London midday: FTSE maintains gains as banks rally

(Sharecast News) - London stocks were still in the black by midday on Monday despite escalating Middle East tensions, with banks pacing the advance.

The FTSE 100 was 0.7% firmer at 10,620.27. At the same time, oil prices crept higher again, with Brent crude and West Texas Intermediate up 0.9% at $105.64 and $92.67 a barrel, respectively, as investors weighed up Donald Trump's declaration of an "energy ceasefire" between Russia and Ukraine against another Houthi attack on a Saudi airport over the weekend.

Russ Mould, investment director at AJ Bell, said: "Donald Trump's claim that Russia and Ukraine had entered an 'energy ceasefire' has not had a significant impact on energy prices, leaving the two major oil benchmarks - Brent and WTI - at elevated levels.

"There is scepticism over any energy ceasefire given Russia attacked various energy facilities in Ukraine after Trump made his statement.

"The news follows a pact by Trump with Russia on diesel supplies to seemingly try and lower energy prices before the midterm elections to help reverse his waning popularity with voters. Energy market experts believe the deal to import certain amounts of Russian diesel into the US won't move the needle as the quantities are small and any impact won't be felt before the midterms."

Mould said financial markets "have taken even the smallest pullback in energy prices to be a win".

Looking ahead to the rest of the week, US quarterly bank earnings will start rolling in on Tuesday, with JP Morgan, Wells Fargo, Citigroup and Goldman Sachs all slated to report.

In UK equity markets, banks were on the rise, with HSBC, Barclays and Lloyds all higher.

Mould said: "Banks have faced headwinds in recent weeks as investors feared a steady increase in interest rates could make it too expensive for many businesses and consumers to borrow money, thereby curbing growth opportunities for the sector.

"Should energy-related inflationary pressures not be as intense as previously feared, it could lead to the Bank of England avoiding big interest rate hikes over the coming year. Markets are currently pricing in four quarter point hikes by next July."

Standard Life advanced after an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets.

Metlen Energy & Metals nudged higher as it signed a collaboration agreement with Thales Alenia Space and Thales Hellas to pursue opportunities in Greece's planned defence telecommunications satellite programme.

On the downside, recruiter Hays tumbled as it reported a 3% decline in first-quarter like-for-like net fees.

Pennon Group also slumped after Deutsche Bank downgraded the shares to 'hold' from 'buy' and slashed the price target to 380p from 550p as it said the near-term buy case now looks increasingly difficult for several reasons.

Market Movers

FTSE 100 (UKX) 10,620.27 0.65%

FTSE 250 (MCX) 24,267.20 0.22%

techMARK (TASX) 6,165.65 0.61%

FTSE 100 - Risers

Convatec Group (CTEC) 228.20p 3.55%

Lion Finance Group (BGEO) 12,750.00p 3.49%

HSBC Holdings (HSBA) 1,424.80p 2.13%

Standard Life (SDLF) 862.50p 1.77%

London Stock Exchange Group (LSEG) 8,830.00p 1.68%

Legal & General Group (LGEN) 291.20p 1.67%

BAE Systems (BA.) 1,890.50p 1.64%

Babcock International Group (BAB) 927.20p 1.62%

Standard Chartered (STAN) 2,155.00p 1.56%

Computacenter (CCC) 5,635.00p 1.53%

FTSE 100 - Fallers

Informa (INF) 873.00p -2.55%

3i Group (III) 2,383.00p -1.37%

WPP (WPP) 381.20p -1.30%

Vodafone Group (VOD) 117.00p -1.23%

Kingfisher (KGF) 318.00p -0.97%

Barratt Redrow (BTRW) 288.50p -0.65%

InterContinental Hotels Group (IHG) 158.00p -0.63%

Centrica (CNA) 147.25p -0.51%

JD Sports Fashion (JD.) 84.10p -0.47%

BP (BP.) 583.60p -0.43%

FTSE 250 - Risers

Raspberry PI Holdings (RPI) 697.75p 5.34%

Amaroq Ltd. Npv (DI) (AMRQ) 122.00p 4.49%

PPHE Hotel Group Ltd (PPH) 1,498.00p 4.32%

Globaldata (DATA) 62.05p 3.88%

Lancashire Holdings Limited (LRE) 668.00p 3.33%

Cranswick (CWK) 5,130.00p 2.91%

Utilico Emerging Markets Ltd (DI) (UEM) 304.00p 2.70%

Ocado Group (OCDO) 304.80p 2.63%

Helios Towers (HTWS) 221.20p 2.59%

Oxford Biomedica (OXB) 535.00p 2.30%

FTSE 250 - Fallers

AEP Plantations (AEP) 181.40p -8.77%

Hays (HAS) 59.35p -7.63%

Michael Page (PAGE) 202.20p -4.62%

SSP Group (SSPG) 172.40p -4.38%

Taylor Wimpey (TW.) 72.48p -1.68%

Pan African Resources (PAF) 115.20p -1.54%

Energean (ENOG) 719.50p -1.51%

Trainline (TRN) 206.00p -1.43%

Fidelity China Special Situations (FCSS) 242.00p -1.43%

Pacific Horizon Inv Trust (PHI) 1,108.00p -1.42%