London midday: Stocks nudge lower as banks and miners offset M&A boost

London stocks were a little lower by midday with weakness in the banking and mining sectors weighing on the index, although Standard Life and Aberdeen Asset Management rallied on deal news.

The FTSE 100 was down 0.3% to 7,350.68.

In corporate news, Standard Life and Aberdeen Asset Management surged after agreeing terms for an £11bn merger, having revealed talks over the weekend. The deal will see Aberdeen shareholders own roughly a third of the enlarged company and Standard Life the rest. The two companies will initially have an equal number of seats on the board.

Budget-airline easyJet flew higher after it reported an 8.2% rise in passenger numbers in February and said the load factor, which gauges how full the planes actually are, rose 1.6 percentage points to 92%. It was also propelled higher by an upgrade from Kepler Cheuvreux.

BT Group nudged up after saying it would pay £1.18bn for the rights to broadcast all UEFA Champions League and Europa League football.

Informa was on the front foot after it posted its final results for the 12 months to 31 December, with revenue up 11% to £1.35bn during the year, and adjusted operating profit up 13.8% to £416.1m.

Ultra Electronics rallied as strong cash generation and order intake helped the company drive full-year bottom-line growth despite delays to a small number of export contracts. The defence electronics specialist saw full-year 2016 top-line growth of 8.2% to £785.58m, while underlying profits before tax increased 6.9% to £120.1m.

Challenger bank Shawbrook ticked up after it announced late on Friday that its private equity backer Pollen Street and BC Partners had teamed up to propose taking it private less than two years after bringing it to market.

Acacia Mining was under the cosh after a downgrade by Jefferies, Berendsen was hit by a downgrade from HSBC and pub group JD Wetherspoon fell back after Shore Capital and Peel Hunt cut their recommendations on the stock.

Banks were under pressure, with RBS and Lloyds both lower after Deutsche Bank announced that it is planning an €8bn euro share sale to bolster its capital position.

Heavily-weighted mining shares were also on the back foot after China – a major consumer of metals – said over the weekend that it is now targeting growth of 6.5% this year, down a touch from last years’ growth rate of 6.7% and from the government’s target growth range of 6.5% to 7% in 2016.

Anglo American, Fresnillo, Glencore, Antofagasta, Rio Tinto and BHP Billiton were all weaker.

Aside from corporate news, investors remained focus on the prospect of another rate hike by the US Federal Reserve, after chair Janet Yellen signalled on Friday that a rise is on the cards later in March.

During a speech in Chicago, Yellen said: “We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.

"Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”

Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, said: “Fed chair Janet Yellen confirmed that this week's US employment numbers are really the only factor that could possibly stand in the way of a March rate rise, so markets are in a wait and see mode and are likely to remain largely range bound until confirmation is delivered on Friday.”

The non-farm payrolls report is due at the end of the week.

In addition, market participants were keeping an eye on geopolitical developments after North Korea fired four ballistic missiles into the waters off its east coast early on Monday, Seoul time.

Market Movers

FTSE 100 (UKX) 7,350.68 -0.32%
FTSE 250 (MCX) 18,875.92 -0.04%
techMARK (TASX) 3,449.86 0.11%

FTSE 100 - Risers

Standard Life (SL.) 400.20p 5.73%
ITV (ITV) 210.20p 3.50%
International Consolidated Airlines Group SA (CDI) (IAG) 553.50p 1.84%
Marks & Spencer Group (MKS) 336.70p 1.72%
Taylor Wimpey (TW.) 185.80p 1.53%
easyJet (EZJ) 971.00p 1.52%
Convatec Group (CTEC) 254.90p 1.51%
Persimmon (PSN) 2,103.00p 1.11%
Informa (INF) 680.50p 1.04%
Aviva (AV.) 514.00p 0.98%

FTSE 100 - Fallers

Anglo American (AAL) 1,240.50p -2.51%
Fresnillo (FRES) 1,379.00p -2.41%
Mediclinic International (MDC) 730.50p -2.08%
Royal Bank of Scotland Group (RBS) 242.30p -1.90%
Glencore (GLEN) 332.00p -1.85%
WPP (WPP) 1,730.00p -1.65%
Lloyds Banking Group (LLOY) 67.37p -1.53%
Rio Tinto (RIO) 3,291.50p -1.45%
Antofagasta (ANTO) 808.50p -1.40%
BHP Billiton (BLT) 1,344.00p -1.36%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 2,101.00p 6.00%
Aberdeen Asset Management (ADN) 300.00p 4.75%
Man Group (EMG) 146.90p 3.82%
Jupiter Fund Management (JUP) 433.90p 2.58%
Ashmore Group (ASHM) 368.20p 2.31%
IP Group (IPO) 154.20p 1.72%
Carillion (CLLN) 219.70p 1.71%
Cobham (COB) 130.00p 1.56%
CMC Markets (CMCX) 122.00p 1.33%
Savills (SVS) 878.50p 1.33%

FTSE 250 - Fallers

Acacia Mining (ACA) 420.50p -8.79%
Berendsen (BRSN) 792.50p -3.76%
Vedanta Resources (VED) 861.50p -3.37%
Evraz (EVR) 223.80p -2.95%
Wetherspoon (J.D.) (JDW) 960.50p -2.93%
Kaz Minerals (KAZ) 505.50p -2.69%
Tullow Oil (TLW) 264.10p -2.44%
BGEO Group (BGEO) 2,871.00p -2.01%
Go-Ahead Group (GOG) 1,904.00p -1.91%
TalkTalk Telecom Group (TALK) 168.30p -1.81%