London midday: Stocks slide amid concern about Trump's travel ban

London stocks declined on Monday after US President Donald Trump announced a curb on refugees and a travel ban on arrivals from Muslim countries.

Just before noon the FTSE 100 was down 0.70% at 7,134.15 points.

The pound fell 0.30% versus the dollar to $1.2517 and was flat against the euro at €1.1730.

On Friday, Trump put a 120-day hold on allowing refugees into the country, an indefinite ban on any refugees from Syria and a 90-day ban on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. The ban also applies to anyone with dual nationality including any of those countries.

“The resulting press criticism and mass protests appear to have pushed some investors to the sidelines as rising uncertainty in the ability of the President not to cause damage to the US economy starts to increase, and uncertainty rarely bodes well for financial markets,” said Michael Hewson, chief market analyst at CMC Markets.

In the eurozone, traders were digesting a survey from the European Commission on economic sentiment. The eurozone economic sentiment index rose to 108.2 in January from 107.8 in December, beating expectations for an unchanged reading.

The Commission also revealed UK consumer confidence fell to -5.1 in January from -4.6 in December, amid mounting concerns about rising inflation following the Brexit vote.

“Purchasing power looks set to be increasingly squeezed as inflation rises appreciably due to the weakened pound and earnings growth is pressurised by companies looking to limit pay to contain their total costs,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“Indeed, it looks highly possible that inflation will move above earnings growth in 2017.”

In corporate news, travel shares dropped on worries about the US travel ban, including Intercontinental Hotels Group and International Consolidated Airlines.

For Easyjet there was a further reason for its shares to fly lower as Cantor Fitzgerald downgraded its stance on the stock to ‘hold’ from ‘buy’, saying it reckons the shares will trade in a fairly tight range for the next quarter.

Aggreko’s shares fell after Deutsche Bank cut its recommendation on the stock to ‘hold’ from ‘buy’ and lowered the target price to 1,000p from 1,050p.

Lloyds Banking Group was also in the red as the UK government cut its stake in the bank to just under 5%, or 3.57bn shares, as it looks to take the bank private again in the next few months. This is down from 4.24bn shares previously.

On the upside, FTSE 100 telecoms group Vodafone was in the black after confirming it is in talks over merging its Indian business with Idea Cellular, which is part of the Aditya Birla Group.

DCC rallied after Goldman Sachs upgraded the stock to ‘buy’ from ‘neutral’ and lifted the price target to 7,400p from 7,000p, saying recent underperformance provides an attractive entry point.

Engineer WS Atkins was a higher riser following a report in The Times that it has been approached by US company CH2M for a possible $4bn merger.

Market Movers

FTSE 100 (UKX) 7,130.82 -0.75%
FTSE 250 (MCX) 18,102.99 -0.48%
techMARK (TASX) 3,229.46 -0.10%

FTSE 100 - Risers

DCC (DCC) 6,350.00p 2.58%
Vodafone Group (VOD) 198.30p 2.56%
Convatec Group (CTEC) 247.60p 1.10%
Sainsbury (J) (SBRY) 257.30p 1.10%
Antofagasta (ANTO) 831.50p 1.09%
Kingfisher (KGF) 335.30p 0.84%
Paddy Power Betfair (PPB) 8,170.00p 0.80%
United Utilities Group (UU.) 905.50p 0.67%
ITV (ITV) 205.50p 0.39%
Merlin Entertainments (MERL) 484.70p 0.27%

FTSE 100 - Fallers

Old Mutual (OML) 205.50p -3.61%
Tesco (TSCO) 200.00p -3.17%
Mediclinic International (MDC) 788.00p -2.78%
Barclays (BARC) 225.40p -2.25%
Admiral Group (ADM) 1,765.00p -2.22%
Rolls-Royce Holdings (RR.) 671.50p -2.11%
Diageo (DGE) 2,201.00p -1.92%
Hikma Pharmaceuticals (HIK) 1,820.00p -1.89%
Royal Bank of Scotland Group (RBS) 227.80p -1.73%
Capita (CPI) 501.00p -1.67%

FTSE 250 - Risers

Atkins (WS) (ATK) 1,471.00p 5.07%
Hill & Smith Holdings (HILS) 1,170.00p 3.08%
Zoopla Property Group (ZPLA) 372.00p 2.20%
Synthomer (SYNT) 443.20p 1.93%
Pagegroup (PAGE) 440.70p 1.75%
Restaurant Group (RTN) 291.50p 1.57%
Allied Minds (ALM) 399.60p 1.52%
IP Group (IPO) 195.50p 1.45%
JPMorgan Indian Investment Trust (JII) 637.00p 1.27%
SSP Group (SSPG) 395.20p 1.18%

FTSE 250 - Fallers

Drax Group (DRX) 367.50p -3.77%
Aggreko (AGK) 1,022.00p -3.49%
Booker Group (BOK) 205.00p -3.44%
Aberdeen Asset Management (ADN) 262.00p -3.36%
Amec Foster Wheeler (AMFW) 450.70p -2.70%
Investec (INVP) 559.50p -2.70%
Cairn Energy (CNE) 232.80p -2.18%
Tullow Oil (TLW) 293.90p -2.03%
Nostrum Oil & Gas (NOG) 440.30p -1.94%
Vectura Group (VEC) 127.80p -1.92%