday's events will cement this. Europe is currently fortunately in a positive economic cycle which is dampening the support of extreme parties to a degree," said Michael Reid at Deutsche Bank.

"However the migration crisis is impacting this and one can only imagine what would occur politically if this occurred simultaneously with a recession - worst still if it coincided with an important election. Another ramification of Friday's attacks is the likely confidence hit to the French economy which may in turn increase the dovishness at the ECB meeting in just over two weeks."

The average asking price of a home in the UK slipped 1.3% month-on-month in November, according to a survey from Rightmove. Nonetheless, home prices typically drop in that month of the year as sellers lower prices ahead of the holiday season.

“It’s likely to be a short-lived respite as the combination of high confidence and low interest rates is a recipe for higher prices,” said Rightmove.

FTSE 100 oil and defence stocks advance

Royal Dutch Shell and BG Group were pacing gains as traders priced-in an increased geopolitical premium, pushing oil futures higher after French jets attacked Isis targets in Syria. BAE Systems was also near the top of the leaderboard. Tourism-related shares on the other hand were taking it on the chin, with TUI and IAG faring worst.

Housebuilder Taylor Wimpey said it expected to report a 2% rise in 2015 operating profit margin and a return on net operating assets of more than 25%. The company said it had seen an “excellent summer selling season strengthen further in the autumn period”, underpinned by rising wages and access to a wider range of mortgages.

The head of BT Group's local access network division Openreach is leaving to become chief executive of Nationwide. Joe Garner will take up the position at the mortgage and savings provider in spring 2016.

Meggitt’s wholly-owned subsidiary, Securaplane, was selected by Gulfstream to provide high definition cameras for the G650 aircraft. The aerospace and defence engineer said Securaplane and Gulfstream have entered into a multi-million dollar contract for a system that will be standard fit on all future production G650 aircraft and offered as a retrofit for aircraft in service.

FTSE 250's Diploma rewarded by investors

Technical instruments-to-wiring maker Diploma reported a 4% jump in full year pre-tax profits to £51.8m although the weaker Australian and Canadian dollars impacted on results. Shares were 15% higher by midday.

Tullow Oil shares surged after UBS upgraded the stock to ‘buy’ from ‘neutral’ and lifted the price target to 240p from 230p as it called a bottom to the net asset value downgrade cycle.

Engineering specialist Keller Group said it remains confident results for the year will be in line with current market expectations despite challenging conditions in many of its markets, thanks in part to strength in its main market of US construction.

Market Movers

FTSE 100 (UKX) 6,145.39 0.44%
FTSE 250 (MCX) 16,810.74 0.21%
techMARK (TASX) 3,063.01 0.20%

FTSE 100 - Risers

Royal Dutch Shell 'A' (RDSA) 1,609.00p 2.61%
Imperial Tobacco Group (IMT) 3,544.00p 2.61%
BG Group (BG.) 990.40p 2.35%
Royal Dutch Shell 'B' (RDSB) 1,619.00p 2.34%
Rolls-Royce Holdings (RR.) 525.50p 2.34%
Glencore (GLEN) 95.02p 2.05%
BAE Systems (BA.) 462.90p 2.05%
BP (BP.) 371.35p 1.88%
BHP Billiton (BLT) 899.50p 1.82%
Anglo American (AAL) 463.00p 1.49%

FTSE 100 - Fallers

TUI AG Reg Shs (DI) (TUI) 1,084.00p -4.41%
International Consolidated Airlines Group SA (CDI) (IAG) 575.50p -2.87%
Carnival (CCL) 3,401.00p -2.02%
Merlin Entertainments (MERL) 390.40p -1.44%
Royal Mail (RMG) 438.20p -1.33%
InterContinental Hotels Group (IHG) 2,477.00p -1.28%
Johnson Matthey (JMAT) 2,380.00p -1.00%
Whitbread (WTB) 4,411.00p -0.92%
Hammerson (HMSO) 575.00p -0.86%
Burberry Group (BRBY) 1,258.00p -0.79%

FTSE 250 - Risers

Diploma (DPLM) 691.50p 13.73%
Premier Oil (PMO) 74.50p 8.28%
SIG (SHI) 127.80p 6.50%
Tullow Oil (TLW) 196.20p 6.46%
Petrofac Ltd. (PFC) 790.50p 6.18%
Keller Group (KLR) 837.50p 5.95%
Centamin (DI) (CEY) 61.50p 3.36%
Tullett Prebon (TLPR) 340.30p 3.12%
FirstGroup (FGP) 107.60p 2.87%
Poundland Group (PLND) 286.60p 2.83%

FTSE 250 - Fallers

Restaurant Group (RTN) 635.50p -3.86%
Thomas Cook Group (TCG) 103.10p -3.64%
Kaz Minerals (KAZ) 77.45p -3.19%
Evraz (EVR) 76.50p -2.86%
Ocado Group (OCDO) 350.00p -2.26%
Allied Minds (ALM) 456.00p -1.91%
Grafton Group Units (GFTU) 621.00p -1.90%
Serco Group (SRP) 97.65p -1.76%
Card Factory (CARD) 363.50p -1.76%
Kier Group (KIE) 1,282.00p -1.69%