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London midday: Stocks turn higher as Barclays gains; ECB presser eyed
(WebFG News) - London stocks had shaken off small early losses to trade a little higher by midday on Thursday as Barclays turned up, with traders preparing for the latest policy announcement from the European Central Bank and ensuing press conference.
The FTSE 100 was up 0.2% to 7,393.87, while the pound was flat versus the euro at 1.1458 and up 0.2% against the greenback at 1.3955.
Figures released earlier showed that UK households spent less on credit cards and mortgages for property purchases slumped in March, suggesting increased consumer caution as well as a hit from the Beast from the East.
Credit card spending fell 1.2% in March from a year earlier to £9.7bn and repayments outstripped new lending in the first quarter, figures from UK Finance showed. Spending may have been affected by the Siberian weather system - labelled the 'Beast from the East' - that froze Britain and caused a slump in retail sales that month.
Gross mortgage lending fell 2.3% to £20.5bn as the number of approvals for house purchases dropped 21% to 38,710. Remortgage approvals fell 6.4% to 27,057.
Households increased their deposits at banks and building societies by 1.8% to £846.9bn. At high street banks, deposits rose 4.8% to £639.4bn. Overdraft repayments also increased.
The figures suggest households may be exercising caution as the economy slows and amid speculation about when the Bank of England will approve a further increase to interest rates. Transactions in the housing market have fallen sharply, especially in London, as buyers grow wary of paying high prices.
Elsewhere, the latest quarterly distributive trades survey from the Confederation of British Industry showed retail sales growth in the UK missed expectations in April.
The retail sales volume balance increased to -2 from the five-month low of -8 in May, falling shoprt of expectations for a balance of +5. The survey found that most retailers expect volumes to increase next Month, with 33% seeing and 8% forecasting a decline, giving a balance of +25.
Anna Leach, CBI head of Economic Intelligence, said: "It's no secret that UK high streets have endured tough trading conditions in recent months, with some big names closing or cutting back. Much of this reflects ongoing structural changes in the sector as well as the continued squeeze on households' real incomes. While conditions have improved for households recently - with real wage growth inching into positive territory - we expect further gains in living standards to remain modest. So the pressure looks set to stay on retailers for the time being."
Still to come, the ECB rate decision is at 1245 BST, and with no change to policy expected, investors will be eyeing comments from chief Mario Draghi during the press conference at 1330 BST.
Chris Beauchamp, chief market analyst at IG, said: "All eyes now turn to the ECB and its latest meeting. What we will see today will not be a 'can kicking' in terms of lengthening the timetable for QE, but rather a gentle push of the can slightly further away. The heady days of 'Euroboom' might be past, but things aren't exactly turning sour in the eurozone, just getting a little steadier. This gives Mr Draghi ample opportunity to emphasise the slow but steady progress made towards tightening, without giving hints towards anything as shocking as actually raising rates in the near future."
In corporate news, Barclays reversed earlier losses to trade up after it reported revenue down 8% to £5.36bn and a loss due to litigation and conduct items, but said it intended to return more capital to shareholders. Underlying profit crept up 1% in the first quarter, if excluding litigation and conduct items, to £1.73bn.
Centrica racked up healthy gains as it emerged that the merger of rivals SSE and Npower could be up for further scrutiny after the Competition and Markets Authority's initial Phase 1 investigation found that the rivalry between the large energy companies was an "important factor" in how they set tariffs.
Oil giant BP pushed up as it appointed former BG Group and Statoil boss Helge Lund as its new chairman, succeeding Carl-Henric Svanberg, with effect from 1 January 2019.
Asset manager Schroders was in the black despite saying that asset under management and administration slipped in the first quarter, while Domino's Pizza advanced after serving up an 18% rise in first-quarter sales.
Drax was the top gainer on the FTSE 250 on the back of an upgrade to 'buy' from 'neutral' at Bank of America Merrill Lynch.
On the downside, Royal Dutch Shell leaked lower as it reported a strong rise in first-quarter income thanks to higher oil and gas prices, and growth from its gas and upstream businesses but said less favourable refining market conditions and lower contributions from trading impacted the earnings of the downstream business.
Taylor Wimpey was in the red after saying demand for new housing has continued to be good through early 2018 and that it remains on track to meet its expectations for the year, but reporting a drop in the sales rate and order book.
Insurer Hastings Group slumped even as it reported a jump in written premiums as its live customer policies and market share grew, with analysts pointing out that the first-quarter performance shows a slowdown in the growth trajectory for the year.
Antofagasta, Legal & General, Fresnillo, Glencore, Relx, Rolls-Royce, William Hill, Man Group, Weir, Petrofac, IWG, National Express, Spirax-Sarco Engineering and International Public Partnerships were among the companies whose stock went ex-dividend.
Market Movers
FTSE 100 (UKX) 7,393.87 0.20%
FTSE 250 (MCX) 20,076.99 0.29%
techMARK (TASX) 3,403.21 0.54%
FTSE 100 - Risers
Imperial Brands (IMB) 2,544.50p 2.93%
United Utilities Group (UU.) 735.08p 2.84%
Severn Trent (SVT) 1,910.50p 2.19%
Centrica (CNA) 150.40p 2.17%
WPP (WPP) 1,140.00p 2.10%
Old Mutual (OML) 253.40p 2.10%
ITV (ITV) 147.55p 1.86%
Barclays (BARC) 216.95p 1.85%
Ashtead Group (AHT) 2,044.00p 1.69%
Smith & Nephew (SN.) 1,388.00p 1.68%
FTSE 100 - Fallers
Legal & General Group (LGEN) 266.94p -4.12%
Antofagasta (ANTO) 933.00p -2.81%
Fresnillo (FRES) 1,242.00p -2.74%
Royal Dutch Shell 'A' (RDSA) 2,473.00p -2.19%
Taylor Wimpey (TW.) 188.65p -2.18%
Royal Dutch Shell 'B' (RDSB) 2,535.50p -2.03%
Glencore (GLEN) 369.80p -1.96%
Direct Line Insurance Group (DLG) 368.42p -1.68%
Persimmon (PSN) 2,652.00p -1.56%
Admiral Group (ADM) 1,979.50p -1.12%
FTSE 250 - Risers
Drax Group (DRX) 323.00p 9.71%
Hikma Pharmaceuticals (HIK) 1,259.50p 3.36%
Domino's Pizza Group (DOM) 354.80p 2.57%
CLS Holdings (CLI) 241.00p 2.55%
Woodford Patient Capital Trust (WPCT) 77.19p 2.52%
Investec (INVP) 574.60p 2.39%
Elementis (ELM) 288.80p 2.27%
Rank Group (RNK) 173.80p 2.24%
Wood Group (John) (WG.) 559.40p 2.23%
Pennon Group (PNN) 681.00p 2.16%
FTSE 250 - Fallers
Hastings Group Holdings (HSTG) 266.10p -4.69%
International Public Partnerships Ltd. (INPP) 143.60p -2.45%
National Express Group (NEX) 394.60p -2.33%
Polypipe Group (PLP) 372.80p -2.25%
Lancashire Holdings Limited (LRE) 590.00p -2.16%
Alfa Financial Software Holdings (ALFA) 344.50p -2.13%
Vietnam Enterprise Investments (DI) (VEIL) 453.60p -2.03%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 330.78p -1.85%
Cobham (COB) 113.30p -1.82%
Travis Perkins (TPK) 1,269.00p -1.78%