London midday: Stocks maintain losses but Lloyds bucks the trend
London stocks were still in the red by midday on Thursday, while the pound pushed to a week's high as investors continued to digest Donald Trump's tax reform announcement amid a slew of corporate releases.
The FTSE 100 was down 0.6% to 7,246.36, while the pound was up 0.4% against the dollar to trade above $1.29 for the first time in a week and up 0.4% to €1.18.
In Europe, the main indices were also in red as investors awaited the latest policy announcement from the European Central Bank at 1245 BST and the press conference with Mario Draghi at 1330 BST.
As widely expected, Trump's announcement on Wednesday included plans to cut corporate tax to 15% from 35% and reduce the top individual tax rate to 35% from 39.6%.
Oanda analyst Craig Erlam said: "There has been a relatively muted response to Trump’s plans for tax reform that were announced on Wednesday, the prospect of which was one of the key drivers of the market rally that followed his election victory last November. With US equity markets near all-time highs and much of the details that were released already being known, it would appear everything was already priced in.
"While it was interesting to see the plans being laid out, there are still a number of obstacles to overcome before the changes come into effect, which may explain the muted response. Investors may have also got a little carried away with the plans previously and the implementation of them could take longer than people were expecting which is taking a little bit of the shine off."
Data boost
Elsewhere, the latest monthly Distributive Trades Survey form the Confederation of British Industry showed that retail sales grew at the fastest pace since September 2015 in the year to April.
The retail sales balance rose to +38 from +9 in March, beating analysts' expectations for a drop to +6.
Looking ahead, however, volume growth is expected to slow in the year to May and sales are set to be broadly average for the time of the year, with orders largely unchanged.
Meanwhile, the European Commission’s survey of business confidence showed a strengthening over the last month, but consumer confidence weakened, with both sides eyeing rising inflation.
The EC's economic sentiment index (ESI) for the UK inched up to 110.5 in April from 110.2 in March. The consumer confidence indicator, a seasonally adjusted version of the GfK index that is scheduled to be released on Friday, fell to -5.0 in April from -4.3 in March.
Raft of company results
In corporate news, AstraZeneca was on the back foot after it posted a drop in first-quarter sales, while WPP also declined after it said sales slowed in the first quarter due to major account losses.
Weir Group fell despite saying full-year profits are likely to be in line with current market expectations, as its stock went ex-dividend.
Engineer Meggitt was weaker as it said lower US demand for defence products had contributed to a small drop in first-quarter organic revenue growth.
Aerospace and defence group Cobham slipped despite saying that first-quarter trading was in line with the board's expectations, following a string of profit warnings.
Schroders lost ground even as the fund manager reported a 5% jump in assets under management and administration for the first quarter.
Howden Joinery was in the red after the company said first half profits would be hit by currency movements and extra operating costs as it reported a 3.9% rise in UK revenues for the 16 weeks to April 15.
Fidessa suffered sharp losses after it said increasing uncertainty in the market was causing some customers to take longer than usual to make decisions.
Lloyds Banking Group bucked the trend, rallying after it reported that profits doubled in the first three months of the year.
Healthcare provider Mediclinic International rocketed on news that Adu Dhabi has waived 20% of the co-payment for Thiqa health insurance card holders.
Housebuilder Persimmon was in the black after it said current forward sales revenue, including legal completions taken to date, was up 11% to £2. 56 bn, adding that it was confident on future prospects.
Meanwhile, Taylor Wimpey nudged a touch higher as it set aside £130m for a leasehold scandal.
Commercial laundry group Berendsen rose as it said first-quarter trading was in line with management expectations, and announced the retirement of its chief financial officer.
Prudential, St James's Place and Aviva were initiated at 'outperform' at Credit Suisse, while Legal & General was rated a new 'underperform'.
ITV, Rolls-Royce, Legal & General, Antofagasta, Relx, Fresnillo, Informa, Elementis, William Hill, National Express, Senior and UBM all retreated as their stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,246.36 -0.58%
FTSE 250 (MCX) 19,589.18 -0.46%
techMARK (TASX) 3,464.95 -0.71%
FTSE 100 - Risers
Mediclinic International (MDC) 857.00p 17.24%
Lloyds Banking Group (LLOY) 69.42p 2.98%
Royal Bank of Scotland Group (RBS) 257.00p 1.70%
Persimmon (PSN) 2,316.00p 1.31%
Kingfisher (KGF) 330.30p 1.07%
Next (NXT) 4,288.00p 1.06%
Tesco (TSCO) 182.10p 0.89%
Barratt Developments (BDEV) 586.00p 0.77%
London Stock Exchange Group (LSE) 3,373.00p 0.75%
Experian (EXPN) 1,664.00p 0.73%
FTSE 100 - Fallers
Legal & General Group (LGEN) 248.00p -5.02%
ITV (ITV) 211.10p -3.78%
Glencore (GLEN) 301.80p -2.46%
Rolls-Royce Holdings (RR.) 807.50p -2.24%
Relx plc (REL) 1,561.00p -2.19%
Informa (INF) 640.00p -2.14%
Fresnillo (FRES) 1,462.00p -2.08%
Ashtead Group (AHT) 1,633.00p -1.98%
Antofagasta (ANTO) 826.50p -1.84%
WPP (WPP) 1,692.00p -1.74%
FTSE 250 - Risers
Berendsen (BRSN) 860.50p 4.68%
Ibstock (IBST) 229.40p 4.04%
Spire Healthcare Group (SPI) 331.60p 3.11%
Acacia Mining (ACA) 399.60p 2.20%
NMC Health (NMC) 1,955.00p 2.20%
Kaz Minerals (KAZ) 489.40p 2.15%
Allied Minds (ALM) 160.50p 1.97%
St. Modwen Properties (SMP) 359.90p 1.55%
Hill & Smith Holdings (HILS) 1,322.00p 1.15%
Bellway (BWY) 2,856.00p 1.13%
FTSE 250 - Fallers
Fidessa Group (FDSA) 2,367.00p -9.35%
Vedanta Resources (VED) 685.00p -4.73%
Weir Group (WEIR) 1,987.00p -4.61%
William Hill (WMH) 292.00p -2.99%
Petrofac Ltd. (PFC) 830.00p -2.98%
Elementis (ELM) 307.90p -2.90%
Evraz (EVR) 208.70p -2.43%
Senior (SNR) 209.60p -2.38%
Entertainment One Limited (ETO) 242.60p -2.37%
National Express Group (NEX) 353.30p -2.30%