(Alliance News) - London stocks continued to trade in the red at midday on Thursday, with ex-dividend stocks weighing down the FTSE 100 despite a sharp rise for NMC Health shares.
Focus lies on the Jackson Hole symposium of central bankers after Wednesday's US Federal Reserve minutes, which were less dovish than the market had been expecting.
The FTSE 100 was down 36.08 points, or 0.5%, at 7,167.89 Thursday midday. The FTSE 250 was down 45.68 points, or 0.2%, at 19,162.07 and the AIM All-Share was down 0.2% at 869.89.
The Cboe UK 100 index was down 0.4% at 12,149.09. The Cboe UK 250 was down 0.1% at 17,052.57 and the Cboe UK Small Companies was flat at 10,869.06.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.3% and flat respectively in afternoon trade.
"Markets remain in wait-and-see mode on Thursday, after the Fed minutes told us nothing we didn't already know despite briefly being responsible for the, now very well known, recession indicator flashing red for a second time," said Craig Erlam at Oanda.
Erlam continued: "Investors refuse to accept that more rate cuts aren't coming and have priced in at least two more this year, with one at each remaining meeting being a coin toss. If Powell disappoints on Friday, I will be shocked if the recession indicator doesn't flash red again, a punishment from the markets for the Fed not doing as its told."
The Jackson Hole symposium of central bankers kicks off on Thursday, with Fed Chair Powell due to speak on Friday.
Before his appearance, and keeping focus on central banks, the European Central Bank's minutes from July's meeting will be released at 1230 BST on Thursday.
On Wall Street, futures call for a mixed start with the Dow Jones seen down 0.25, the S&P down 0.3% and the Nasdaq down 0.4%.
To come in the economic calendar on Thursday, there is a Markit US PMI at 1445 BST.
Already released, the eurozone's composite PMI increased slightly as ongoing weakness in the manufacturing sector eased ever-so-slightly.
The flash eurozone composite PMI came in at 51.8 in August, up from 51.5 in July, hitting a two month high. The services PMI grew to 53.4 from 53.2 in July, while the manufacturing reading edged up to 47.0 from 46.5.
In European political news, Emmanuel Macron has fired a warning shot at Boris Johnson ahead of their meeting in Paris.
He has insisted the prime minister's demands to reopen the Brexit deal are "not an option" and suggested that the UK risks heading towards a future of being a vassal state to Donald Trump's US if it chooses to prioritise ties with Washington over a close relationship with the EU.
Johnson will meet Macron on Thursday for talks which are likely to be less encouraging than his meeting with Angela Merkel.
"Macron was also reportedly the last of the EU 27 leaders to agree on the extension to the Brexit deadline earlier this year and there’s a sense that he will take the hardest approach of all leaders from EU countries in negotiations," commented David Cheetham at XTB.
He continued: "The pound continues to tread water near its recent lows, with traders clearly awaiting further clarity on the likely outcome of Brexit before committing to any high conviction positions."
Sterling was quoted at USD1.2128 at midday, flat on USD1.2131 late Wednesday.
In London, the FTSE 100 remained in the red at midday despite a 26% surge in NMC Health shares.
This came after Reuters news agency reported that two groups of bidders were looking to snap up a sizeable minority stake in the FTSE 100-listed firm while, separately, NMC proposed a share buyback after reporting interim profit growth.
For the six months ended June, pretax profit widened 18% to USD140.6 million from USD118.7 million the year prior. This was after revenue rose 33% to USD1.24 billion from USD932.0 million the year before.
In a separate announcement, NMC announced its intention to seek shareholder approval for a share buyback programme worth up to USD200 million in order to "take advantage of exceptional price volatility" at the firm.
Earlier on Thursday, Reuters reported two groups were making competing offers to buy a 40% stake in NMC worth up to USD1.9 billion.
The newswire - citing four sources familiar with the situation - said the stake being targeted for acquisition is currently owned by Abu Dhabi-based KBBO Group as well as Khalifa Butti Bin Omeir and Saeed Bin Butti Al Qebaisi.
"Weak share prices across the UK stock market are providing plenty of opportunities for big investors to swoop on companies with depressed valuations...there will no doubt be more deals if sterling remains very weak as Brexit has effectively made it hunting season for foreign companies who see value in depressed UK assets," said Russ Mould, investment director at AJ Bell.
Weighing at the other end were ex-dividends, with Imperial Brands, Prudential and Reckitt Benckiser down 2.3%, 2.0% and 1.6% respectively.
In the FTSE 250, John Laing weighed after seeing a fall in interim profit.
John Laing, with shares down 8.1%, said pretax profit for the six months to the end of June declined to GBP35 million from GBP175 million a year earlier due to a sharp fall in operating income to GBP76 million from GBP213 million.
Net asset value stood at GBP1.60 billion, or 325 pence per share, as at June 30 versus GBP1.59 billion, or 323p, as at the end of December 2018.
"Our operational performance in the first half was strong, however we have had a number of challenges with our renewable energy assets in Australia and Europe. We delivered value enhancements across the portfolio, but predominantly in renewable energy, which has helped to mitigate the impact of these challenges," said Chief Executive Olivier Brousse.
GVC Holdings shares were up 5.0% after Chief Executive Kenneth Alexander purchased GBP5 million in shares, expressing his confidence in "strong" long-term returns.
Alexander acquired 833,334 shares in the FTSE 250-listed gambling company at a price of 588.17 pence each, totalling GBP4.9 million. Following this deal, which was completed on Wednesday, Alexander holds 2.5 million shares in GVC.
Elsewhere on the Main Market, South32 shares dipped 7.0% after the miner reported a lower interim profit on an impairment charge.
South32 is in "exclusive" negotiations with Seriti Resources Holdings over the energy coal business. Any deal would include a "modest" upfront cash payment and then a deferred payment in which both firms would share commodity price upside for a fixed period.
South32 has decided to make a USD504 million impairment on the energy coal operations, meaning pretax profit for the year to June has declined 48% to USD887 million.
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Prudential (PRU)
South32 (S32)
Imperial Brands (IMB)