The FTSE 100 was struggling to extend its recent recovery as it looks to recoup all of this year’s losses, dipping into the red in late morning dealings.
A strong session in Wall Street and Asia and firmer oil prices boosted European indices in early trading but the FTSE 100 cooled heading towards midday, trading broadly flat, down 4.20 points to 6,148.68.
Companies weakened by their exposure to a slowing Chinese economy were stemming London’s losses as metals rise and investors took on more risk.
Asia-exposed Standard Chartered was up 3.5 per cent to almost 447p and HSBC 2.8 per cent to 473¾p. Burberry, the subject of vague takeover speculation recently, 2.1 per cent to £13.81.
Weighing on the FTSE was ITV, down 3.5 per cent to 240¾p, despite posting full-year profits of £843 million, beating the expectations of analysts, and declaring a 10p special dividend. Investors instead focused on the outlook for advertising revenues in ITV’s first quarter. The broadcaster expects them to be flat but positive in the following three months as advertisers prepare for the European football championships this summer.
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Investors also sold Intertek, down 4.3 per cent to £28.74, as the testing and standards services company swung to an annual loss of £307.7 million, hit by an impairment charge blamed on exposure to the oil and gas industry.
Precious metals miners remain weak as the price of gold fell for a second session on a stronger dollar. Randgold Resources fell 1.9 per cent to £62.05.
The FTSE 250, which is a closer reflection of the UK economy than its bigger cousin, was in the red by late morning, down 21.69 per cent to 16,767.80.
Entertainment One shed 12.3 per cent to about 152p, the biggest faller, after revenues fell in the first nine months of its financial year as growth in its television business was weighed down by a weakness in its films division.
Poundland’s shares were also trading in the red after the discount retailer announced the departure of Jim McCarthy as chief executive after a decade in charge, to be replaced by Kevin O’Byrne, the former B&Q boss. Mr McCarthy, who led Poundland to the stock market at 300p a share in 2014, holds 10 million shares, or 3.72 per cent of the company. Clive Black, an analyst at Shore Capital, said the weakness in Poundland’s shares, down 2.2 per cent to 177¼p, was more to do with the change in leadership.
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Virgin Money is outperforming the mid-cap index, however, jumping 6.1 per cent to almost 361p after the lender posted a 53 per cent rise in underlying annual profits to £160.3 million.