London stocks were down but off earlier lows by midday on Tuesday as M&A news helped to offset a disappointing reading on the UK construction sector.
The FTSE 100 was down 0.2% to 7,365.51, while the pound was trading below 1.30 against the dollar, flat at 1.2938, and 0.1% firmer versus the euro at 1.1398. US markets will be closed for Independence Day, so volumes are likely to be lighter than usual.
Geopolitical tensions were in focus earlier as North Korea said it has successfully test-launched a long-range intercontinental ballistic missile, which could potentially reach the US mainland.
On the data front, UK construction activity weakened more than expected last month, according to a survey published from Markit/CIPS that revealed the lowest levels of optimism about growth this year. The construction purchasing managers' index for June came in at 54.8, down from 56.0 the month before and short of the City's consensus forecast of 55.0.
A PMI reading above 50 indicates growth and the industry has exceeded this level for 10 months now.
However, June's data revealed weaker growth momentum across the UK construction sector, Markit said, with business activity, new work and employment all expanding at slower rates than the prior month.
Housebuilding continued to outperform commercial and civil engineering construction work, with residential activity in June the second-fastest month since December 2015.
Construction businesses reported signs of renewed risk aversion among clients, reflecting concerns about the economic outlook and heightened political uncertainty.
Howard Archer, chief economic advisor to the EY Item Club, said: “Following on from a significantly weaker manufacturing survey, the softer construction PMI points to the economy faltering in June as heightened political uncertainties have fuelled business and consumer caution. Much attention will be focused on Wednesday's release of the PMI for the key services sector, which has been finding life generally much more challenging in 2017.”
M&A news provided a boost, with payments processor Worldpay surging 22% after confirming it has received preliminary approaches from US-based payment processing and technology provider Vantiv Inc and JPMorgan Chase Bank over a potential acquisition.
Sainsbury's pushed higher after saying it enjoyed a strong start to its financial year as grocery sales growth accelerated and general merchandise, including Argos, outperformed the market.
Budget airline Ryanair ticked up after it posted a 12% rise in passenger numbers in June to 11.8m as the load factor ticked up to 96% from 94%, while Hunting rose after saying it expects to report a positive EBITDA but remain loss-making in the first half.
Imagination Technologies reversed earlier losses to trade higher after saying it swung to a full-year pre-tax profit but that it had made no progress in its dispute with Apple, which announced earlier this year that it would not be using the company's technology in new products.
Low-cost airline Wizz Air flew lower despite reporting a 23.6% jump in passenger number on the year in June to 2.49m, while the load factor nudged up to 92.3% from 91.7%.
FTSE 100 (UKX) 7,365.51 -0.16%
FTSE 250 (MCX) 19,286.02 -0.18%
techMARK (TASX) 3,487.09 -0.31%
FTSE 100 – Risers
Worldpay Group (WPG) 389.80p 22.00%
DCC (DCC) 7,015.00p 1.59%
Fresnillo (FRES) 1,488.00p 1.50%
RSA Insurance Group (RSA) 624.00p 1.22%
Randgold Resources Ltd. (RRS) 6,795.00p 1.19%
Direct Line Insurance Group (DLG) 362.30p 1.17%
Sainsbury (J) (SBRY) 251.20p 0.92%
Persimmon (PSN) 2,284.00p 0.79%
British Land Company (BLND) 608.00p 0.75%
WPP (WPP) 1,625.00p 0.74%
FTSE 100 – Fallers
Provident Financial (PFG) 2,324.00p -1.86%
Ashtead Group (AHT) 1,564.00p -1.26%
Smurfit Kappa Group (SKG) 2,370.00p -1.25%
BAE Systems (BA.) 624.00p -1.19%
GKN (GKN) 325.40p -1.18%
Anglo American (AAL) 1,053.00p -1.13%
Smith & Nephew (SN.) 1,318.00p -1.05%
Scottish Mortgage Inv Trust (SMT) 397.20p -0.95%
3i Group (III) 896.00p -0.94%
Hargreaves Lansdown (HL.) 1,269.00p -0.94%
FTSE 250 – Risers
Virgin Money Holdings (UK) (VM.) 277.60p 2.66%
Vectura Group (VEC) 113.40p 2.25%
Tullow Oil (TLW) 159.70p 2.11%
Paysafe Group (PAYS) 516.00p 2.08%
Hunting (HTG) 500.50p 1.87%
Petrofac Ltd. (PFC) 469.00p 1.85%
Rank Group (RNK) 233.20p 1.83%
Wood Group (John) (WG.) 645.50p 1.49%
Serco Group (SRP) 113.60p 1.43%
Smith (DS) (SMDS) 487.80p 1.39%
FTSE 250 – Fallers
Sirius Minerals (SXX) 27.47p -3.38%
Sophos Group (SOPH) 438.00p -3.16%
Ferrexpo (FXPO) 203.80p -2.39%
Acacia Mining (ACA) 280.60p -2.33%
IP Group (IPO) 127.90p -2.29%
FDM Group (Holdings) (FDM) 750.00p -2.15%
Essentra (ESNT) 566.00p -1.82%
Evraz (EVR) 216.30p -1.68%
Pennon Group (PNN) 821.50p -1.56%
IG Group Holdings (IGG) 550.50p -1.52%