11th Oct 2016 10:59
LONDON (Alliance News) - The weak pound was keeping large-cap stocks in positive territory at midday Tuesday, while mid-caps were outperforming due to some well-received UK company updates.
The FTSE 100 index was up 0.2%, or 16.72 points, at 7,114.22, the FTSE 250 index was up 0.5% at 18,070.21, and the AIM All-Share was up 0.1% at 826.71.
The BATS UK 100 index was 0.3% at 12,033.13, and the BATS 250 was 0.5% higher at 16,441.92, while the BATS Small Companies index was down 0.1% at 11,211.67.
The pound extended its losing streak against its major counterparts after a media report showed that the British government could lose as much as GBP66 billion per year in tax revenue and see UK gross domestic product slashed by up to 9.5% in the case of a 'hard Brexit'.
Leaving the single market without a deal and switching to World Trade Organisation rules would lower the GDP by 9.5%, a leaked Treasury document published by the Times showed.
"The Treasury estimates that UK GDP would be between 5.4% and 9.5% of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5%," the newspaper said.
"The net impact on public sector receipts - assuming no contributions to the EU and current receipts from the EU are replicated in full - would be a loss of between GBP38 billion and GBP66 billion per year after 15 years, driven by the smaller size of the economy," the Treasury warned.
At midday, the pound was quoted at USD1.2266 versus USD1.2386 at the London stock market close on Monday.
In European stock markets, the CAC 40 index in Paris was up 0.2% and the DAX 30 in Frankfurt was up 0.2%.
Futures indicated a lower open for Wall Street, with the DJIA and S&P 500 indices pointed down 0.2% and the Nasdaq 100 down 0.1%. US earnings season is due to kick-off with traditional curtain-raiser aluminium producer Alcoa.
In UK corporate news, there are a number of strong gainers in the FTSE 250 index, led by retailer N Brown Group, which traded up 16%.
The online and catalogue clothing seller reported a fall in profit in the first half of its financial year due to exceptional costs, but revenue rose as it increased online sales. N Brown will pay an interim dividend of 5.98 pence, which is flat year-on-year.
N+1 Singer was pleased with the interim results, with the broker saying that business for the N Brown at the start of the third-quarter was "reassuring".
Fellow fashion retailer Ted Baker reported growth in profit in the first half of its financial year, as sales grew strongly across the business, and it said it has seen a good response to its autumn/winter lines in the second half so far. The stock was up 5.3%.
Victrex was up 7.3% after the polymer products company said trading improved in the second half of its financial year, as it had hoped, leaving the group in line for the year that ended in September.
Victrex, which makes pipes, films and coatings, said its Aerospace and Automotive divisions both performed well, while its Oil & Gas unit saw conditions stabilise following a difficult recent period in its end markets. Consumer Electronics sales surged higher in the fourth quarter, Victrex said, with volumes in the second half more than double those in the first.
Retirement housebuilder McCarthy & Stone, up 7.2%, said trading and other lead indicators have improved since the year ended August 31, and were ahead for the first five weeks of its financial year when compared with the same period a year earlier.
Among blue chips, Old Mutual was the biggest faller, down 3.8%, following a drop in the value of the rand after South African Finance Minister Pravin Gordhan said he had been summoned to appear in court and prosecutors said he would be charged over allegations of fraud during his time running the country's tax authority.
Old Mutual on Tuesday also provided details on the separation of its four constituent businesses, which will see its wealth management and emerging markets businesses spun-off into independent listed companies with its other operations set to be wound down or distributed to shareholders.
Other South African companies also were amongst the heaviest blue-chip fallers. Private healthcare company Mediclinic International was down 2.0% and packaging company Mondi was down 0.7%.
Nanoco Group was the biggest faller in the FTSE All-Share index, down 9.3%. The cadmium-free quantum dots maker said it made a pretax loss of GBP12.6 million in the year to the end of July, widened from a GBP10.9 million loss the prior year.
However, Nanoco has signed licensing deals with Taiwanese optical films manufacturer Wah Hong Industrial and German science and technology group Merck in recent months. It also has a licensing deal in place with US chemicals giant Dow Chemical Co, under which Nanoco is supplying its technology to help develop Dow's TREVISTA cadmium-free quantum dots that are manufactured in Cheonan, South Korea.
Still ahead in the economic calendar, the US Redbook index is at 1355 BST, while US labor market conditions data are at 1500 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2016 Alliance News Limited. All Rights Reserved.
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