London midday: Stocks edge higher in quiet trade

The FTSE 100 was up 0.2% at 7,543.06.

Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV), said: “Just when the battle to tame inflation appears to be working, a fresh skirmish in the trade war between the US and China, threatens to snarl up supply chains, potentially pushing up prices.

“China’s move to restrict exports of some rare earth metals, used in highly sought-after products such as semi-conductors, appears to be a tit-for-tat move, in response to US curbs on the sales of chips which are in high demand for AI capabilities.

“Coming just days before Janet Yellen, the US Treasury Secretary is due to visit Beijing, the policy is likely to have been designed to put pressure on the US to release its current export bans and drop further curbs which are expected.”

Russ Mould, investment director at AJ Bell, said there appeared to be some relief in markets that the Reserve Bank of Australia chose to stand pat on interest rates earlier.

“It is holding fire as it waits to see the impact of its previous hikes. Playing the waiting game has logic for monetary policy makers given the typical lag between increasing rates and seeing the full impact on the economy,” he said.

In equity markets, supermarket chain Sainsbury’s was in the red as it reported an 11% rise in grocery sales in the four months to June 24 and maintained annual guidance.

The company said total like-for-like sales were up 9.8% in the period, adding it had spent £60m lowering prices amid criticisms that supermarkets were fuelling inflation by widening profit margins during the cost-of-living crisis.

Sainsbury’s said it still expected underlying pre-tax profit of £640 – 700m in 2023-24, compared with £690m a year earlier.

Housebuilders were under the cosh on the back of a downbeat note by JPMorgan (NYSE:JPM) Cazenove, which reiterated its cautious stance on the sector, arguing that valuations are still above October 2022 levels and that it sees “incremental downside risks to estimates”.

The bank downgraded Persimmon (LON:PSN) to ‘neutral’ and placed Taylor Wimpey (LON:TW) and Vistry on ‘negative catalyst watch’.

Homeware retailer Dunelm (LON:DNLM) was knocked lower by a downgrade to ‘underperform’ at RBC Capital Markets.

“We view Dunelm as a well-managed business with a strong position in the UK homewares market,” it said. “However, with cost of living pressures persisting, unfavourable movements in the UK housing market and only a moderate store expansion story, we think that growth will be more difficult to come by now.”

Market Movers

FTSE 100 (UKX) 7,543.06 0.21%

FTSE 250 (MCX) 18,567.67 0.32%

techMARK (TASX) 4,421.83 0.42%

FTSE 100 – Risers

Ocado Group (LON:OCDO) 617.40p 2.59%

AstraZeneca (NASDAQ:AZN) 10,628.00p 2.45%

SEGRO (SGRO) 740.40p 1.93%

Centrica (LON:CNA) 126.90p 1.76%

Land Securities Group (LAND (LON:LAND)) 598.00p 1.70%

Unite Group (LON:UTG) 890.00p 1.37%

Smith & Nephew (SN.) 1,209.00p 1.17%

JD Sports Fashion (JD.) 147.65p 1.13%

Pershing Square (NYSE:SQ) Holdings Ltd NPV (PSH) 2,914.00p 1.04%

Imperial Brands (LON:IMB) 1,798.50p 1.01%

FTSE 100 – Fallers

IMI (LON:IMI) 1,596.00p -2.03%

3i Group (LON:III) 1,897.00p -1.51%

Sainsbury (J) (SBRY) 270.60p -1.46%

Airtel Africa (AAF) 106.90p -1.38%

Rolls-Royce Holdings (LON:RR.) 151.50p -1.37%

Ashtead Group (LON:AHT) 5,332.00p -1.33%

Weir Group (LON:WEIR) 1,739.50p -1.16%

Barclays (LON:BARC) 153.84p -1.14%

Halma (LON:HLMA) 2,202.00p -1.12%

DCC (CDI) (LON:DCC) 4,365.00p -1.04%

FTSE 250 – Risers

TUI (LON:TUIT) AG Reg Shs (DI) (TUI) 607.00p 3.76%

Molten Ventures (GROW) 264.40p 3.52%

Future (FUTR (LON:FUTR)) 712.00p 3.11%

CLS Holdings (CLI) 141.00p 2.92%

Tritax Eurobox (GBP) (EBOX) 53.20p 2.90%

Target (NYSE:TGT) Healthcare Reit Ltd (THRL (LON:THRL)) 74.50p 2.62%

Watches of Switzerland Group (WOSG) 651.00p 2.44%

Sirius Real Estate Ltd. (SRE) 86.55p 2.43%

UK Commercial Property Reit Limited (UKCM) 51.10p 2.40%

Grainger (GRI) 235.60p 2.35%

FTSE 250 – Fallers

Dunelm Group (DNLM) 1,065.00p -4.91%

Bank of Georgia Group (LON:BGEO) 2,850.00p -3.06%

TBC Bank Group (TBCG) 2,385.00p -2.05%

HICL Infrastructure (HICL) 132.00p -1.93%

Senior (SNR) 171.80p -1.83%

Liontrust Asset Management (LON:LIO) 691.00p -1.78%

IP Group (LON:IPO) 55.40p -1.60%

Hays (LON:HAYS) (HAS) 101.80p -1.36%

Discoverie Group (DSCV) 838.00p -1.30%

Marks & Spencer Group (MKS (LON:MKS)) 193.30p -1.25%