London midday: Stocks down but off lows as miners continue to weigh

The FTSE 100 was off 0.1% at 7,319.07, while the pound was down 0.3% against the dollar and the euro at 1.3228 and 1.1653, respectively, with inflation data doing little to move markets as the focus remained firmly on Brexit, with Prime Minister Theresa May set to write to European Union chiefs to request a short extension to Article 50.

An extension until 30 June is expected, as that is the last day Britain could remain in the EU without taking part in the European elections. May is off to Brussels later in the day to discuss the matter, as any delay will need to be approved by the 27 EU member states.

Spreadex analyst Connor Campbell said: "Still perturbed by reports that the government - and now Labour - are backing a three-month extension to Article 50, i.e. punting the cliff edge to the end of June rather than asking the EU for something a lot longer, the pound couldn’t shake its losses."

"This despite a better than forecast CPI reading for February, the number coming in at 1.9% against the 1.8% estimated."

Figures released earlier by the Office for National Statistics showed the consumer price index including housing costs was 1.8% in February, unchanged from the previous month. Stripping out volatile housing costs, the 12-month rate was 1.9%, up from 1.8% the month before and beating expectations for an unchanged reading.

Mike Hardie, head of inflation at the ONS, said: "The rate of inflation is stable, with a modest rise in food as well as alcohol and tobacco offset by clothing and footwear prices rising by less than they did a year ago."

Tom Stevenson, investment director for personal investing at Fidelity International, said: “The Bank of England can sit on its hands again this week, safe in the knowledge that inflation remains under its 2% target."

More broadly, sentiment was dented following a report from Bloomberg overnight that China was pushing back against key US demands in the trade talks ahead of the next round of negotiations in Beijing next week.

Bloomberg cited people familiar with the negotiations as saying that Chinese officials have shifted their stance because after agreeing to their intellectual property policies, they haven't had any assurances from the Trump administration that tariffs on their imports would be lifted.

Market participants will also be keeping an eye out for the Fed rate announcement, which is due after the London close at 1800 GMT.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said that amid expectations for interest rates to be unchanged, investors want to know if the central bank will offer more guidance on the US monetary policy outlook for the remainder of the year.

"Markets will be keen to find out the latest readings on the Fed dot-plot, and whether they may justify the emergence of recent speculation that the Federal Reserve will consider cutting US interest rates down the road.

"I would be very surprised if this materialised, and expect the tone of the Federal Reserve once again to acknowledge that global economic conditions are weakening and that the US central bank is aware of the potential risks external headwinds are presenting to the global economy. This is the same narrative that has been provided by a wide range of different officials throughout the developed and emerging markets in the past couple of months."

In equity markets, miners were under the cosh amid worries about the US-China trade war and weaker copper and iron ore prices, with Rio, Antofagasta, Glencore and BHP all down. Antofagasta was also hit by a downgrade to 'reduce' at HSBC.

Construction, services and property group Kier saw its shares tumble after saying it swung to a first-half loss of £35.5m from a profit of £34.3m the year before....

B&Q owner Kingfisher reversed earlier gains as it held its full-year dividend steady at 10.8p a share, after saying that profits fell less than expected last year as it completed the third year of its five-year turnaround plan. It also said the search for a new chief executive to take over from Véronique Laury has begun but a departure date has not yet been decided.

Russ Mould, investment director at AJ Bell, said Kingfisher's failure to increase its dividend for a tenth year in a row is the subtlest indication that its turnaround plan is not delivering.

"The decision to change not just its head of IT and also its chief executive is more of a giveaway, as is a change in how the company will measure the success of the ONE Kingfisher project’s results," he added.

On the upside, Inmarsat shares surged after the satellite communications group confirmed that it was in talks with a consortium of private equity companies after receiving a takeover proposal in January. The proposal from Apax Partners, Warburg Pincus International, and Canada Pension Plan Investment Board was about a possible cash offer of $7.21 per Inmarsat share, assuming no further dividends would be paid by Inmarsat following the date of the proposal.

TI Fluid Systems rose as it hiked its dividend and posted a jump in full-year profit, while travel operator TUI was on the front foot after an upgrade to 'buy' at Oddo.

Market Movers

FTSE 100 (UKX) 7,319.07 -0.07%
FTSE 250 (MCX) 19,528.49 -0.12%
techMARK (TASX) 3,583.17 0.39%

FTSE 100 - Risers

Rightmove (RMV) 517.00p 2.31%
Just Eat (JE.) 762.00p 2.15%
Micro Focus International (MCRO) 1,940.00p 2.02%
DCC (DCC) 6,685.00p 1.83%
Smurfit Kappa Group (SKG) 2,322.00p 1.49%
Auto Trader Group (AUTO) 513.00p 1.42%
Sage Group (SGE) 692.00p 1.11%
Diageo (DGE) 3,095.00p 1.11%
Vodafone Group (VOD) 147.18p 1.10%
Phoenix Group Holdings (PHNX) 708.70p 1.06%

FTSE 100 - Fallers

Rio Tinto (RIO) 4,170.50p -3.17%
Kingfisher (KGF) 238.60p -3.02%
BHP Group (BHP) 1,750.00p -1.73%
Anglo American (AAL) 1,978.80p -1.35%
Antofagasta (ANTO) 952.20p -1.35%
London Stock Exchange Group (LSE) 4,741.00p -1.29%
NMC Health (NMC) 2,656.00p -1.26%
Ferguson (FERG) 5,325.00p -1.21%
Melrose Industries (MRO) 188.55p -1.21%
International Consolidated Airlines Group SA (CDI) (IAG) 544.45p -1.19%

FTSE 250 - Risers

Inmarsat (ISAT) 513.80p 17.45%
TI Fluid Systems (TIFS) 185.02p 7.40%
Syncona Limited NPV (SYNC) 251.00p 3.94%
Premier Oil (PMO) 93.15p 3.28%
Wood Group (John) (WG.) 566.13p 2.95%
Capita (CPI) 127.90p 1.55%
Moneysupermarket.com Group (MONY) 363.90p 1.46%
Petrofac Ltd. (PFC) 494.30p 1.46%
Lancashire Holdings Limited (LRE) 662.00p 1.46%
Savills (SVS) 931.50p 1.36%

FTSE 250 - Fallers

Kier Group (KIE) 443.46p -7.90%
Just Group (JUST) 73.50p -5.77%
Funding Circle Holdings (FCH) 394.88p -3.69%
Investec (INVP) 460.20p -3.25%
Ferrexpo (FXPO) 254.26p -2.79%
Quilter (QLT) 144.44p -2.61%
Clarkson (CKN) 2,510.00p -2.52%
Cairn Energy (CNE) 169.80p -2.42%
IG Group Holdings (IGG) 564.00p -2.34%
Bakkavor Group (BAKK) 122.20p -2.24%