London midday: Stocks in the black as mortgage approvals, consumer credit rise

London stocks were up but off earlier highs by midday, while the pound briefly popped above $1.30 for the first time in over a month after data showed mortgage approvals and consumer credit picked up more than expected in May, boosting expectations of an interest-rate hike.

The FTSE 100 was up 0.3% to 7,408.62, while the pound was 0.2% firmer against the dollar at 1.2957 after breaching the 1.30 level earlier, and flat versus the euro at 1.1365.

Figures from the Bank of England revealed that mortgage approvals in the UK ticked up to 65,202 from 65,051, beating analysts' expectations of 64,000.

Meanwhile, approvals for re-mortgaging advanced to 42,955 from 40,437 the month before and net mortgage lending increased to £3.5bn from a 12-month low of £2.7bn in April. Annual growth in consumer credit remained strong at 10.3% in May. It was up £1.7bn on the month, marking its biggest jump since November 2016 and beating expectations for a £1.4bn increase.

Also adding to rate hike expectations were comments by the Bank of England's chief economist Andy Haldane, who told the BBC that the central bank needs to "look seriously" at the possibility of raising rates.

Heavily-weighted miners put in a solid performance as metals prices rallied thanks to a weaker dollar, with Anglo American, Glencore, Antofagasta and Rio Tinto all higher.

Banks also racked up healthy gains, underpinned by news that all 34 banks in the second part of the US stress tests had passed. HSBC was the standout riser as it got an added boost from an upgrade to 'overweight' at Morgan Stanley, with Barclays, Standard Chartered and Lloyds also in the black.

Neil Wilson, senior market analyst at ETX Capital, said: "The boost seems to have been the halo effect from the US, as all the major banks passed stress tests, which means they can now significantly raise shareholder returns. The Fed has effectively green-lighted up to $100bn in dividends and buybacks. US banks rose in after-hours trading as a result."

Elsewhere, supermarket giant Tesco ticked higher as it gave the CMA a hurry-along over its proposed merger with wholesale group Booker, first announced on 27 January.

Engineering services company Babcock rose after announcing it has been awarded a new contract by the Norwegian Government to provide communities across Norway with “vital” air ambulance support.

FTSE 250 packaging group DS Smith rallied after it reported a 31% rise in full-year pre-tax profit and announced the acquisition of an 80% stake in US packaging and paper producer Interstate Resources from Merpas Co for $920m.

Pub operator Greene King was in the red as it posted a rise in adjusted profit and revenue but a drop in statutory profit for the year, and warned over economic uncertainty.

Inmarsat nudged lower despite confirming the successful launch of its S-band satellite for the European Aviation Network.

Royal Mail fell as its stock went ex-dividend, while JD Sports slumped as it said it was on track to meet full-year expectations but that it was seeing some margin pressure.

Mediclinic was also weaker after Morgan Stanley cut its stance on the stock to 'equalweight' from 'overweight'.

Market Movers

FTSE 100 (UKX) 7,408.62 0.28%
FTSE 250 (MCX) 19,423.55 -0.27%
techMARK (TASX) 3,546.62 -0.65%

FTSE 100 - Risers

HSBC Holdings (HSBA) 717.10p 4.47%
Anglo American (AAL) 1,049.00p 3.66%
Glencore (GLEN) 291.10p 2.48%
Johnson Matthey (JMAT) 2,983.00p 2.33%
Antofagasta (ANTO) 806.00p 2.28%
Rio Tinto (RIO) 3,224.00p 2.17%
Barclays (BARC) 207.60p 2.04%
Standard Chartered (STAN) 777.70p 1.86%
Lloyds Banking Group (LLOY) 67.53p 1.40%
Smurfit Kappa Group (SKG) 2,362.00p 1.33%

FTSE 100 - Fallers

Micro Focus International (MCRO) 2,297.00p -3.28%
Royal Mail (RMG) 415.00p -2.99%
Coca-Cola HBC AG (CDI) (CCH) 2,290.00p -1.97%
Burberry Group (BRBY) 1,673.00p -1.88%
International Consolidated Airlines Group SA (CDI) (IAG) 619.50p -1.67%
Convatec Group (CTEC) 318.70p -1.64%
Informa (INF) 681.50p -1.45%
GKN (GKN) 327.40p -1.42%
Intertek Group (ITRK) 4,276.00p -1.36%
Reckitt Benckiser Group (RB.) 7,746.00p -1.16%

FTSE 250 - Risers

Smith (DS) (SMDS) 469.00p 5.61%
Evraz (EVR) 206.10p 5.05%
Northgate (NTG) 460.10p 3.49%
OneSavings Bank (OSB) 381.20p 3.17%
Vedanta Resources (VED) 639.00p 3.06%
esure Group (ESUR) 304.00p 2.74%
Aldermore Group (ALD) 219.00p 2.29%
Tullow Oil (TLW) 157.50p 2.27%
Sophos Group (SOPH) 453.20p 2.26%
Petra Diamonds Ltd.(DI) (PDL) 105.80p 2.22%

FTSE 250 - Fallers

JD Sports Fashion (JD.) 365.50p -8.12%
Nex Group (NXG) 624.50p -3.70%
Sirius Minerals (SXX) 31.50p -3.61%
Tate & Lyle (TATE) 675.00p -3.23%
Polypipe Group (PLP) 374.40p -2.90%
Amec Foster Wheeler (AMFW) 470.00p -2.65%
Wood Group (John) (WG.) 645.50p -2.27%
Ted Baker (TED) 2,352.00p -2.24%
Hikma Pharmaceuticals (HIK) 1,446.00p -2.17%
TalkTalk Telecom Group (TALK) 179.00p -2.13%