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(Alliance News) - London stock trading was muted at midday on Friday, with the FTSE 100 back above the 6,000 mark as stalled Brexit negotiations called the pound to give back recent gains.
In London, FTSE 100 index was flat at 6,010.83, recovering from a mid-morning low of 5,983.80. The large-cap index is on track to end the week down 2.6%.
The mid-cap FTSE 250 index was flat at 17,489.56, and the AIM All-Share index was down 0.2% at 955.47.
The Cboe UK 100 index was down 0.1% at 598.69. The Cboe 250 was flat at 14,891.78, and the Cboe Small Companies was down 0.3% at 9,592.53.
In mainland Europe, the CAC 40 index in Paris was up 0.3%, while the DAX 30 in Frankfurt was up 0.4%.
In the FTSE 100, GVC Holdings was the best performer, up 2.7% at 768.20 pence after Jefferies raised its price target on the gambling firm to 1,250 pence from 1,210p and reiterated its Buy rating.
At the other end of the large-cap index, gold miners Fresnillo and Polymetal International were down 2.7% and 1.2%, respectively, tracking spot gold prices lower.
The precious metal was quoted at USD1,931.14 an ounce Friday midday, down from USD1,946.90 late Thursday.
DCC was down 1.7% after Barclays downgraded the Irish support services firm to Equal Weight from Overweight.
In the FTSE 250, HgCapital Trust was up 6.8% after it said manager Hg led a further majority investment in Oslo-based software and technology provider Visma, valued at USD12.2 billion, in the world's largest-ever software buyout.
HgCapital Trust will be investing in Visma alongside other institutional clients of Hg through the Hg Saturn 2 fund, while Hg's Genesis 7 Fund will reduce its holding in Visma.
HgCapital Trust will be investing GBP17.1 million in Visma, bringing its existing investments in the company to GBP268.8 million. This will represent a 35% uplift of GBP69.1 million or 17 pence per share over the carrying value of GBP199.7 million in the net value asset of HgCapital Trust.
At the other end of the midcaps, Petrofac was the worst performer, down 5.8% after Bernstein downgraded the oilfield services company to Market Perform from Outperform.
The pound was quoted at USD1.3138 at midday on Friday, down from USD1.3160 at the London equities close Thursday, surrendering early gains that had pushed the UK current above USD1.32 after negative Brexit headlines from Brussels.
The UK accused the European Union of making post-Brexit negotiations "unnecessarily difficult" and warned "time is running short for both sides" as talks threatened to stall.
David Frost, UK Prime Minister Boris Johnson's chief negotiator, said he believes a trade deal is still possible but cautioned "there has been little progress" after seven rounds of talks.
His EU counterpart, Michel Barnier, said he was dismayed over the failure to make a breakthrough on the key area of fisheries where there has been "no progress whatsoever".
Frost blamed the EU position on state aid and fishing policy as being a key stumbling block. Meanwhile, Barnier told a press conference that law enforcement is an area "where we still struggle to agree on the necessary guarantees to protect citizens' fundamental rights and personal data".
Both parties have said any deal needs to be concluded by October in order to be ratified.
Earlier, sterling had appreciated to an intraday high of USD1.3256 after figures from the Office for National Statistics showed that UK retail sales rose in July as lockdown restrictions were relaxed.
UK retail sales were up 1.4% in July on an annual basis, having decreased 1.6% in June. Market consensus, according to FXStreet, was for zero annual growth.
Analysts at the Share Centre cautioned: "While this is good news for the retail sector and the wider economy, investors do need to bear in mind that footfall in the high street is still relatively low compared to pre-pandemic levels and many retailers are closing stores and laying off staff.
"Growth in the sector is still driven by online sales and services such as click and collect; these trends were symbolised recently with Marks & Spencer announcing 7,000 staffing cuts at the same time as its online grocery delivery service through Ocado is due to launch shortly. When the government’s furlough scheme comes to an end, many expect unemployment to increase which could have a knock-on impact on retail sales."
Meanwhile, business activity across the UK continued to gain traction in August, growing at its fastest pace since 2013, according to the latest figures from IHS Markit.
The UK services purchasing managers' index reading was 60.1 in August, up from 56.5 in July. The figure beat the consensus estimate, cited by FXStreet, of 57.0. This was the strongest rate of growth for six years, according to Markit.
The UK manufacturing PMI score was 55.3 in August, up from 53.3 in July. The print beat the consensus estimate of 53.8.
The UK composite output index registered 60.3 in August, up from 57.0 in July. The August print signalled the fastest rate of business activity expansion since October 2013.
The euro was changing hands at USD1.1817 at midday in London, down from USD1.1849 late Thursday, after data showed business activity growth across the eurozone slowed in August.
The flash Eurozone purchasing managers' composite output index declined to 51.6 in August, compared to July's final reading of 54.9 in July, mainly driven by a drop in the services sector and a dip in manufacturing.
The flash Eurozone services PMI activity index declined to 50.1 in August from 54.7 in July, while the flash Eurozone manufacturing PMI index was 51.7 compared with 51.8 the month before.
IHS Markit said its PMI reading signalled a slowdown in the pace of output growth, following the first expansion of activity in five months shown in July.
Service providers reported broadly unchanged levels of business activity from that seen in July, but manufacturing production rose sharply, with the rate of growth accelerating to the fastest rate since April 2018, IHS Markit added.
Against the yen, the dollar was trading at JPY105.60 in London, lower from JPY105.86.
Elsewhere in commodities, Brent oil was quoted at USD44.47 on Friday midday, lower from USD44.64 at Thursday's equities close in London.
New York is set to open flat on Friday rounding off a week that saw the S&P 500 and Nasdaq Composite indices setting fresh record highs.
The Dow Jones Industrial Average, S&P 500 and the Nasdaq Composite were all called flat, based on futures trading.
Pfizer shares will be in focus after the drugmaker late Thursday said that, following positive phase one trial data for its potential Covid-19 vaccine BNT162b2, it is on track for a regulatory review by October, which could lead to the global supply of up to 100 million doses by the end of 2020.
The New York-based drugmaker, in partnership with German company BioNTech, released key safety and immunogenicity data from the US phase one trial for the vaccine candidate, which at 30 micrograms demonstrated strong immunogencity in younger and older adults, seven days at after the second dose.
Pfizer said assuming critical success, it and BioNTech are on track to seek a regulatory review of the vaccine candidate as early as October, and should approval be obtained, plans to supply up to 100 million doses around the world by the end of 2020.
Pfizer shares were up 1.4% in pre-market trade in New York.
On the political front, Joe Biden formally accepted the nomination of the Democratic Party to become president of the US, in a resounding speech Thursday that sharply denounced President Donald Trump's handling of the coronavirus pandemic.
The mostly-forward looking address from the former vice president declared that "hope is more powerful than fear," and vowed to get a grip on the virus and the recession from the first day of a Biden presidency, including by enforcing a mask mandate.
The forceful address, given without a crowd because of the pandemic, and therefore lacking the normal cheers and applause, seemed also designed to lay to rest attacks on Biden from the Trump camp that the 77-year-old had become mentally feeble.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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