London midday: Stocks maintain gains as pound re-takes $1.30

London stocks were holding onto gains by midday, rebounding from two days of losses as investors put worries about US President Donald Trump to one side and digested some solid manufacturing data.

The FTSE 100 was up 0.4% to 7,467.84, recovering from a mid-week selloff sparked by concerns that Trump could be impeached. In currency markets, the pound was up 0.5% versus the dollar at 1.300, after dropping to as low as $1.2888 in a mini 'flash crash' late on Thursday.

Meanwhile, oil prices advanced amid growing optimism ahead of next week's OPEC meeting. West Texas Intermediate and Brent crude were up 0.8% to $52.94 a barrel and $49.75, respectively.

Sentiment was given a boost after the latest survey from the Confederation of British Industry showed UK manufacturing output in April was much stronger than expected. The proportion of manufacturing companies that reported order books were above normal levels was +9% more than those reporting levels below normal, which was the highest balance in over two years.

Just over 40% of businesses said the volume of output over the past three months was up, and 12% said it was down, giving a rounded balance of +28% - the fastest pace of growth since December 2013.

However, fuelling concerns about the squeeze on British consumers from rising inflation, a balance of almost a quarter of the 432 manufacturers surveyed expected a sharp rise in average selling prices due to strong pricing pressures from inputs.

Howard Archer, chief UK and European economist at IHS Markit, said: "This is an encouraging survey that fuels hopes that the UK economy is on course for some pick-up in growth in the second quarter after GDP expansion more than halved to 0.3% quarter-on-quarter in the first quarter."

In corporate news, Entertainment One pushed higher after announcing the start of production on a new series of Peppa Pig.

Private landlord group Grainger was also in the black as it hiked its interim dividend 10% after a first half where it secured half of its investment target and cut costs in a market where the proportion of privately rented homes is at its highest levels since records began in 1980.

Just Eat reversed course to trade higher as the Competition and Markets Authority said it is referring its proposed acquisition of Hungryhouse to an in-depth phase 2 investigation.

Aviva was higher but Legal & General dropped after they updated the market on their Solvency II positions.

Hikma Pharmaceuticals slumped as it updated its guidance on full year revenue to be $2bn-$2.1bn in constant currency after last week's delay of its asthma drug application by US regulators.

Close Brothers nudged a touch lower, reversing earlier gains despite reporting "solid" loan book growth in its banking division in the third quarter to the end of April, and saying it remains confident of delivering a good result for the full year.

Senior was boosted by an upgrade at Raymond James, while SIG was lifted as Peel Hunt raised it to 'buy'.

However, Johnson Matthey and Experian were hit by downgrades from UBS and Jefferies, respectively, while British Land and Land Securities were dented by downgrades to 'neutral' at JPMorgan Cazenove. Thomas Cook and Vodafone were downgraded by Barclays.

Market Movers

FTSE 100 (UKX) 7,467.84 0.42%
FTSE 250 (MCX) 19,789.34 0.50%
techMARK (TASX) 3,587.05 0.68%

FTSE 100 - Risers

Fresnillo (FRES) 1,620.00p 2.47%
ITV (ITV) 196.00p 2.08%
WPP (WPP) 1,727.00p 1.71%
Provident Financial (PFG) 3,127.00p 1.59%
Marks & Spencer Group (MKS) 388.10p 1.44%
RSA Insurance Group (RSA) 619.50p 1.39%
Anglo American (AAL) 1,081.00p 1.31%
Smith & Nephew (SN.) 1,329.00p 1.30%
Micro Focus International (MCRO) 2,439.00p 1.29%
International Consolidated Airlines Group SA (CDI) (IAG) 598.00p 1.27%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,625.00p -4.41%
Smiths Group (SMIN) 1,590.00p -2.39%
Royal Mail (RMG) 423.30p -2.38%
Experian (EXPN) 1,624.00p -2.17%
Johnson Matthey (JMAT) 3,033.00p -1.53%
Tesco (TSCO) 182.00p -1.09%
Morrison (Wm) Supermarkets (MRW) 240.00p -0.87%
Schroders (SDR) 3,099.00p -0.83%
Land Securities Group (LAND) 1,084.00p -0.73%
Paddy Power Betfair (PPB) 8,305.00p -0.66%

FTSE 250 - Risers

Berendsen (BRSN) 1,092.00p 4.40%
Senior (SNR) 231.90p 4.37%
Safestore Holdings (SAFE) 440.70p 4.09%
Renishaw (RSW) 3,502.00p 3.40%
Just Eat (JE.) 610.00p 3.04%
Petra Diamonds Ltd.(DI) (PDL) 133.40p 2.85%
Aldermore Group (ALD) 256.10p 2.77%
Sophos Group (SOPH) 403.50p 2.75%
SIG (SHI) 136.20p 2.64%
Ferrexpo (FXPO) 163.90p 2.57%

FTSE 250 - Fallers

Hays (HAS) 166.70p -3.81%
Euromoney Institutional Investor (ERM) 1,173.00p -3.54%
Thomas Cook Group (TCG) 92.15p -3.20%
Pagegroup (PAGE) 472.00p -3.00%
Ashmore Group (ASHM) 340.10p -2.83%
Essentra (ESNT) 544.00p -2.25%
Allied Minds (ALM) 143.00p -2.12%
CLS Holdings (CLI) 200.20p -1.86%
Drax Group (DRX) 321.80p -1.74%
Dairy Crest Group (DCG) 580.50p -1.61%