London stocks extended losses by midday on Monday, weighed down by energy shares
and a stronger pound, as investors continued to assess the impact of US-led airstrikes in Syria at the weekend, although Whitbread and Shire were bright spots.
The FTSE 100 was down 0.5% to 7,230.68, while the pound was up 0.2% versus the euro at 1.1568 and 0.5% higher against the dollar
at 1.4302. A stronger pound tends to dent the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
Over the weekend, the US, France and Britain launched more than 100 missiles targeting facilities in Syria, a significant number of which Syria claims to have shot down, in what was called a "one time shot" by the Pentagon.
Energy stocks leaked lower as oil prices
fell back after last week's big gains, with Brent crude down 1.3% to $71.67 a barrel and West Texas Intermediate 1.2% lower at $66.68. BP was down 1.6% while Shell was 0.9% lower.
Joshua Mahony, market analyst at IG, said: "The strike on Syrian chemical locations over the weekend marks the end of the recent standoff which saw oil prices hit a three-year high in anticipation of a greater Western presence in the Syrian conflict. Market realisation that this attack largely draws the line under the issue has brought about a sharp decline in oil prices in early trade."
The pound was climbing as Brexit related news has returned to the UK headlines, with UK and EU officials return to the negotiating table this week to start drawing out the terms of the post Brexit trade relationship.
Sterling is currently the best performing G10 currency in the year to date, noted Rabobank strategist Jane Foley.
"The agreement on the Brexit transition deal combined with expectations that the BoE is set to hike rates again in May have both been supportive for the currency in recent months," she said, though acknowledging that there are clear caveats to this optimistic outlook, including signs that the UK economy has lost momentum and potential hurdles in Brexit trade talks.
Meanwhile, the high street was in focus after figures from the British Retail Consortium revealed that footfall fell by 6% in March compared with the same month last year, as shoppers were deterred by the bad weather.
In individual company news, advertising giant WPP fell on news that Sir Martin Sorrell has stepped down as chief executive officer with immediate effect, with chairman Roberto Quarta becoming executive chairman until the appointment of a new CEO. Sorrell, whose exit follows an internal investigation into allegations pf personal misconduct, will be treated as having retired from the company, meaning he will be entitled to up to 1.65m shares under long-term award plans dependent on WPP's performance.
Vedanta Resources dropped as it announced the appointment of AngloGold Ashanti boss Srinivasan Venkatakrishnan as its new chief executive officer.
Polymetal International lost ground after reaching an agreement with the Russian Copper Company for an all-share exchange of its Tarutin property in Russia, for 85% of RCC's East Tarutin property in Kazakhstan.
Software company Sage Group was weaker after its profit warning on Friday, as Citi maintained its' buy' rating on the stock but cuts its overall organic revenue growth forecast for FY18-20 by around one percentage points per year and trimmed its operating margin estimates to reflect the lower top line.
On the upside, Premier Inn and Costa owner Whitbread surged as Elliott Advisers became its biggest shareholder, with reports the activist investor is piling pressure on the company to break up the business and spin off its Costa Coffee arm.
Shire, for whom the boss of Japanese drug maker Takeda is reportedly readying a £35bn bid, was in the black after agreeing to sell its oncology business to Servier for $2.4bn in cash.
Smurfit Kappa gained following a Sunday Times report that some of its largest investors have started to pressure the company to negotiate with International Paper if it comes back with another takeover bid of more than 40 per share.
Specialty chemicals group Johnson Matthey was higher after announcing the appointment of Patrick Thomas as chairman, succeeding Tim Stevenson. Thomas has been CEO and chairman of the board at polymers business Covestro since 2015.
Galliford Try slipped after confirming it had raised £144.2m as 91.5% of its discounted rights issue of new shares was accepted b shareholders, backing management's plans to invest in growth.
In broker note action, Barclays was upgraded to 'buy' at Jefferies, while Tesco was raised to 'hold' at Societe Generale. Kaz Minerals and Vedanta Resources were cut to 'neutral' from 'buy' at Goldman Sachs.
FTSE 100 (UKX) 7,230.68 -0.47%
FTSE 250 (MCX) 19,833.05 -0.03%
techMARK (TASX) 3,370.98 0.11%
FTSE 100 - Risers
Whitbread (WTB) 4,197.00p 6.66%
Smurfit Kappa Group (SKG) 3,040.00p 1.95%
Rolls-Royce Holdings (RR.) 883.60p 1.94%
easyJet (EZJ) 1,639.00p 1.74%
Marks & Spencer Group (MKS) 276.00p 1.55%
International Consolidated Airlines Group SA (CDI) (IAG) 618.40p 1.54%
Shire Plc (SHP) 3,653.00p 1.29%
DCC (DCC) 6,720.00p 0.98%
Paddy Power Betfair (PPB) 7,185.00p 0.91%
Barclays (BARC) 215.15p 0.84%
FTSE 100 - Fallers
WPP (WPP) 1,116.00p -6.06%
Sage Group (SGE) 599.80p -2.79%
Rentokil Initial (RTO) 272.90p -2.36%
Evraz (EVR) 383.80p -2.24%
Micro Focus International (MCRO) 1,272.50p -2.04%
HSBC Holdings (HSBA) 672.10p -1.91%
BP (BP.) 496.20p -1.61%
Fresnillo (FRES) 1,265.00p -1.48%
SSE (SSE) 1,296.50p -1.11%
Mondi (MNDI) 1,941.50p -1.10%
FTSE 250 - Risers
Hammerson (HMSO) 488.50p 3.28%
Mitchells & Butlers (MAB) 266.60p 3.01%
JD Sports Fashion (JD.) 356.80p 2.65%
Capital & Counties Properties (CAPC) 278.60p 2.46%
Greene King (GNK) 571.00p 2.33%
Capita (CPI) 149.90p 2.22%
Drax Group (DRX) 308.20p 2.19%
Coats Group (COA) 79.60p 2.05%
Provident Financial (PFG) 698.60p 2.04%
Wizz Air Holdings (WIZZ) 3,454.00p 1.98%
FTSE 250 - Fallers
Polymetal International (POLY) 630.40p -6.69%
Hunting (HTG) 732.50p -4.44%
Vedanta Resources (VED) 719.80p -3.72%
Tullow Oil (TLW) 212.70p -3.45%
Intu Properties (INTU) 212.10p -3.42%
TalkTalk Telecom Group (TALK) 118.20p -2.64%
Kaz Minerals (KAZ) 875.40p -2.63%
IP Group (IPO) 129.40p -2.56%
Playtech (PTEC) 814.00p -2.35%
Centamin (DI) (CEY) 150.05p -2.18%