London midday: Stocks nudge lower as Unilever weighs

Stocks in London reversed earlier small gains to trade a little lower by midday on Monday, with a weak performance from Unilever weighing on the index and activity more subdued than usual due to US markets being closed for Presidents Day.

Meanwhile, Brexit was in focus as the House of Lords was set to debate the Article 50 bill.

IG analyst Joshua Mahony said: “Whilst Parliament decided it was largely down to the Prime Minister to decide when to enact article 50, there are fears that the House of Lords will attempt to make amendments. Given the holiday over in the US, traders will be keeping a keen eye on the pound for any significant volatility as the House of Lords discusses whether to approve the Brexit bill.

He said that, given Theresa May’s rebuttal of the petition to have Trump’s invite revoked, there was unlikely to be any major shift in the government’s position on this.

In corporate news, Unilever sank as Kraft Heinz ditched its plans to take over the Marmite owner, just two days after it emerged the London-listed consumer goods giant had rejected a $143bn offer.

Housebuilder Bovis Homes slumped after it reported a 3% drop in full-year pre-tax profit to £155m that missed analysts’ expectations and said it would build fewer homes this year.

Shares in Interserve tanked after the construction and support services group said exiting the energy-from-waste market was likely to cost £160m, up from a previous provision of £70m.

On the upside, Royal Bank of Scotland rallied after saying it will abandon plans to sell its Williams & Glyn business and instead provide funds to help challenger banks, if a Treasury proposal is accepted by the European Commission.

Aerospace and defence group Rolls-Royce advanced after Goldman Sachs upgraded it to ‘buy’ from ‘neutral’, lifting the price target to 1,030p from 743p and adding the stock to its ‘Conviction’ list, saying the company has the potential to substantially increase free cash flow between now and 2020.

Retail property group Hammerson gained ground as it said full year adjusted profits rose 9.4% to £230.7m on a jump in net rental income to £346.5m from £318.6m.

Direct Line racked up healthy gains after the insurer said new rules determining lump sum payouts for injury claims would have less of an impact on the company than it previously thought.

Vedanta Resources pushed up as its third-quarter revenue and earnings rose on the back of commodity prices and a ramp up of aluminium, power and ore capacities.

Tullow Oil gushed higher as Jefferies upgraded the stock to ‘buy’ from ‘underperform’ and lifted the price target to 340p from 260p.

On the data front, market participants were mulling over the CBI's industrial trends survey for February, which revealed that UK manufacturer's order books climbed to a two-year high.

The balance of total orders over the three months was +8, up from the +5 in the previous survey and beating the consensus forecast of a small dip to +3. The balance is not seasonally adjusted.

This came from the difference between the 27% of businesses that reported total orders were above normal and the 19% that said orders were below normal, giving the highest balance since February 2015.

Earlier, the latest figures from property website Rightmove showed growth in house prices slowed to the lowest rate in nearly four years this month. Prices were up 2.3%, marking the slowest rate since April 2013.

Market Movers

FTSE 100 (UKX) 7,286.10 -0.19%
FTSE 250 (MCX) 18,694.31 -0.07%
techMARK (TASX) 3,351.19 -0.04%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 257.70p 6.31%
Rolls-Royce Holdings (RR.) 699.00p 4.95%
Hammerson (HMSO) 581.50p 3.01%
Direct Line Insurance Group (DLG) 364.50p 3.00%
Merlin Entertainments (MERL) 501.00p 2.29%
BT Group (BT.A) 321.75p 1.79%
Antofagasta (ANTO) 849.50p 1.49%
Standard Life (SL.) 372.50p 1.44%
Glencore (GLEN) 323.55p 1.28%
Prudential (PRU) 1,633.00p 1.18%

FTSE 100 - Fallers

Unilever (ULVR) 3,518.00p -7.35%
Pearson (PSON) 645.50p -3.44%
Mediclinic International (MDC) 804.50p -2.84%
Imperial Brands (IMB) 3,721.00p -1.59%
Coca-Cola HBC AG (CDI) (CCH) 1,958.00p -1.56%
Standard Chartered (STAN) 761.20p -1.53%
Barratt Developments (BDEV) 513.00p -1.44%
Taylor Wimpey (TW.) 175.20p -1.30%
Capita (CPI) 515.50p -1.25%
GKN (GKN) 343.00p -1.24%

FTSE 250 - Risers

Tullow Oil (TLW) 267.20p 3.05%
AO World (AO.) 161.00p 2.68%
OneSavings Bank (OSB) 397.00p 2.53%
Workspace Group (WKP) 790.50p 2.40%
SIG (SHI) 111.00p 2.30%
Cairn Energy (CNE) 228.00p 2.15%
Inmarsat (ISAT) 627.00p 1.95%
Nostrum Oil & Gas (NOG) 468.80p 1.91%
P2P Global Investments (P2P) 808.00p 1.89%
Virgin Money Holdings (UK) (VM.) 345.00p 1.62%

FTSE 250 - Fallers

Bovis Homes Group (BVS) 758.50p -9.81%
BGEO Group (BGEO) 2,837.00p -8.66%
Petra Diamonds Ltd.(DI) (PDL) 142.10p -4.25%
Essentra (ESNT) 471.80p -2.60%
PayPoint (PAY) 960.50p -2.34%
PZ Cussons (PZC) 314.60p -2.30%
Cobham (COB) 110.90p -2.20%
CYBG (CYBG) 268.70p -2.11%
Berkeley Group Holdings (The) (BKG) 2,885.00p -1.80%
Euromoney Institutional Investor (ERM) 1,081.00p -1.73%