London midday: Stocks hold onto small gains despite Manchester attack

London stocks were holding in the green by midday, although gains were muted after a suicide bomb attack at a concert in Manchester on Monday evening left 22 people dead and 59 injured.

The FTSE 100 was up 0.2% to 7,509.48.

In a statement made outside Downing Street earlier, Prime Minister Theresa May condemned the suicide bomb explosion at an Ariana Grande concert at the Manchester Arena, saying it was a "callous terrorist attack". General election campaigning has been suspended in light of the attack and a meeting of the Cobra emergency committee was held.

In currency markets, the pound fell to an eight-week low after data from the Office for National Statistics showed Britain recorded a bigger-than-expected budget deficit in April.

Public sector net borrowing, excluding the publicly owned banks, shrank to £48.7bn for the year ending March, revised down from the previous estimate of £51.7bn due to an upward revision to tax receipts growth.

The public deficit of £10.4bn in April was up by £1.2bn compared with the same month last year, well above the consensus expectation of £8.8bn and the highest April borrowing since 2014.

The rise in borrowing was due to annual expenditure growth of 5.9% outpacing revenue growth of 3.9%, which was partly held back by weak VAT receipts growth. For the financial year ending March 2018, the Office for Budget Responsibility has forecast PSNB will grow to £58.3bn.

"April’s public borrowing figures suggest that the slowdown in GDP growth in the first quarter won’t be just a blip," said Pantheon Macroeconomics analyst Samuel Tombs.

Meanwhile, the latest Distributive Trades survey from the Confederation of British Industry was no cheerier, showing sales slowed in the year to May following strong growth in April, coming in broadly flat as rising inflation takes its toll. The retail sales balance fell to +2 from +38 the month before, hitting its lowest level since January and missing expectations for a smaller drop to +10.

In corporate news, Severn Trent advanced as it declared another chunky dividend and said it planned an enhanced payout for the next three years after spying further potential efficiencies in the business. In the year to end-March, it increased turnover 3.7% to £1.8bn, underlying profit before interest and tax by 4.3% to £525m and underlying earnings per share by 19.9% to 122.4p.

Budget airline easyJet flew higher after RBC Capital Markets upped the stock to 'sector perform', while Homeserve rallied as it posted a jump in full-year pre-tax profit and hiked its dividend for the year by 20% to 15.3p per share.

Irish food group Greencore was also in the black after it reported a rise in first-half pre-tax profit as revenue grew thanks in part to its acquisition of US food company Peacock Foods.

Electrocomponents gained after it said full-year headline pre-tax profit rose to £128m from £76.8m the year before, on revenue of £1.51bn, up from £1.29bn, while FTSE 250 meat supplier Cranswick rose as it posted a jump in full-year profit, hailing a year of "strong financial and strategic progress".

Peppa Pig owner Entertainment One was also on the front foot after its full-year pre-tax profit and earnings per share beat analysts' expectations.

Restaurant Group was hit by a downgrade to 'sell' from 'neutral' at UBS.

Market Movers

FTSE 100 (UKX) 7,509.48 0.18%
FTSE 250 (MCX) 19,964.67 0.26%
techMARK (TASX) 3,602.35 0.03%

FTSE 100 - Risers

Babcock International Group (BAB) 971.00p 3.13%
Royal Bank of Scotland Group (RBS) 266.60p 1.91%
Convatec Group (CTEC) 311.70p 1.86%
easyJet (EZJ) 1,291.00p 1.73%
Severn Trent (SVT) 2,483.00p 1.43%
Rentokil Initial (RTO) 259.00p 1.33%
Hikma Pharmaceuticals (HIK) 1,678.00p 1.33%
CRH (CRH) 2,832.00p 1.25%
Smiths Group (SMIN) 1,594.00p 1.08%
Associated British Foods (ABF) 2,938.00p 1.07%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 388.10p -1.87%
Mediclinic International (MDC) 871.50p -1.75%
Paddy Power Betfair (PPB) 8,460.00p -1.17%
Kingfisher (KGF) 363.80p -1.17%
Merlin Entertainments (MERL) 520.00p -1.05%
Imperial Brands (IMB) 3,666.00p -0.92%
Tesco (TSCO) 183.25p -0.76%
Intu Properties (INTU) 265.60p -0.75%
Compass Group (CPG) 1,610.00p -0.62%
Hammerson (HMSO) 580.00p -0.60%

FTSE 250 - Risers

Homeserve (HSV) 787.50p 12.18%
Greencore Group (GNC) 245.50p 8.01%
Syncona Limited NPV (SYNC) 160.90p 5.16%
UDG Healthcare Public Limited Company (UDG) 797.50p 4.11%
Allied Minds (ALM) 146.50p 3.68%
OneSavings Bank (OSB) 475.70p 2.81%
Electrocomponents (ECM) 553.00p 2.69%
Ferrexpo (FXPO) 173.90p 2.60%
Hill & Smith Holdings (HILS) 1,392.00p 2.13%
Paragon Group Of Companies (PAG) 479.70p 1.63%

FTSE 250 - Fallers

Restaurant Group (RTN) 315.70p -6.21%
Hunting (HTG) 551.50p -3.58%
Aveva Group (AVV) 1,972.00p -3.48%
Pets at Home Group (PETS) 160.60p -2.31%
Wood Group (John) (WG.) 765.00p -1.73%
Berendsen (BRSN) 1,080.00p -1.64%
Euromoney Institutional Investor (ERM) 1,161.00p -1.61%
IP Group (IPO) 140.90p -1.47%
Amec Foster Wheeler (AMFW) 547.00p -1.44%
ZPG Plc (ZPG) 364.50p -1.43%