London midday: Stocks edge down as EU said to consider Russian coal ban
London stocks had edged into the red by midday on Tuesday as investors mulled the prospect of a potential EU ban on Russian coal imports and a reading on the UK services sector.
The FTSE 100 was down 0.2% at 7,545.67.
The latest headlines on the Ukraine conflict suggested the EU is planning to propose a mandatory phaseout on coal imports from Russia in a direct response to reports that Russian forces committed apparent war crimes in Ukraine.
According to Bloomberg, the action on coal would be added to a package of steps aimed at strengthening existing measures and correcting loopholes that was already set to be debated this week by EU ambassadors.
Sources said the details of the ban and the timing of the coal phaseout are still under discussion. It was also understood that the European Commission will propose banning most Russian trucks and ships from entering the bloc.
On home shores, the latest survey from S&P Global/CIPS showed that services activity surged in March as pandemic restrictions were removed but the war in Ukraine hit business confidence.
The headline services purchasing managers' index rose for the third month to 62.6 from 60.5 a month earlier. The rate of expansion was the strongest for 10 months and the second strongest since May 1997.
Orders rose strongly in March with travel, leisure and entertainment businesses reporting especially healthy demand as Covid-19 restrictions were lifted. Jobs were created at the fastest rate since October 2021, pushing up salaries.
The UK's dominant business sector expanded despite fast-rising prices for its services. Output charges rose at the fastest pace since the survey began in July 1996 and many respondents said they had not yet passed the full impact of higher operating costs on to customers.
The outlook was less buoyant as Russia's invasion of Ukraine and the resulting economic uncertainty sent optimism down for the second month running to its lowest since October 2020. Respondents also said the effect of rising inflation on household budgets put a break on growth expectations.
Tim Moore, economics director at S&P Global, said: "UK economic growth continued to surge higher in March after an Omicron-induced slowdown at the turn of the year. Service sector companies led the way as business activity expanded at the fastest pace since the post-lockdown recovery seen last May.
"However, the near-term growth outlook weakened as the war in Ukraine and global inflation concerns took a considerable toll on business sentiment."
In equity markets, home repairs service company Homeserve was up after it said it had traded in line with expectations during its fiscal year with steady policy retention rates in the UK and US.
Moonpig ticked higher as it upgraded its revenue outlook for the current financial year after sales were boosted by consumer behaviour during the Omicron strain of Covid-19.
On the downside, M&G was knocked lower by a downgrade to ‘underperform’ at Exane, while cybersecurity firm Darktrace slid as JPMorgan Cazenove initiated coverage of the shares at ‘underweight’, saying the path to sustainable profitable growth was unclear.
Moneysupermarket slumped after a downgrade to ‘equalweight’ from ‘overweight’ at Barclays, while Lloyds and Vodafone were weaker after downgrades at Barclays and Berenberg, respectively.
Market Movers
FTSE 100 (UKX) 7,545.67 -0.18%
FTSE 250 (MCX) 21,324.32 -0.03%
techMARK (TASX) 4,362.42 -0.19%
FTSE 100 - Risers
Croda International (CRDA) 8,032.00p 3.43%
London Stock Exchange Group (LSEG) 8,356.00p 2.65%
Hargreaves Lansdown (HL.) 1,044.00p 2.50%
Dechra Pharmaceuticals (DPH) 4,228.00p 2.13%
Spirax-Sarco Engineering (SPX) 12,940.00p 1.73%
Royal Mail (RMG) 336.80p 1.51%
Auto Trader Group (AUTO) 659.40p 1.45%
Fresnillo (FRES) 765.20p 1.30%
Halma (HLMA) 2,576.00p 1.22%
Smith (DS) (SMDS) 324.50p 1.18%
FTSE 100 - Fallers
Kingfisher (KGF) 252.00p -3.15%
Melrose Industries (MRO) 123.20p -3.14%
Barratt Developments (BDEV) 517.60p -3.00%
Airtel Africa (AAF) 140.00p -2.78%
Rolls-Royce Holdings (RR.) 98.01p -2.34%
Smiths Group (SMIN) 1,398.50p -2.31%
Howden Joinery Group (HWDN) 772.80p -2.28%
Lloyds Banking Group (LLOY) 45.88p -2.14%
Taylor Wimpey (TW.) 132.10p -2.00%
Ashtead Group (AHT) 4,742.00p -1.84%
FTSE 250 - Risers
Trustpilot Group (TRST) 155.00p 8.01%
Baltic Classifieds Group (BCG) 157.20p 7.23%
Syncona Limited NPV (SYNC) 169.40p 6.27%
Carnival (CCL) 1,402.50p 4.55%
IP Group (IPO) 92.80p 3.40%
Diversified Energy Company (DEC) 121.50p 2.97%
Urban Logistics Reit (SHED) 197.00p 2.87%
SSP Group (SSPG) 231.00p 2.71%
Elementis (ELM) 121.80p 2.53%
Trainline (TRN) 279.80p 2.49%
FTSE 250 - Fallers
Darktrace (DARK) 423.90p -6.01%
Moneysupermarket.com Group (MONY) 180.60p -4.49%
Ferrexpo (FXPO) 180.60p -3.83%
Countryside Partnerships (CSP) 271.00p -2.80%
TI Fluid Systems (TIFS) 190.40p -2.76%
Mitie Group (MTO) 54.30p -2.69%
Polymetal International (POLY) 339.90p -2.33%
Hill & Smith Holdings (HILS) 1,492.00p -2.23%
RHI Magnesita N.V. (DI) (RHIM) 2,398.00p -2.12%
Computacenter (CCC) 2,902.00p -2.03%