London midday: Stocks fall as BoE QE programme hits a snag

The central bank on Tuesday said it bought £1.12bn of gilts on the second day of its new programme, falling short of its intention to purchase £1.17bn. Investors said the shortfall highlights the problems the BoE may run into going forward with its £60bn six-month programme.

“With the Bank of England struggling to pull off its latest QE plan, traders uninterested in parting ways with their long-dated gilts, the FTSE fell by around 15 points this morning, taking it back below 6840,” said Connor Campbell, financial analyst at Spreadex.

“The pound, meanwhile, continued to see a divergence between its performances against the dollar and the pound, rising half a percent against the former but slipping 0.1% against the latter.”

Separately, the Bank released a survey on Wednesday showing business services growth and consumer spending slowed in July following the UK’s vote to leave the European Union.

The BoE's monthly report from its network of agents said the easing in business services growth reflected weakness in commercial property investment and corporate transactions.

"Consumer spending growth had also slowed, although that appeared to have partly reflected the effects of unusually wet weather," it added.

Meanwhile, oil prices fell following an upward revision on the outlook for US crude production.

The US Energy Information Administration now expects output to average 8.73m barrels a day this year and 8.31m barrels a day next year, up from its previous forecast of 8.61m per day and 8.2m a day, respectively.

The EIA releases its weekly crude inventories report at 1530 BST.

Brent crude dropped 0.71% to $44.66 per barrel and West Texas Intermediate slid 1.06% to $42.33 per barrel at 1155 BST.

On the company front, Prudential shares gained after the company reported an increase in first half operating profit that beat analysts’ estimates, supported by growth in its Asia business.

Rolls-Royce got a boost on Wednesday as Morgan Stanley upgraded the stock to ‘equalweight’ from ‘underweight’ due to increased confidence on cash, and lifted the price target to 780p from 655p.

Security firm G4S surged after it posted a 44% increase in first half earnings and said it has made substantial progress with the ongoing transformation of the group.

Shares in Peppa Pig owner Entertainment One were sharply higher after the company said it has rejected a takeover offer by broadcaster ITV that valued it at 236p per share.

Land Securities nudged lower despite signing up three new long-term tenants for its 20 Eastbourne Terrace office building next to London's Paddington underground station.

William Hill was also under the cosh after it rejected a £3.2bn takeover bid from Rank and 888 late on Tuesday.

Housebuilders were in the red ahead of a housing market report from surveyors group RICS on Thursday. Berkeley Group, Taylor Wimpey and Persimmon slumped.

Market Movers

FTSE 100 (UKX) 6,835.82 -0.23%
FTSE 250 (MCX) 17,665.30 -0.12%
techMARK (TASX) 3,503.05 -0.50%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 788.50p 3.27%
Randgold Resources Ltd. (RRS) 8,665.00p 2.00%
Fresnillo (FRES) 1,990.00p 1.69%
Prudential (PRU) 1,412.00p 1.44%
Smiths Group (SMIN) 1,337.00p 1.13%
Legal & General Group (LGEN) 208.10p 1.02%
London Stock Exchange Group (LSE) 2,838.00p 0.67%
InterContinental Hotels Group (IHG) 3,303.00p 0.67%
Intertek Group (ITRK) 3,546.00p 0.60%
Worldpay Group (WI) (WPG) 310.80p 0.58%

FTSE 100 - Fallers

Standard Chartered (STAN) 656.10p -1.81%
Carnival (CCL) 3,528.00p -1.70%
International Consolidated Airlines Group SA (CDI) (IAG) 400.60p -1.62%
Berkeley Group Holdings (The) (BKG) 2,610.00p -1.51%
Taylor Wimpey (TW.) 152.30p -1.49%
Persimmon (PSN) 1,677.00p -1.47%
Schroders (SDR) 2,690.00p -1.36%
Smith & Nephew (SN.) 1,261.00p -1.33%
Pearson (PSON) 877.50p -1.29%
Hikma Pharmaceuticals (HIK) 2,271.00p -1.26%

FTSE 250 - Risers

G4S (GFS) 227.70p 16.41%
Entertainment One Limited (ETO) 234.60p 7.86%
Paysafe Group (PAYS) 420.10p 7.41%
B&M European Value Retail S.A. (DI) (BME) 272.70p 3.33%
Keller Group (KLR) 887.50p 2.96%
Aldermore Group (ALD) 150.60p 2.52%
Sophos Group (SOPH) 230.80p 1.99%
IP Group (IPO) 164.70p 1.98%
Centamin (DI) (CEY) 175.00p 1.98%
Ocado Group (OCDO) 300.70p 1.93%

FTSE 250 - Fallers

Regus (RGU) 304.10p -5.26%
NCC Group (NCC) 328.00p -4.87%
JRP Group (JRP) 95.35p -3.64%
Tullow Oil (TLW) 213.30p -3.13%
Amec Foster Wheeler (AMFW) 505.00p -3.07%
CYBG (CYBG) 258.50p -2.67%
Aggreko (AGK) 1,082.00p -2.61%
HICL Infrastructure Company Ltd (HICL) 177.30p -2.58%
Savills (SVS) 672.00p -2.54%
Thomas Cook Group (TCG) 60.20p -2.43%