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FTSE 100 weighed down by weak oilers

Last updated: 09:37 10 Aug 2016 BST, First published: 09:38 10 Aug 2016 BST

Shell petrol station

The top-share index opened slightly lower, with the oil heavyweights largely responsible for the decline as the price of oil continues to slide.

The FTSE 100 was down 15 points at 6,837, with Royal Dutch Shell PLC (LON:RDSB) down 1.4% and fellow oil titan BP PLC (LION:BP.) 0.9% weaker.

Insurer Legal & General Group PLC (LON:LGEN), which took a pounding yesterday after its results, clawed back some of those losses, rising 2.5% to 211.1p. Sector peers Prudential PLC, RSA Insurance Group PLC and Aviva PLC were also wanted.

Power systems developer Rolls-Royce Holding PLC (LON:RR.) received a boost from Morgan Stanley, which has upgraded the stock to ‘equal weight’ from ‘underweight’, due to increased confidence in its cash position. The price target was hiked to 780p from 655p, which was coincidentally the level to which the share price has risen, up 16.5p from last night’s close of 753.5p.

Security services provider G4S PLC (LON:GFS) has a lot of repair work to do on its reputation but the market warmed to its half-yearly report today and pushed the shares 14% higher to 223p.

“This update reiterates our view that the company’s recovery plans are gaining momentum and should give investors some comfort ahead, as strong cash generation, productivity and innovation remain a priority,” said Helal Miah, an investment research analyst at retail investor-focused The Share Centre.

Things not getting any worse at Interserve PLC (LON:IRV) was all it took to push shares in the support services and construction group 11.2% higher.

Net debt was reduced to £275.6mln from £308.8mln at the end of 2015, and the group issued improved year-end net debt guidance of £300-£320 million, while the profit outlook for the year was left unchanged, despite the uncertainty engendered by the EU referendum vote.

In the small cap space, dual-listed Harvest Minerals Ltd (LON:HMI, ASX:HMI) was one of the early pace-setters after an encouraging scoping study for its Maximus Direct Application Natural Fertiliser project.

The trading update from Midatech Pharma Plc (LON:MTPH), the oncology and immunology specialist, gingered up the share price, which rose to 134p from 113.5p overnight.

"Since revising revenue guidance up earlier in the year we are pleased to expect revenues to be in line with current market expectations and look forward to continued progress in the second half of the year,” said Dr Jim Phillips, chief executive of Midatech.

Entertainment One Ltd (LON:ETO), the London-listed film distributor and producer best known for owning the rights to the Peppa Pig cartoon and book character, jumped 5.2% to 228.80p as it confirmed a bid approach from ITV.

Reports suggest that the film producer has rejected ITV’s offer.

On the downside, Arcontech Group PLC (LON:ARC) tumbled 12.45 to 0.355p after it said that it was taking longer to win new business than it would like.

“We also need to fully compensate for the reduction in revenue during the year from the Asian focused bank. Our prospects, however, whilst positive need to be tempered against uncertainties in the banking sector as a result of the low interest rate environment and potential issues following Brexit," the real-time financial data provider’s chairman, Richard Last, said.


Snapshot at 8.15am

The FTSE 100 fell just over 28 points this morning to 6,822.        

The top winner was Randgold Resources Ltd (LON:RRS) up over 1% to 8,605p. Brokers update their ratings after it reported flat second quarter profit.

The biggest loser was Smith & Nephew (LON:SN), down 2% to 1,255p, following the sale of its gynaecology unit earlier this week.


Preview at 6.38am

FTSE 100 is called to open lower on Wednesday after a mixed picture in Asia overnight and ahead of Chinese data later in the week.

The UK benchmark closed Tuesday up 0.6%, or 42 points, at 6,851 – its best level since late May 2015, while the mid-cap FTSE 250 rose 0.7% to 17,687 – its highest level since late June 2015.

Today, financial spread betters at IG Index are calling Footsie to start 16 lower.

In Asia, with an hour to go, the Nikkei 225 index in Japan is 0.18% ahead, while the Shanghai Composite Index is 0.10% lower at 16,794.

In Japan, machine orders for June were better than expected, which boosted equities.

On Friday, markets await significant data from the economic superpower, including  industrial production, fixed asset investment and retail sales, which will show if growth has stalled or is improving.

In the US stocks did well yesterday, with the tech heavy Nasdaq composite posting a fresh record close at 5,225.48, up 0.24%.

The Dow Jones industrial average exchange closed just 0.02% up at 18,533, while the S&P500 gained just 0.04% to 2,181, so both indexes didn't move the needle much.

In the UK, there's not much company news ahead as the summer holiday season continues, but pensions giant and insurer Prudential PLC (LON:PRU) is posting half year numbers.

Investors will be looking for any comment on the Brexit vote and Panmure Gordon, City broker, forecasts a flat performance as underlying growth and foreign exchange tailwinds, due to the weaker pound, are offset by, among other factors, lower sales in the UK.

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