London midday: Stocks slide as Trump trade fades

Equity markets in London fell on Wednesday, with cyclical stocks on the back foot amid growing scepticism over whether US President Donald Trump will be able to deliver on his economic promises.

At midday, the FTSE 100 was down 0.8% to 7,316.28, while the mid-cap index was down 1.1% to just under 18,777.

The 'Trump trade' has seen stock markets soar to record highs since November, noted Oanda analyst Craig Erlam, as investors looked beyond some of the more unsavoury aspects of his mandate to focus solely on his growth agenda.

"However it’s now coming to the end of the first quarter and people are starting to question just how long these measures are going to take and whether they’ll get through Congress without compromises having to be made along the way," Erlam said.

"The difficulties facing Trump over the healthcare bill, something that should have been relatively straightforward for him to get support on given the Republicans staunch opposition to Obamacare, is casting serious doubt over his other policies. A failure to get this through could jeopardise his plans for tax cuts and large infrastructure projects, the very things that investors have strongly bought into since the election."

In the US on Tuesday, the Dow and the Nasdaq suffered their worst day since September, with financials – which have benefitted from hopes that President Trump will scale back bank regulation – taking the biggest hit.

Equipment rental firm Ashtead traded lower amid doubts over Trump's infrastructure spending plans. Investors had been hoping that the company, which generates about 90% of its profits in the US, would be handed a piece of the action.

Banks and miners were among the worst performers in London, with Standard Chartered, Barclays, RBS, Rio Tinto and BHP Billiton all lower.

Elsewhere, Kingfisher slumped after its annual results beat the City's profit forecasts thanks to strong growth from its Screwfix chain, but the company sounded a cautious note on its outlook.

International real estate advisor Savills was also in the red after it announced record results, with group revenue up 13% to £1.45bn, but said it was cautious on Brexit.

Acacia Mining was on the back foot after it said it has ended merger talks with Canada's Endeavour.

Ferrexpo reversed early losses to trade higher after saying it will start paying dividends again and posting a 20% jump in its 2016 earnings.

Housebuilder Redrow also reversed course and turned positive as it said its trading performance continues to be robust and it expects pre-tax profit for the year to the end of June 2017 to rise 22% from the prior year to at least £306m.

IT infrastructure provider Softcat gained ground as it said interim pre-tax profits rose to £20.9m from £15.4m on the back of a 28.9% jump in revenues to £378.5m thanks to double-digit growth in software, hardware and services.

Schroders was it by a downgrade from RBC Capital Markets, while Wood Group retreated after Jefferies downgraded it to 'underperform'.

Commercial laundry group Berendsen was in the red after a double downgrade by Credit Suisse, but Hunting was boosted by an upgrade from Barclays.

Adding to the gloomy mood, the latest survey from IHS Markit released earlier revealed that UK households were the most pessimistic about their financial prospects in March since November 2013 as rising inflation began to bite.

The survey also found that more than half of respondents expect the Bank of England to hike rates in the next 12 months.

Markit's Household Finance Index printed at 43.2 this month, well below the 50.0 no change reading and marking one of the weakest readings in the last two years.

Meanwhile, the index measuring expectations for finances in 12 months' time slumped to 45.3 from 48.1 in February, with people in the East Midlands the most downbeat about their financial prospects, followed by those in the North East.

Market Movers

FTSE 100 (UKX) 7,316.28 -0.84%
FTSE 250 (MCX) 18,783.12 -1.08%
techMARK (TASX) 3,432.95 -0.69%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,265.00p 0.97%
Fresnillo (FRES) 1,564.00p 0.71%
BT Group (BT.A) 328.30p 0.38%
Severn Trent (SVT) 2,411.00p 0.29%
AstraZeneca (AZN) 4,839.50p 0.27%
Relx plc (REL) 1,542.00p 0.26%
United Utilities Group (UU.) 1,009.00p 0.10%
Convatec Group (CTEC) 261.70p 0.08%
National Grid (NG.) 1,001.00p 0.05%
Mondi (MNDI) 1,928.00p -0.00%

FTSE 100 - Fallers

Kingfisher (KGF) 328.10p -5.06%
Standard Chartered (STAN) 709.20p -3.05%
Ashtead Group (AHT) 1,600.00p -2.97%
Barclays (BARC) 223.65p -2.76%
easyJet (EZJ) 983.00p -2.58%
Royal Bank of Scotland Group (RBS) 232.40p -2.43%
Rio Tinto (RIO) 3,247.50p -2.39%
International Consolidated Airlines Group SA (CDI) (IAG) 547.50p -2.32%
Rolls-Royce Holdings (RR.) 760.00p -2.31%
BHP Billiton (BLT) 1,255.00p -2.22%

FTSE 250 - Risers

Softcat (SCT) 362.70p 4.37%
Hochschild Mining (HOC) 281.70p 2.44%
Polymetal International (POLY) 1,029.00p 1.98%
Ferrexpo (FXPO) 166.00p 1.84%
Hunting (HTG) 550.00p 1.76%
HICL Infrastructure Company Ltd (HICL) 164.40p 1.36%
PayPoint (PAY) 990.00p 0.66%
William Hill (WMH) 281.90p 0.64%
Northgate (NTG) 553.00p 0.64%
Sophos Group (SOPH) 272.60p 0.59%

FTSE 250 - Fallers

Vedanta Resources (VED) 790.50p -6.56%
Evraz (EVR) 210.10p -5.06%
Clarkson (CKN) 2,817.00p -4.54%
Wizz Air Holdings (WIZZ) 1,606.00p -3.83%
Spectris (SXS) 2,421.00p -3.39%
Shawbrook Group (SHAW) 301.70p -3.30%
Berendsen (BRSN) 786.00p -3.26%
Metro Bank (MTRO) 3,181.00p -3.08%
Keller Group (KLR) 884.50p -3.07%
AO World (AO.) 139.20p -3.06%