London midday: Stocks down but off lows as gold shines

The FTSE 100 was down 0.2% at 7,399.73, while the pound was up 0.1% against the dollar at 1.2759 and 0.3% firmer versus the euro at 1.1205.

US President Trump has signed off on a new round of "hard-hitting" sanctions against Iran following its downing last week of a US surveillance drone. The measures will specifically target Supreme Leader Ayatollah Ali Khamenei and other Iranian officials. US Treasury Secretary Steven Mnuchin said they "go after the supreme leader's office and lock up literally billions more in assets".

Iranian Foreign Ministry spokesman Abbas Mousavi said the "fruitless sanctions" mean "the permanent closure of the road of diplomacy with the frustrated US administration".

With Middle East tensions high, investors opted for safe havens, pushing the price of gold to a six-year high of $1,438 an ounce overnight - its best level since May 2013.

Neil Wilson, chief market analyst at Markets.com, summed things up nicely: "Four things are really driving gold - falling yields, a weaker dollar, a soft macroeconomic outlook and geopolitical risks rising in the Middle East."

With gold on the rise, Fresnillo, Centamin, Hochschild Mining and Polymetal all rallied.

William Hill also bucked the trend as Morgan Stanley said US casino owner Eldorado's agreed merger with Caesars makes the London-listed company's position for US sports betting "more powerful, with wider market access, boosted revenues and potential optionality on brand, database and media assets".

"With US sports worth 35-55% of the current market cap, we would buy the shares here," MS said.

Experian was the biggest loser on the FTSE 100 after a downgrade to 'neutral' at Macquarie.

The credit-checking firm was closely followed by supermarket chains Morrisons and Tesco, as the latest Kantar data showed that sales at the retailers were down 0.1% and flat, respectively, in the 12 weeks to 16 June. The data also showed that Morrisons' market share fell to 10.4% from 10.6% the year before, while Tesco's declined to 27.3% from 27.7%.

Sainsbury's was also on the back foot. Although the figures showed its sales decline eased to 0.6% from 1.2% in the previous period, the chain's market share fell to 15.3% from 15.6% and it continued to underperform its 'big four' peers.

Oil services company Petrofac was weaker after a mixed trading update, while Imperial Leather maker PZ Cussons was hit by an initiation at 'sell' by Panmure Gordon.

Investors were also mulling the latest figures from the Confederation of British Industry, which showed that retail sales fell at their fastest rate since March 2009 in the year to June, with bad weather partly to blame.

The balance of retailers reporting year-on-year growth in sales volumes came in at -42% from -27% in May. Analysts had been expecting a reading of -10%.

The CBI said it was worth noting that the yearly drop in sales volumes was likely driven in part by the heatwave-induced boost to retail sales growth in June last year.

Grocers were the biggest contributors to the contraction in sales volumes, with a smaller contribution from the hardware & DIY and footwear and leather sub-sectors. The only sub-sector to see a positive sales growth balance was non-store, i.e. internet and mail order retailing.

Alpesh Paleja, CBI principal economist, said: "This month’s drop in sales should be taken with a pinch of salt, given the backdrop of last June’s heatwave and the start of the World Cup. But even accounting for both factors, underlying conditions on the High Street remain challenging. Retailers are having to continually compete for the attention of value-conscious shoppers, in the age of digital disruption.

"The new Prime Minister must help support retailers by reducing the high cumulative burden of costs they face. This should start by urgently reviewing the dire business rates system, which is unfairly impacting UK high streets and deterring much needed investment.”

Market Movers

FTSE 100 (UKX) 7,399.73 -0.23%
FTSE 250 (MCX) 19,232.02 -0.35%
techMARK (TASX) 3,615.10 -0.20%

FTSE 100 - Risers

Smith (DS) (SMDS) 356.40p 3.07%
3i Group (III) 1,083.75p 1.95%
Evraz (EVR) 649.60p 1.66%
Marks & Spencer Group (MKS) 207.00p 1.37%
Antofagasta (ANTO) 906.20p 1.36%
Fresnillo (FRES) 900.40p 1.35%
BHP Group (BHP) 1,998.60p 1.16%
SSE (SSE) 1,121.50p 1.08%
Mondi (MNDI) 1,764.00p 1.03%
Smurfit Kappa Group (SKG) 2,349.00p 0.99%

FTSE 100 - Fallers

Experian (EXPN) 2,408.00p -2.23%
Morrison (Wm) Supermarkets (MRW) 194.75p -2.14%
Tesco (TSCO) 226.70p -1.99%
Vodafone Group (VOD) 123.98p -1.79%
Flutter Entertainment (FLTR) 5,600.00p -1.58%
International Consolidated Airlines Group SA (CDI) (IAG) 445.80p -1.37%
Barclays (BARC) 146.58p -1.27%
Reckitt Benckiser Group (RB.) 6,272.00p -1.21%
Ocado Group (OCDO) 1,139.50p -1.13%
NMC Health (NMC) 2,393.00p -1.03%

FTSE 250 - Risers

Acacia Mining (ACA) 190.15p 4.31%
William Hill (WMH) 151.20p 4.13%
Centamin (DI) (CEY) 116.85p 4.10%
Plus500 Ltd (DI) (PLUS) 606.20p 4.02%
PPHE Hotel Group Ltd (PPH) 1,850.00p 3.93%
Hochschild Mining (HOC) 191.00p 2.63%
Ferrexpo (FXPO) 270.20p 2.35%
Dixons Carphone (DC.) 110.05p 2.28%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 112.20p 2.00%
Cairn Energy (CNE) 166.70p 1.96%

FTSE 250 - Fallers

Petrofac Ltd. (PFC) 407.60p -5.97%
Funding Circle Holdings (FCH) 223.50p -5.30%
Woodford Patient Capital Trust (WPCT) 55.70p -3.97%
Future (FUTR) 978.00p -3.93%
Drax Group (DRX) 265.20p -3.63%
Vivo Energy (VVO) 126.60p -3.36%
Stagecoach Group (SGC) 122.30p -2.86%
Entertainment One Limited (ETO) 385.80p -2.77%
Mitchells & Butlers (MAB) 280.00p -2.61%
Royal Mail (RMG) 201.00p -2.57%