London midday: Ukraine ceasefire helps UK stocks snap four-day losing streak

Concerns about Greece were still weighing on sentiment on Thursday, though reports of progress in eastern Ukraine gave UK stocks a boost while investors digested comments about deflation by the Bank of England.

London’s FTSE 100 was up 0.2% at 6,830 by midday, bouncing slightly after four straight days of losses.

Russian president Vladimir Putin on Thursday morning confirmed that the country has reached a ceasefire agreement on the Ukraine crisis which will come into effect on Sunday. The ceasefire follows 15 hours of talks with Ukrainian president Petro Poroshenko, who had earlier said that Russian conditions during the talks were “unacceptable”.

Meanwhile, the International Monetary Fund (IMF) agreed to loan Ukraine $17.5bn as part of a new economic reform programme. IMF managing director Christine Lagarde said she hoped the implementation of the programme “can represent a turning point for Ukraine”.

Over in Brussels, Wednesday evening's emergency Eurogroup meeting about Greece proved inconclusive, though this was widely expected.

“The meeting was the first platform where formal negotiations began, but not necessarily where decisions were due to be made. This being the first formal meeting, both sides stood firm on their positions,” said economist Gizem Kara from BNP Paribas.

Inflation Report and RICS house prices

The Bank of England’s Inflation Report released at 10:30 showed that policymakers expect the UK to enter deflation “at some point in the first half of 2015”, though the period of falling prices would only be temporary.

However, governor Mark Carney downplayed the significance of deflation, due almost entirely to weaker oil prices, as he upgraded his growth forecasts for the economy for 2016 and 2017.

“With the Monetary Policy Committee fairly relaxed about the prospect for deflation, we still think there is a reasonable chance of a hike before the end of this year,” said economist Vicky Redwood from Capital Economics.

In other news, the Royal Institution of Chartered Surveyors said its UK house-price balance fell to +7 last month from +12 in December, showing that growth - while still positive - slowed to its lowest level since May 2013. Analysts had expected no change and cited a bad read-across for housebuilders and estate agents, especially those exposed to London.

Coca-Cola HBC gains on ceasefire news, Rio impresses with returns

Stocks exposed to Russia and Ukraine, such as Coca-Cola HBC, Evraz and Ferrexpo, rose strongly after a ceasefire was agreed between the two nations.

Mining group Rio Tinto gained as it pledged to return nearly $6bn to shareholders in respect of 2014 after hiking its full-year dividend by 12% and announcing a $2bn share buyback. Other miners such as Glencore and Anglo American were also performing well.

Imperial Tobacco was also on the rise after a strong first-quarter performance from its growth brands left it confident of hitting its full-year targets.

In the FTSE 250, Zoopla disappointed with an 11% year-on-year decrease in total advertising members in the first quarter, which it claims was due to the new OnTheMarket website of Agents’ Mutual which launched in January.

The oil and gas sector was lower despite a bounce in crude prices as heavyweights BP and Shell went ex-dividend. Tullow Oil was also feeling the effects of a downgrade by Societe General from ‘buy’ to ‘hold’.

Market Movers
techMARK 3,111.14 +0.05%
FTSE 100 6,830.40 +0.18%
FTSE 250 16,732.79 +0.60%

FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,164.00p +6.69%
Rio Tinto (RIO) 3,078.50p +3.60%
Anglo American (AAL) 1,153.50p +2.67%
Glencore (GLEN) 278.65p +2.56%
Royal Bank of Scotland Group (RBS) 387.40p +2.38%
Hargreaves Lansdown (HL.) 989.50p +2.22%
Morrison (Wm) Supermarkets (MRW) 183.70p +2.17%
Intertek Group (ITRK) 2,500.00p +2.12%
Taylor Wimpey (TW.) 142.70p +1.93%
Antofagasta (ANTO) 703.50p +1.88%

FTSE 100 - Fallers
Tullow Oil (TLW) 376.10p -2.21%
Royal Dutch Shell 'B' (RDSB) 2,207.50p -1.65%
Royal Dutch Shell 'A' (RDSA) 2,113.50p -1.54%
Reckitt Benckiser Group (RB.) 5,690.00p -1.47%
Compass Group (CPG) 1,120.00p -1.41%
United Utilities Group (UU.) 972.50p -1.37%
Sage Group (SGE) 475.00p -1.29%
GlaxoSmithKline (GSK) 1,496.00p -1.19%
Diageo (DGE) 1,864.00p -1.09%
Centrica (CNA) 287.70p -1.07%

FTSE 250 - Risers
Lancashire Holdings Limited (LRE) 641.00p +4.65%
Vedanta Resources (VED) 450.60p +4.47%
Allied Minds (ALM) 474.00p +4.06%
Hunting (HTG) 495.90p +3.98%
Smith (DS) (SMDS) 319.40p +3.73%
Keller Group (KLR) 939.00p +3.59%
Evraz (EVR) 191.50p +3.40%
DCC (DCC) 3,820.00p +3.33%
Go-Ahead Group (GOG) 2,471.00p +3.13%
Morgan Advanced Materials (MGAM) 311.00p +2.98%

FTSE 250 - Fallers
Afren (AFR) 8.20p -8.38%
AO World (AO.) 306.10p -5.50%
Jimmy Choo (CHOO) 159.20p -4.27%
Game Digital (GMD) 260.20p -3.31%
Zoopla Property Group (WI) (ZPLA) 181.00p -2.69%
Hellermanntyton Group (HTY) 310.10p -2.42%
Nostrum Oil & Gas (NOG) 513.50p -2.19%
COLT Group SA (COLT) 143.30p -2.18%
Riverstone Energy Limited (RSE) 910.50p -2.10%
Diploma (DPLM) 780.00p -1.89%