London midday: Stocks in the black as sterling rallies on Brexit hopes – ShareCast

London stocks were still firmly in the black by midday on Monday, boosted by encouraging Chinese data and strong performances from the likes of HSBC and Diageo, while the pound was lifted by Brexit hopes.

The FTSE 100 was up 1.5% at 5,929.82, while sterling was 1.3% higher against the dollar at 1.2909 ahead of the resumption of Brexit talks.

IG analyst Joshua Mahony said: “Brexit talks are back on the agenda, with Michael Gove heading to Brussels for talks ahead of tomorrow’s final scheduled round of negotiations.

“The sterling rise seen this morning serves to highlight the hopes that we could see some form of breakthrough as we enter the final straight, with rumours of concessions on both sides serving to highlight the possibility we have turned a corner.

“The hope is that Barnier and Frost will be able to progress talks enough to enter a two-week ‘tunnel’ in a bid to thrash out a deal by the 15 October deadline cited by Johnson. As things stand, markets have become accustomed to the idea that talks could fail, leaving the potential for significant sterling gains if Johnson manages to emerge with a positive deal from these late talks.”

Figures released earlier showed that industrial profits in China rose 19.1% on the year in August. Although this was down from 19.6 growth in July, it marked the fourth month in a row of profit growth as factories continued to recover from the Covid-19 shutdown.

Despite the positive tone, worries about the coronavirus crisis and further restrictions remained on investors’ minds, particularly after weekend reports the government is considering banning all socialising indoors and closing all pubs and restaurants in Northern England and London amid a rise in cases.

In corporate news, HSBC surged after its biggest shareholder, China’s Ping An Asset Management, lifted its stake in the bank. Other banks followed suit, with Standard Chartered, Barclays and Lloyds all higher.

Diageo rallied after saying it made a good start to the current financial year as the drinks company’s US business beat expectations. The maker of Johnny Walker whisky and Guinness beer said its outlook had improved since the end of June. Sales improved compared to the second half of last year but sales and margins will be lower than in the first half of last year.

Great Portland Estates was a high riser after private equity firm KKR bought a 5.35% stake in property company for around £74m. Peers Land Securities, British Land and Shaftesbury all gained.

William Hill was weaker after it and Caesars Entertainment confirmed they were in advanced talks on a £2.9bn cash offer for the UK bookmaker. The shares had already risen sharply on Friday on news of a deal.

Market Movers

FTSE 100 (UKX) 5,929.82 1.49%FTSE 250 (MCX) 17,379.45 1.97%techMARK (TASX) 3,771.71 0.71%

FTSE 100 – Risers

HSBC Holdings (HSBA) 309.20p 9.12%Land Securities Group (LAND) 531.90p 8.46%Diageo (DGE) 2,711.00p 7.52%British Land Company (BLND) 344.90p 7.11%Standard Chartered (STAN) 355.20p 5.46%Lloyds Banking Group (LLOY) 26.03p 5.32%Standard Life Aberdeen (SLA) 219.80p 5.22%NATWEST GROUP PLC ORD 100P (NWG) 104.80p 5.20%Legal & General Group (LGEN) 186.95p 5.03%Barclays (BARC) 95.93p 4.78%

FTSE 100 – Fallers

Rolls-Royce Holdings (RR.) 148.45p -4.07%Fresnillo (FRES) 1,169.50p -1.35%GVC Holdings (GVC) 986.40p -1.20%Rio Tinto (RIO) 4,684.00p -1.04%Polymetal International (POLY) 1,661.50p -0.95%Admiral Group (ADM) 2,673.00p -0.56%Royal Dutch Shell ‘A’ (RDSA) 999.70p -0.51%Kingfisher (KGF) 294.40p -0.51%GlaxoSmithKline (GSK) 1,468.40p -0.41%Flutter Entertainment (FLTR) 12,630.00p -0.39%

FTSE 250 – Risers

Great Portland Estates (GPOR) 619.60p 12.17%Carnival (CCL) 1,005.50p 9.46%Petrofac Ltd. (PFC) 114.85p 7.84%Shaftesbury (SHB) 514.00p 7.71%Cairn Energy (CNE) 152.60p 7.69%Crest Nicholson Holdings (CRST) 192.60p 7.36%Paragon Banking Group (PAG) 324.00p 6.79%Close Brothers Group (CBG) 1,010.00p 6.71%Trainline (TRN) 378.80p 6.70%Rank Group (RNK) 97.10p 6.24%

FTSE 250 – Fallers

William Hill (WMH) 278.20p -10.89%Indivior (INDV) 116.90p -4.18%Network International Holdings (NETW) 282.40p -2.62%Pets at Home Group (PETS) 389.20p -1.32%Convatec Group (CTEC) 176.90p -1.01%UDG Healthcare Public Limited Company (UDG) 760.00p -0.98%Hochschild Mining (HOC) 212.00p -0.75%Genus (GNS) 3,866.00p -0.72%BlackRock World Mining Trust (BRWM) 394.50p -0.63%Watches of Switzerland Group (WOSG) 318.00p -0.63%