Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors
Markets

FTSE 100 slides despite strong updates from Admiral and CRH

With half an eye on tomorrow's jobs release in the US investors took money off the table
Carcrash.jpg
Car insurer Admiral was the top performer among Footsie stocks

London's leading shares drifted lower ahead of the release of February's jobs data in the US.

The FTSE 100 ended the day at 6,130, down 17 points.

Warmly received trading updates from car insurer Admiral Group (LON:ADM) and building materials group CRH (LON:CRH) limited damage to the Footsie.

Admiral motored 159p higher to 1,919p as it announced a record profit before tax of £377mln for 2015, up 6% year-on-year.

CRH advanced 85p to 1,935p after reporting 2015 was a year that was strong on cash generation. Profit before tax climbed to €1.03bn from €761mln the year before.

Elsewhere in the Footsie, Costa Coffee and Premier Inns owner Whitbread (LON:WTB) gave up 249p to close at 3,800p as results raised concerns that the London hotels market was now on the downward part of the cycle.

“Not to put too fine a point upon it, London is in a downswing and the regions, though there will be a lag, may follow,” suggested Mark Brumby at Langton Capital.

Meanwhile Brumby noted that growth at Costa slowed materially in the fourth quarter, partly because of the warm winter weather.

Full-year results from oil field support services outfit Hunting (LON:HNTG) were a pleasant surprise, and indicated the group is adapting more quickly to the changing market environment than had been expected.

The shares closed 414p, up 14% on the day.

ECR Minerals (LON:ECR) rose 11.1% to 0.03p as it announced its Australian subsidiary, Mercator Gold Australia, had agreed to buy the Avoca and Bailieston gold projects in Victoria, Australia.

Hydrogen storage and fuel systems group ITM Power (LON:ITM) was on a charge after it revealed its project pipeline had risen to £18.7mln. The shares rose 8% to 13.5p.

Also up 8% was Mytrah Energy (LON:MYT), the Indian wind power group, which announced it had refinanced its existing portfolio of sites through a US$380mln debt package with three banks.

Petroceltic (LON:PCI) shares tumbled by almost a third to 6.81p as it once again urged shareholders to take no action in respect of the 3p-a-share offer from activist shareholder Worldview Capital.


 


MID-SESSION

Rising copper prices helped London traders to shrug off disappointing services data on Thursday.

Shares in miners rose as the price of the red metal hit a three-and-a-half-month high, helping the FTSE 100 Index to pare losses and rise 8.9 points to 6156 at lunchtime.

Analysts said the rise was due to fresh hopes that Beijing would take action to stimulate the Chinese economy.

The index had earlier been held back after unofficial Caixin services PMI data echoed official figures earlier in the week, with the headline activity index down 1.2pts to 51.7.

In the eurozone, services data fared a little better than the manufacturing equivalent, but was still down for the second month in a row to 53.0, the lowest since the start of 2015.

The news in the UK was worse as purchasing managers index data showed growth in the services sector slowing to its weakest in nearly three years in February.

There were yet more warnings of the damage that a UK departure from the EU could do to Britain's economy.

Bosses of BMW-owned car companies in the UK, including Rolls-Royce Motor Cars and Mini, wrote to their workers warning that an exit would be bad for business.

And foreign exchange trader Caxton FX said it could spark a currency crisis. Analyst Nicholas Laser-Ebisch said: "Investors would leave the UK market faster than a jack rabbit on a hot greasy griddle in August."

Car insurer Admiral (LON:ADM) rallied 119p to 1879p as it reported a 6% rise in pre-tax profit to £377mln and hiked its dividend by 16% to 114.4p per share.

Genel Energy (LON:GENL) recovered losses earlier this week after a 22% rise in production against a year earlier partly offset a 34% drop in revenues for 2015 as a result of falling oil prices. Shares in the Kurdistan-focused producer jumped 9p to 86.75p.

Shares in Domino's Pizza (LON:DOM) cooled 16p to 1033p after the takeaway chain reported higher profits and a good start to 2016 but said it would face an uphill task to match last year's strong performance.

Strategic Minerals (LON:SML) saw good demand for magnetite from its Cobre site in New Mexico, but said commodity price falls had seriously affected its ability to carry through its strategy. Shares fell 13% to 0.1p.

Challenger Acquisitions (LON:CHAL), which invests in big observation wheel projects such as the London Eye, descended 0.12p to 22.6p after raising £500,000 in a convertible loan note issue.

Petra Diamonds (LON:PDL) twinkled 5p to 108p as Macquarie upgraded the miner to 'outperform' from 'neutral'.

But the Australian investment bank did the reverse with rival diamond company Gem Diamonds (LON:GEMD), causing its shares to fall 0.09p to 43.91p.

LONDON OPEN

Disappointing services sector data in China and Europe left London shares lower on Thursday.

The FTSE 100 Index fell about 16 points to 6131 after unofficial Caixin services PMI data out overnight echoed official figures earlier in the week, with the headline activity index down 1.2pts to 51.7.

Analysts at Daiwa Capital Markets said in a note: "Given the deterioration in the equivalent manufacturing survey earlier in the week, this left the composite output PMI back in contraction territory for the fifth month out of the past seven."

In the eurozone, services data fared a little better than the manufacturing equivalent, but was still down for the second month in a row to 53.0, the lowest since the start of 2015.

And in the UK, there was more bad news as purchasing managers index data showed growth in the services sector slowing to its weakest in nearly three years in February.

In the markets, oil continued its descent after US inventory data on Wednesday showed rising stockpiles, adding to the world's supply glut. The price of a barrel of Brent crude dropped 0.7% to US$36.7.

Genel Energy (LON:GENL) recovered losses earlier this week after a 22% rise in production against a year earlier partly offset a 34% drop in revenues for 2015 as a result of falling oil prices. Shares in the Kurdistan-focused producer jumped 5.5p to 83.25p.

Shares in Domino's Pizza (LON:DOM) were 3p cooler at 1046p after the takeaway chain reported higher profits and a good start to 2016 but said it would face an uphill task to match last year's strong performance.

Strategic Minerals (LON:SML) saw good demand for magnetite from its Cobre site in New Mexico but said commodity price falls had seriously affected its ability to carry through its strategy. Shares fell 13% to 0.1p.

Challenger Acquisitions (LON:CHAL), which invests in big observation wheel projects such as the London Eye, ascended 0.25p to 23p after raising £500,000 through the issue of convertible loan notes.

MARKET PREVIEW

London’s blue-chip stocks are set to start Thursday mostly flat, after the rally in global equities cooled somewhat.

Better oil prices brought markets higher earlier in the week, but, now Friday’s US employment stats for February are coming into focus.

Wednesday saw Wall Street edge higher, with the Dow Jones ending 34 points or 0.2% into positive territory at 16,899 while the S&P 500 and Nasdaq rose 0.4% and 0.3% respectively.

In Asia, stocks also mostly moved higher.

Japan’s Nikkei gained over 200 points, about 1.3%, to 16,960.

The Shanghai Composite notched up a 0.15% rise, while Hong Kong’s Hang Seng was the odd one out with a 144 point or 0.7% decline.

Australia’s ASX 200 moved some 60 points, 1.2%, higher.

Crude prices remain supportive. Brent crude was slightly higher early this morning, at $36.85 per barrel, and US crude futures climbed 0.7% to change hands at $34.65.

In London, CFD and spread betting firm IG Markets is calling the FTSE 100 down by about 5 points at 6,140 to 6,145.

John-H.jpg

© Proactive Investors 2016

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.