London midday: FTSE maintains gain, sterling subdued as Johnson elected PM
London stocks were still in the green by midday on Tuesday as Boris Johnson was set to be crowned Prime Minister after winning the Tory leadership contest.
The FTSE 100 was up 0.6% at 7,561.92, while the pound was down 0.1% against the dollar at 1.2465 and 0.2% higher versus the euro at 1.1149, showing little reaction to news of Johnson's victory, which had been widely expected.
Before the announcement was made, Spreadex analyst Connor Campbell predicted that the pound may not react to a Johnson win, given "how locked on" his premiership appeared to be.
"The currency may save its bigger movements for later in the week, as the former Mayor of London’s Cabinet starts to take shape," he said.
Oanda analyst Craig Erlam said: "The question now is whether the pound can recover from its slump in the near term or whether the risk of no-deal is just too great and every passing week is seen to take us one week closer to the cliff-edge."
Earlier, the latest survey from the Confederation of British Industry showed that UK manufacturing orders fell at their fastest pace in the three months to July since the financial crisis.
The CBI's total orders balance fell to -34 this month from -15 in June, missing expectations for an unchanged reading.
Both new domestic and new export orders fell at their fastest respective paces since the financial crisis, while overall order books were below "normal" to the greatest extent since 2010.
Meanwhile, optimism among manufacturing firms fell to its lowest level since July 2016, just after the EU referendum.
CBI chief economist Rain Newton-Smith said: "As the tailwind from stockpiling weakens, clouds are gathering above the manufacturing sector. It’s being hit by the double-blow of Brexit uncertainty and slower global growth.
"With orders, employment, investment, output and business optimism all deteriorating among manufacturers, it’s crucial for the new Prime Minister to secure a Brexit deal ahead of the October deadline. And get on with pressing domestic priorities from improving our infrastructure to fixing the apprenticeship levy.
"This will allow firms to focus on investing in new technology and tackling the skill shortages that plague this sector."
In equity markets, paper and packaging group Mondi gained after saying that half-year underlying earnings would be higher than the €852m (£765m) reported in 2018 as it forecast a big jump in earnings per share. Peers Smurfit Kappa and DS Smith also racked up healthy gains.
Smith & Nephew was on the rise after an upgrade to 'buy' at Berenberg, while insurer Beazley advanced as it said first-half earnings nearly tripled compared to latest year and it expects double-digit premium growth over the year.
On the downside, Premier Inn owner Whitbread was weaker after a downgrade to 'underperform' at Bernstein.
Tesco, Sainsbury and Morrisons were all in the red as the latest data from market research firm Kantar showed that sales at Britain's big four supermarkets dipped 0.5% on the year over the last 12-week period, marking the first overall decline in the supermarket sector since June 2016.
Online trading platform IG Group lost ground after it reported a drop in annual profit as it took a hit from the implementation of tougher regulations.
Market Movers
FTSE 100 (UKX) 7,561.92 0.63%
FTSE 250 (MCX) 19,739.19 0.46%
techMARK (TASX) 3,692.92 0.56%
FTSE 100 - Risers
Melrose Industries (MRO) 191.75p 4.44%
Smith (DS) (SMDS) 380.80p 3.76%
Smurfit Kappa Group (SKG) 2,652.00p 2.95%
Johnson Matthey (JMAT) 3,184.00p 2.94%
NMC Health (NMC) 2,395.00p 2.92%
Mondi (MNDI) 1,840.50p 2.85%
Barclays (BARC) 160.04p 2.20%
Smiths Group (SMIN) 1,619.50p 2.02%
Standard Life Aberdeen (SLA) 307.40p 1.96%
Glencore (GLEN) 277.60p 1.95%
FTSE 100 - Fallers
Whitbread (WTB) 4,525.00p -3.42%
Ocado Group (OCDO) 1,190.50p -2.42%
Sainsbury (J) (SBRY) 202.40p -2.17%
Tesco (TSCO) 230.80p -1.87%
JD Sports Fashion (JD.) 608.00p -1.75%
Auto Trader Group (AUTO) 535.98p -1.47%
Morrison (Wm) Supermarkets (MRW) 202.90p -1.36%
Fresnillo (FRES) 782.00p -1.31%
Burberry Group (BRBY) 2,279.00p -1.17%
SEGRO (SGRO) 745.00p -1.09%
FTSE 250 - Risers
Beazley (BEZ) 557.00p 3.82%
Aston Martin Lagonda Global Holdings (AML) 1,032.50p 3.81%
Hays (HAS) 152.30p 3.54%
Victrex plc (VCT) 2,011.40p 3.20%
CYBG (CYBG) 205.30p 3.09%
Wood Group (John) (WG.) 535.57p 2.76%
Weir Group (WEIR) 1,519.00p 2.50%
TI Fluid Systems (TIFS) 199.60p 2.46%
IMI (IMI) 1,017.50p 2.38%
IWG (IWG) 370.30p 2.26%
FTSE 250 - Fallers
Amigo Holdings (AMGO) 155.60p -5.81%
Kainos Group (KNOS) 574.32p -3.64%
FDM Group (Holdings) (FDM) 868.00p -3.13%
Ted Baker (TED) 922.00p -3.05%
Moneysupermarket.com Group (MONY) 359.50p -2.84%
NewRiver REIT (NRR) 170.89p -2.68%
Funding Circle Holdings (FCH) 118.60p -2.63%
Sophos Group (SOPH) 445.90p -2.00%
Hochschild Mining (HOC) 212.80p -1.94%
Games Workshop Group (GAW) 4,658.28p -1.72%