London midday: Stocks maintain gains; Croda, NatWest rally

London stocks were still firmly in the black by midday on Monday, with Croda pacing the gains after a well-received third-quarter sales update.

The FTSE 100 was up 0.8% at 8,132.97.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "London’s blue-chip index, the FTSE 100, has begun the week on the front foot, rising in early trade, as concerns over the impact of Trump’s trade policies on multinational companies recede a little.

"Focus has turned to China’s latest stimulus plan and expectations of higher military spending amid ongoing conflicts. Fresh debt relief from Chinese authorities appears to have added to positive sentiment. A $1.39 trillion package was unveiled at the National People’s Congress to help local government borrowing issues, and there is clearly hope it will help move the dial and stabilise the economy.

"There was some disappointment about the lack of firepower deployed in terms of tax cuts. Fresh data showing that the risks of deflation are still stalking the economy are also a concern, with non-food prices still falling. However, authorities may be keeping their powder dry and waiting to see what impact the new Trump Presidency will have, before hitting the economy with fresh stimulus."

Looking ahead to the rest of the week, Tuesday sees the release of the latest UK jobs data.

Kathleen Brooks, research director at XTB, said the labour market data will be scrutinised to see whether wage prices have moderated.

"Monthly payrolls are expected to have declined by 13k in October, the 3-month-on-month unemployment rate is expected to rise a notch to 4.1% from 4% in August," she said.

"Average weekly earnings are expected to rise a touch to a 3.9% quarterly rate, while excluding bonus, weekly earnings are expected to moderate to 4.7% from 4.9%. This data is expected to show that wage pressures remain stubborn in the UK. The unemployment rate may be rising, but at a slow pace that is not enough to weaken wages."

In equity markets, Croda shot to the top of the FTSE 100 as the specialty chemicals group left full-year constant-currency profit guidance unchanged after a solid third quarter, but said a stronger pound will hit the bottom-line results more than previously expected.

NatWest advanced as it repurchased £1bn of shares from the HM Treasury, taking the government’s stake in the banking group to 11.4%. The company said that it made an off-market purchase of 262.6m shares on Friday at a price of 380.8p, representing a 3.16% shareholding.

"This transaction represents another important milestone on the path to full privatisation," said chief executive Paul Thwaite.

Kainos was a high riser as the software group unveiled a £30m share buyback and reported a rise in interim profit, although it remained cautious on full-year prospects.

Burberry rallied following a report the luxury brand is on the brink of being taken over by Italy’s Moncler.

According to correspondence seen by The Mail on Sunday, staff at one of Burberry's flagship London stores have already been told about the takeover.

Speculation about a potential takeover first emerged early this month when industry website Miss Tweed said Moncler was considering a buyout.

Trustpilot was also in the black after an initiation at ‘buy’ at Deutsche Bank.

Direct Line edged lower after saying it planned to axe 550 jobs as part of a turnaround plan amid continuing struggles at its motor insurance arm. The insurer reported a fall in third-quarter gross written premium and associated fees to £836m compared with £1.28bn a year ago.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Direct Line continues to battle "with internal demons and a tough trading environment".

"Cutting costs is one angle of attack to try and bring performance back on track, the other angle must come from stabilising the customer base, especially in the all-important motor division," he said.

"Another 71,000 own-brand motor customers were lost over the third quarter as premiums were 3% higher than last year on average. The good news is that the rate of decline in customer numbers is slowing, as insurance prices are now starting to come down after some mammoth hikes were put through earlier in the year.

Outside the FTSE 350, Aquis Exchange flew higher after agreeing to be taken over by Swiss stock exchange operator Six Exchange Group in a £225m deal.

Market Movers

FTSE 100 (UKX) 8,132.97 0.75%
FTSE 250 (MCX) 20,713.10 0.95%
techMARK (TASX) 4,639.57 0.78%

FTSE 100 - Risers

Croda International (CRDA) 3,789.00p 5.13%
Rolls-Royce Holdings (RR.) 569.00p 2.86%
NATWEST GROUP (NWG) 391.30p 2.76%
Barclays (BARC) 257.75p 2.49%
Convatec Group (CTEC) 218.60p 2.44%
Fresnillo (FRES) 717.00p 2.43%
Smith & Nephew (SN.) 939.80p 2.42%
Airtel Africa (AAF) 98.10p 2.08%
Diploma (DPLM) 4,510.00p 2.04%
Melrose Industries (MRO) 516.40p 2.02%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 246.00p -1.28%
Imperial Brands (IMB) 2,349.00p -0.76%
Rio Tinto (RIO) 4,909.50p -0.74%
Smith (DS) (SMDS) 562.00p -0.62%
British American Tobacco (BATS) 2,723.00p -0.37%
Mondi (MNDI) 1,199.50p -0.33%
Glencore (GLEN) 393.65p -0.29%
Anglo American (AAL) 2,368.00p -0.17%
Shell (SHEL) 2,562.00p -0.10%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%

FTSE 250 - Risers

Kainos Group (KNOS) 843.00p 6.04%
Burberry Group (BRBY) 844.80p 4.97%
Trustpilot Group (TRST) 269.00p 4.67%
Future (FUTR) 919.50p 4.43%
Wood Group (John) (WG.) 60.40p 4.41%
Telecom Plus (TEP) 1,734.00p 4.33%
Energean (ENOG) 985.00p 3.47%
Genuit Group (GEN) 446.50p 3.24%
Edinburgh Worldwide Inv Trust (EWI) 172.80p 3.23%
Mitie Group (MTO) 110.60p 3.17%

FTSE 250 - Fallers

PureTech Health (PRTC) 153.20p -2.30%
Investec (INVP) 614.00p -1.44%
SDCL Energy Efficiency Income Trust (SEIT) 56.00p -1.41%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 679.30p -1.24%
AO World (AO.) 105.20p -1.13%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,405.00p -1.03%
Bluefield Solar Income Fund Limited (BSIF) 101.00p -0.98%
Centamin (DI) (CEY) 153.00p -0.97%
Vietnam Enterprise Investments (DI) (VEIL) 568.00p -0.87%
Baillie Gifford Japan Trust (BGFD) 710.00p -0.84%