London midday: Stocks maintain losses amid trade war concerns but AB Foods rallies

London stocks were still in the red by midday on Thursday amid fresh concerns about Sino-US trade relations, but solid updates from the likes of Primark owner AB Foods and Sage Group helped to minimise losses.

The FTSE 100 was off 0.4% at 6,834.25, while the pound was up 0.1% against the dollar at 1.2896 and flat versus the euro at 1.1309.

Trade war fears were weighing on sentiment following reports that the US is investigating Chinese tech giant Huawei for stealing trade secrets from US business partners.

"It goes right to the heart of the unresolved IP issues with China. China is unlikely to shrug this off which is creating a risk-off environment," said London Capital Group analyst Jasper Lawler, adding that signs of retaliation from China could see stocks sink further.

On home turf, having survived Wednesday's no-confidence vote in her government, Theresa May will now work on her Brexit 'Plan B', which she has until 21 January to put forward. On Thursday morning she met opposition leaders and Brexiteers from her own party in Downing Street this morning after opening talks overnight.

CMC Markets analyst Michael Hewson said: "The general feeling in the markets remains that somehow MPs will be able to come together to be able to head off the prospect of the current default position of a no deal Brexit, however that theory is still likely to be severely tested in the coming days and weeks.

"The Prime Minister’s insistence on sticking to the core outline of her failed deal can almost be compared to trying to resurrect a corpse, nonetheless she appears to be determined to stick to some of her predetermined red lines.

"For all of the available scenarios that are likely to be tested, an extension to article 50 likely to be top of the list however for that to happen the EU needs to be confident that MPs can coalesce around a deal that more than 321 of them can vote for in order to carry a majority in the House of Commons."

Housebuilding shares were proving to be fairly resilient in the face of a pretty bleak survey from the Royal Institution of Chartered Surveyors, which showed that the outlook for the housing market over the next three months was the worst on record in December as uncertainty over Brexit took its toll.

The net balance of surveyors expecting sales to drop came in at -28, marking the worst reading since the series began in 1999.

Meanwhile, the net balance of surveyors reporting that house prices have risen over the last three months fell to -19 in December from -11 the month before. This was the fourth consecutive negative reading and fell short of analysts' expectations for a reading of -13.

Looking ahead, the outlook for prices over the next 12 months was broadly flat. With the exception of London and the South East, prices were anticipated to either rise or hold steady across the other UK regions over this time horizon.

RICS chief economist Simon Rubinsohn said: "It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued. This is also very clearly reflected in a worsening trend in near term sales expectations. Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts, but that moment feels a way off for many respondents to the survey."

Elsewhere, Whitbread lost ground as it confirmed that profits are likely to remain flat for the next year but said it will begin buying back £500m worth of shares after completing the sale of Costa Coffee earlier than expected. UK like-for-like sales in the third quarter were down 0.2% at its Premier Inns chain, slowing growth for the year to date to 2.5%.

Associated British Foods racked up strong gains as it maintained full-year guidance and reported revenue growth in the Christmas period in all of its businesses apart from sugar.

Accounting software group Sage pushed higher after it reiterated full-year guidance as it said first-quarter guidance organic revenue increased by 7.6% to £465m.

Ladbrokes owner GVC Holdings rose as it said it expects underlying core earnings to come in above market expectations, while Experian advanced as it posted a 9% jump in third-quarter revenue with particularly strong growth in North America, and backed its full-year guidance.

Just Eat rallied after an upgrade to 'overweight' at Morgan Stanley, while William Hill was boosted by an upgrade to 'buy' at Berenberg, but ITV was hit by a downgrade to 'underperform' at Bank of America Merill Lynch and EasyJet flew lower as Barclays slashed its price target.

Ashtead, Compass Group, SSE, CYBG and Shaftesbury were among the companies whose stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 6,834.25 -0.41%
FTSE 250 (MCX) 18,433.44 -0.29%
techMARK (TASX) 3,345.17 -0.11%

FTSE 100 - Risers

Associated British Foods (ABF) 2,322.00p 6.61%
Sage Group (SGE) 627.80p 5.87%
British American Tobacco (BATS) 2,519.00p 1.90%
Experian (EXPN) 1,909.00p 1.84%
GVC Holdings (GVC) 684.50p 1.71%
Ocado Group (OCDO) 903.60p 1.14%
BT Group (BT.A) 230.30p 1.10%
Severn Trent (SVT) 1,918.50p 0.97%
Glencore (GLEN) 290.00p 0.73%
United Utilities Group (UU.) 798.60p 0.60%

FTSE 100 - Fallers

ITV (ITV) 129.37p -5.74%
SSE (SSE) 1,123.00p -3.56%
easyJet (EZJ) 1,154.60p -3.22%
Ashtead Group (AHT) 1,852.00p -2.94%
Rolls-Royce Holdings (RR.) 866.20p -2.23%
3i Group (III) 819.60p -2.17%
Wood Group (John) (WG.) 555.40p -2.15%
Whitbread (WTB) 4,684.00p -1.86%
Melrose Industries (MRO) 162.60p -1.84%
Compass Group (CPG) 1,601.50p -1.81%

FTSE 250 - Risers

Syncona Limited NPV (SYNC) 252.40p 3.23%
William Hill (WMH) 175.95p 3.11%
Just Eat (JE.) 650.80p 3.04%
Sanne Group (SNN) 531.00p 2.31%
Sophos Group (SOPH) 377.20p 1.84%
Safestore Holdings (SAFE) 538.41p 1.78%
FDM Group (Holdings) (FDM) 792.00p 1.54%
Royal Mail (RMG) 291.70p 1.53%
TI Fluid Systems (TIFS) 165.00p 1.48%
Mediclinic International (MDC) 328.00p 1.42%

FTSE 250 - Fallers

Rank Group (RNK) 147.20p -3.66%
IMI (IMI) 931.50p -2.77%
Babcock International Group (BAB) 532.60p -2.74%
Acacia Mining (ACA) 186.70p -2.66%
Superdry (SDRY) 503.00p -2.33%
Metro Bank (MTRO) 2,018.00p -1.85%
Genus (GNS) 2,180.00p -1.80%
Entertainment One Limited (ETO) 360.60p -1.80%
PZ Cussons (PZC) 208.20p -1.79%
Spectris (SXS) 2,399.00p -1.72%