London midday: Stocks push lower as pound gains ground; oil in focus

London stocks had extended losses by midday on Friday - the first anniversary of the Brexit vote - as the pound ticked higher after Theresa May's meeting with EU leaders in Brussels.

The FTSE 100 was down 0.6% to 7,397.46, while the pound was up 0.5% against the dollar at 1.2740 and 0.3% firmer versus the euro at 1.1409. A stronger pound tends to dent the index as around 70% of its constituents derive their earnings from overseas.

Meanwhile, oil prices were recovering from heavy losses earlier in the week when they fell into bear market territory on the back of worries about oversupply. West Texas Intermediate and Brent crude were up 0.4% to $42.92 a barrel and $45.41, respectively. Oanda analyst Craig Erlam argued that there was little reason to believe the rise in oil prices was anything more than a dead cat bounce, adding that next week "may be another painful one".

In her meeting with leaders at the EU summit on Thursday, Prime Minister Theresa May unveiled what she called a "fair and serious" offer for EU citizens living in the UK. May said that around three million EU citizens living in the UK would be allowed to stay on after Brexit, but this would depend on Britons being granted the same rights by EU states.

The plan, which will be published in full on Monday, would allow EU migrants living in the UK for more than five years to stay, with the same rights as UK citizens to healthcare, education, pensions and benefits. Meanwhile, those who have been in the UK for less than five years will be given the chance to meet the five-year threshold for "settled status".

May said: "The UK's position represents a fair and serious offer, one aimed at giving as much certainty as possible to citizens who have settled in the UK, building careers and lives and contributing so much to our society.''

German Chancellor Angela Merkel said the proposals were a "good start" but added that there were still many issues that needed to be resolved.

Spreadex analyst Connor Campbell said: "The pound ignored memories of last year’s Brexit vote - which is somehow 12 months to the day - to instead focus on whatever slim positives it could muster. That there appears to be an open dialogue between Theresa May and her European counterparts about the position of EU nationals in the UK and vice-versa has cheered up the currency. So too has Kristen Forbes’ parting shot at the Bank of England, the now former MPC member stating that a rate hike ‘should not be delayed any longer’."

In corporate news, Rio Tinto nudged lower after saying it has completed its bond tender and redemption exercises and has cut gross debt by a further $2.5bn (£1.97bn).

Workspace ticked up as it announced that it acquired Salisbury House at 28-31 Finsbury Circus, London EC2, for a cash consideration of £158.7m.

Shares in 888 and GVC Holdings retreated after the Competition and Markets Authority announced that it will be taking action against online gambling companies it suspects have been breaking consumer law.

In broker action, Centrica and ITV were boosted by upgrades at JPMorgan Cazenove and Morgan Stanley, respectively, while Ascential got a leg up from a Peel Hunt upgrade to 'add'.

On the downside, however, BAE Systems fell after JPM cut the stock to 'neutral' while Domino's Pizza slumped on a Berenberg downgrade.

Market Movers

FTSE 100 (UKX) 7,397.46 -0.56%
FTSE 250 (MCX) 19,643.79 -0.07%
techMARK (TASX) 3,624.20 -0.47%

FTSE 100 - Risers

ITV (ITV) 181.10p 2.37%
Fresnillo (FRES) 1,597.00p 2.37%
Next (NXT) 4,055.00p 1.48%
Centrica (CNA) 208.50p 1.02%
Land Securities Group (LAND) 1,027.00p 0.98%
Provident Financial (PFG) 2,470.00p 0.94%
Randgold Resources Ltd. (RRS) 7,145.00p 0.92%
Hammerson (HMSO) 587.00p 0.86%
Marks & Spencer Group (MKS) 341.80p 0.86%
British Land Company (BLND) 623.50p 0.73%

FTSE 100 - Fallers

Smurfit Kappa Group (SKG) 2,350.00p -2.85%
Mediclinic International (MDC) 756.00p -2.39%
Johnson Matthey (JMAT) 2,880.00p -1.97%
Shire Plc (SHP) 4,538.50p -1.89%
Associated British Foods (ABF) 2,903.00p -1.76%
Carnival (CCL) 5,125.00p -1.73%
BAE Systems (BA.) 654.00p -1.58%
AstraZeneca (AZN) 5,423.00p -1.54%
CRH (CRH) 2,797.00p -1.51%
Diageo (DGE) 2,303.50p -1.39%

FTSE 250 - Risers

Ascential (ASCL) 327.40p 3.74%
Man Group (EMG) 156.10p 3.72%
Carillion (CLLN) 199.10p 3.05%
Hochschild Mining (HOC) 282.80p 2.65%
Drax Group (DRX) 338.10p 2.52%
Kaz Minerals (KAZ) 486.90p 2.46%
Halfords Group (HFD) 351.30p 2.27%
Dunelm Group (DNLM) 623.00p 1.80%
Weir Group (WEIR) 1,768.00p 1.49%
Dixons Carphone (DC.) 303.90p 1.47%

FTSE 250 - Fallers

Domino's Pizza Group (DOM) 275.90p -5.09%
Inmarsat (ISAT) 785.00p -3.80%
Go-Ahead Group (GOG) 1,758.00p -2.66%
Nostrum Oil & Gas (NOG) 457.80p -2.60%
Melrose Industries (MRO) 254.60p -2.53%
Ferrexpo (FXPO) 181.70p -2.36%
SSP Group (SSPG) 483.40p -2.32%
JD Sports Fashion (JD.) 388.00p -2.14%
NMC Health (NMC) 2,244.00p -2.09%
Evraz (EVR) 185.70p -2.06%