London midday: Stocks inch lower on Scottish vote concerns

The FTSE 100 was 0.1% lower at 6,829 by midday, though it traded within a narrow range for most of the morning.

Equity markets were choppy on Monday on the back of growing support for the 'yes' campaign ahead of the Scottish referendum on 18 September. A Yougov survey at the weekend showed that supporters of independence took the lead in the opinion polls for the first time in the campaign.

According to analyst Jameel Ahman from FXTM, investors are on "high alert" ahead of the vote and that a potential 'yes' vote "threatens market stability". The GDP/USD was continuing to trade a 1.6112, a level not seen since November 2013.

Eyes will be kept on Bank of England governor Mark Carney who is due to speak in Liverpool about UK wages on Tuesday, but is likely to be faced with some questions regarding Scotland.

"If Carney suggests that this political uncertainty will further delay an interest rate hike, the Cable could reach the low 1.60’s today," Admad said.

In other news, a package of new sanctions was agreed against Russia despite a ceasefire between Ukraine and pro-Moscow rebels largely holding following months of fighting.

The European Union’s (EU) sanctions include restrictions on Russian state-owned oil companies raising money on European financial markets. The EU said the new measures will come into effect in the next few days.

UK data mixed

UK industrial production expanded by 0.5% in July after a 0.3% increase in June. The consensus forecast was for growth of 0.2%.

The UK goods trade deficit unexpectedly widened to £10.2bn in July from £9.4bn in June. Analysts had expected it to narrow to £9.1bn.

Later on, the NIESR gives its latest UK gross domestic product growth estimate for the three months August, which is expected to remain unchanged from the 0.6% seen in July.

Petra and WM Morrison lead the rise

FTSE 250-listed Petra Diamonds jumped after the miner announced the recovery of an "exceptional" 232.08-carat white diamond at its Cullinan mine in South Africa. Westhouse upgraded the stock from 'add' to 'buy' as a result, saying that the diamond could sell for as much as $15m.

Supermarket chain WM Morrison was also on the rise after Citigroup upgraded its rating on the stock to 'buy'. The bank said that the company's 7.5% dividend yield is "safe", playing down recent concerns that have weighed on the shares in recent weeks.

Hotel, restaurant and Costa owner Whitbread was swinging between gains and losses but was more or less flat at midday despite releasing a strong second-quarter trading update which showed that sales had grown 12.8%.

Banking stocks were recovering after heavy falls on Monday on the back of concerns about the Scottish referendum's impact on business. Lloyds, Barclays and RBS were putting in decent gains.

Glasgow-based engineer Weir and Edinburgh-headquartered Standard Life, which had also both fallen sharply the previous session on Scottish concerns, were rebounding slightly in morning trade.

Market Movers

techMARK 2,857.49 +0.10%
FTSE 100 6,829.17 -0.08%
FTSE 250 15,772.96 +0.03%

FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 174.40p +2.59%
Persimmon (PSN) 1,342.00p +2.36%
Lloyds Banking Group (LLOY) 73.57p +1.90%
Marks & Spencer Group (MKS) 434.90p +1.59%
Barratt Developments (BDEV) 365.50p +1.30%
Smiths Group (SMIN) 1,356.00p +1.19%
SABMiller (SAB) 3,460.50p +1.02%
Meggitt (MGGT) 475.70p +1.00%
Petrofac Ltd. (PFC) 1,106.00p +1.00%
Wolseley (WOS) 3,279.00p +0.99%

FTSE 100 - Fallers
Royal Dutch Shell 'B' (RDSB) 2,498.50p -1.65%
BG Group (BG.) 1,190.50p -1.45%
SSE (SSE) 1,456.00p -1.42%
Royal Dutch Shell 'A' (RDSA) 2,403.50p -1.35%
Unilever (ULVR) 2,697.00p -1.14%
British Land Co (BLND) 720.00p -1.10%
BP (BP.) 464.05p -0.99%
Land Securities Group (LAND) 1,061.00p -0.93%
Coca-Cola HBC AG (CDI) (CCH) 1,416.00p -0.91%
Severn Trent (SVT) 1,961.00p -0.76%

FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 188.00p +6.33%
Inmarsat (ISAT) 729.50p +3.48%
Oxford Instruments (OXIG) 1,178.00p +3.06%
Ocado Group (OCDO) 314.00p +2.82%
Jardine Lloyd Thompson Group (JLT) 1,013.00p +2.74%
Fenner (FENR) 359.00p +2.57%
Just Eat (JE.) 298.00p +2.41%
Greencore Group (GNC) 276.00p +2.22%
Supergroup (SGP) 1,224.00p +2.00%
Taylor Wimpey (TW.) 112.40p +1.81%

FTSE 250 - Fallers
Daejan Holdings (DJAN) 4,810.00p -2.41%
AO World (AO.) 204.00p -2.39%
Paragon Group Of Companies (PAG) 343.80p -2.33%
Entertainment One Limited (ETO) 334.60p -2.22%
Ted Baker (TED) 1,781.00p -2.20%
Telecity Group (TCY) 755.50p -1.88%
Rightmove (RMV) 2,360.00p -1.75%
Pennon Group (PNN) 801.50p -1.72%
Great Portland Estates (GPOR) 632.50p -1.71%
Hays (HAS) 129.30p -1.60%