LONDON MARKET MIDDAY: Stocks Down As Pound Rises On Brexit Deal Hopes

LONDON (Alliance News) - Stocks in London were lower at midday on Thursday, with the FTSE 100 dented by a resurgent pound, which appreciated amid hopes a deal over Brexit can be reached between the UK and EU.The FTSE 100 index was down 0.7%, or 48.86 points at 7,514.35. The FTSE 250 was down 0.1%, or 36.83 points, at 20,700.05, and the AIM All-Share was up 0.1%, or 0.80 points, at 1,100.18.The Cboe UK 100 was down 0.8% at 12,722.91, the Cboe UK 250 was down 0.3% at 18,752.41, and the Cboe UK Small Companies was down 0.5% at 12,300.79."The UK focus has become almost entirely consumed by affairs closer to home, with optimism at an improved EU-UK negotiation stance helping push the pound higher and FTSE lower," said IG market analyst Joshua Mahony.The pound was higher quoted at USD1.3017 at midday, compared to USD1.2999 at the London equities close Wednesday. France signalled it is ready to cut a close post-Brexit EU deal with the UK, according to press reports. French President Emmanuel Macron aims to use an EU summit next month in Salzburg, Austria, to push for a new "alliance" between the bloc and Britain, The Times stated. A new Continental structure would see "concentric circles" with the EU and Euro at its core and the UK in a second ring, according to the newspaper. The report emerged after the EU's chief negotiator Michel Barnier struck an optimistic tone on Wednesday, stating: "We are prepared to offer Britain a partnership such as there never has been with any other third country." Furthermore, Brexit Secretary Dominic Raab on Wednesday said he was "confident that a deal is within our sights" while appearing before peers to discuss progress of the government's negotiations to leave the EU."The latest comments suggest there is a strong desire within the EU to find a solution and avoid a no deal Brexit which is understandably good for the UK and the pound. Sterling had come under pressure in recent months as the prospect of no deal became more of a possibility but this is hopefully the first step towards it not becoming a reality. We've seen a small relief rally but we'll need to see many more positive steps before traders get carried away," said Oanda senior market analyst Craig Erlam.In domestic economic news, UK mortgage approvals decreased by more than expected in July, figures from the Bank of England revealed. The number of loans approved in July fell to 64,768 from 65,374 in June. Approvals were forecast to fall more moderately to 65,000. Secured lending rose by GBP3.20 billion after rising GBP3.90 billion a month ago. Consumer credit rose by only GBP0.80 billion compared to June's GBP1.50 billion increase.On the London Stock Exchange, SSE was up 0.1% after the UK Competition & Markets Authority found no competition concerns related to the proposed merger between SSE's retail arm and Npower Group. German energy company Innogy owns Npower.SSE said it was pleased with the watchdog's findings. SSE Chief Executive Officer Alistair Phillips-Davies added: "The scale and pace of change in the GB energy market continues to be significant and requires us to evolve to stay relevant, competitive and sustainable. "The planned transaction presents a great opportunity to create a more agile, innovative and efficient company that really delivers for customers and the energy market as a whole." SSE said it will continue to engage with the CMA as it prepares its final report which is due in October. The proposed merger leaves the 'Big Six' energy companies in the UK on track to become five. At the other end of the large cap index, Vodafone Group was down 2.5% after Merrill Lynch downgraded the telecommunications stock to Neutral from Buy. Vodafone announced Thursday a AUD15 billion merger between its joint venture Vodafone Hutchinson Australia and internet service provider TPG Telecom. The deal is expected to be completed next year and is subject to approval from regulators, including the Australian watchdog.Mining stocks were down following a decline in copper prices with Rio Tinto down 1.5%, BHP Billiton down 1.4%, Glencore down 1.5% and Anglo American down 1.3%. In the FTSE 250, Hunting was up 12% after the oilfield services company reinstated dividend payments as it reported a swing to profit in the first half of the year as a result of improved drilling activity in the US. Hunting swung to a pretax profit from operations of USD38.0 million in the first half of 2018, from a loss of USD25.5 million the year before. Revenue grew by 39% to USD442.8 million from USD318.1 million, with a strong performance from its Hunting Titan business in the US. Hunting declared a per share interim dividend of 4.0 cents, having made no interim payout in 2017. "Given the interim financial results reported today and the more stable outlook, the board is pleased to be re-instating dividend distributions to shareholders," said Hunting Chief Executive Jim Johnson.At the other end of the midcap index, Hays was the worst performer down 4.5% after the recruiter expressed uncertainty for its UK market due to economic instability, despite reporting positive results for its recently ended financial year. Hays posted pretax profit of GBP238.5 million, up from GBP204.6 million a year ago. The sharp profit hike was on the back of a "record" net fees increase of 12% to GBP1.07 billion from GBP954.6 million, as turnover rose 13% to GBP5.75 billion from GBP5.08 billion a year ago. Hays declared an 18% increase in its final dividend to 3.81 pence per share from 3.22p. In Paris the CAC 40 was down 0.4%, while the DAX 30 in Frankfurt was down 1.0%. The euro was flat at USD1.1696 at midday against USD1.1692 at the European equities close Wednesday. In economic news from the continent, Germany's unemployment decreased in August, the Federal Labor Agency reportedly said. The number of unemployed fell by 8,000 from the previous month, in line with expectations. The jobless rate remained stable at 5.2% in August, as expected. This was the lowest since German reunification in 1990.Ahead, Germany inflation readings are released at 1300 BST. Stocks in New York were set for a lower open after US President Donald Trump voiced optimism that a trade deal with Canada can be reached before his self-imposed Friday deadline, as representatives of the two countries were meeting in Washington for marathon talks. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all were pointed down 0.2%."I think Canada very much wants to make a deal," Trump said on Wednesday at the White House, adding that they were "on track" for sealing it this week. He left open the option of no deal with Canada but added that it would be good for the northern neighbour to reach an agreement. He said talks so far were going "really well".However, while Canadian Prime Minister Justin Trudeau said there is a "possibility" of a trade deal being reached with the US this week, he also said that no deal is better than agreeing to a bad deal, broadcaster CBC reported. The US reached a deal with Mexico this week, and now Washington is pressuring the last member of NAFTA to sign on to the agreement or face tariffs on cars.Still to come, the latest core Personal Consumption Expenditure report - which is the Federal Reserve's preferred gauge of inflation - will be released at 1330 BST.