London midday: Stocks pare losses; AB Foods slides after update
London stocks had pared earlier losses to trade just a touch lower by midday on Thursday, as investors digested news that China had cut lending rates.
The FTSE 100 was down just 0.1% at 7,584.74.
Neil Wilson, chief market analyst at Markets.com, said: "After a decent start for stocks in Europe, the main bourses turned broadly lower, after more selling in the US, whilst Asian markets snapped a week’s run of losses as China cut benchmark mortgage rates.
"As the UK and US tighten policy, they are leaving many peers behind...The Bank of Canada might hike next week, the RBA likely later this year. The ECB is way behind and looks deaf to cries of inflation - German PPI inflation rose to a record-breaking 24.2% in December, data this morning shows.
"The FTSE 100 marked a fresh post-pandemic high at almost 7,620 in early trade but turned lower to trade down about 0.3% after the first hour of trade."
Overnight, China's central bank trimmed two key lending rates in a bid to bolster activity in the country's property sector and in order to help small businesses.
The People's Bank of China cut its one-year loan prime rate by 10 basis points from 3.8% to 3.7%, as expected by economists, and the five-year loan prime rate by five basis points from 4.65% to 4.60%.
The reduction in the 10-year rate was the first since April 2020 and although the market consensus had been for a larger reduction, it was the first time in 21 months that both lending rates were reduced simultaneously.
In UK equity markets, Associated British Foods fell after it said fourth-quarter sales at its Primark stores had been hit by the surge in Covid Omicron cases, but were now showing signs of recovery as it maintained full-year guidance.
Shell and BP gushed lower as oil prices fell, while Compass and Games Workshop declined as they traded without entitlement to the dividend. Compass was also hit by a downgrade to ‘hold’ from ‘buy’ at Deutsche Bank.
On the upside, Rentokil was the top performer on the FTSE 100 after Citi upgraded the shares to ‘buy’ from ‘neutral’, arguing that the proposed acquisition of US rival Terminix could propel the company into the number 1 slot in US pest control.
Consumer goods giant Unilever advanced after it said late on Wednesday that it would not be lifting its £50bn offer for GlaxoSmithKline’s consumer healthcare business. Glaxo lost ground.
Spirent Communications gained after lifting its full-year expectations for adjusted operating profit.
Premier Foods rose as it said full-year profit was set to be above market expectations after three strong quarters of trading and after the Mr Kipling brand enjoyed its "biggest ever" Christmas.
Market Movers
FTSE 100 (UKX) 7,584.74 -0.06%
FTSE 250 (MCX) 22,714.28 0.26%
techMARK (TASX) 4,521.89 0.63%
FTSE 100 - Risers
Rentokil Initial (RTO) 530.80p 2.87%
Prudential (PRU) 1,321.00p 2.68%
Pearson (PSON) 677.40p 2.64%
Smith (DS) (SMDS) 391.50p 2.43%
Scottish Mortgage Inv Trust (SMT) 1,144.00p 2.33%
Hikma Pharmaceuticals (HIK) 2,065.00p 2.23%
London Stock Exchange Group (LSEG) 7,598.00p 2.12%
Burberry Group (BRBY) 1,904.50p 2.04%
Fresnillo (FRES) 856.20p 2.03%
Pershing Square Holdings Ltd NPV (PSH) 2,880.00p 1.95%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,057.00p -3.47%
Lloyds Banking Group (LLOY) 52.14p -3.23%
Royal Mail (RMG) 480.20p -2.30%
ITV (ITV) 115.90p -2.11%
Royal Dutch Shell 'A' (RDSA) 1,832.00p -2.00%
Royal Dutch Shell 'B' (RDSB) 1,834.00p -2.00%
NATWEST GROUP PLC ORD 100P (NWG) 245.00p -1.84%
Compass Group (CPG) 1,678.50p -1.81%
BP (BP.) 387.10p -1.78%
Barclays (BARC) 203.65p -1.59%
FTSE 250 - Risers
Spirent Communications (SPT) 245.60p 6.60%
Premier Foods (PFD) 116.80p 6.18%
Hochschild Mining (HOC) 130.60p 5.41%
Network International Holdings (NETW) 294.10p 5.34%
Fidelity China Special Situations (FCSS) 321.00p 4.90%
Trainline (TRN) 254.60p 4.77%
Trustpilot Group (TRST) 231.80p 4.51%
TUI AG Reg Shs (DI) (TUI) 254.10p 4.18%
Homeserve (HSV) 803.00p 3.21%
Petropavlovsk (POG) 16.00p 3.09%
FTSE 250 - Fallers
Safestore Holdings (SAFE) 1,262.00p -3.88%
Hiscox Limited (DI) (HSX) 953.80p -3.15%
Currys (CURY) 100.60p -2.99%
Countryside Properties (CSP) 320.40p -2.55%
Beazley (BEZ) 483.70p -2.52%
Harbour Energy (HBR) 355.40p -2.47%
Ultra Electronics Holdings (ULE) 3,026.00p -2.32%
Lancashire Holdings Limited (LRE) 542.00p -1.90%
Baltic Classifieds Group (BCG) 222.00p -1.77%
RHI Magnesita N.V. (DI) (RHIM) 3,606.00p -1.74%