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FTSE 100 ends lower but European shares fare worse

London stocks were on the front foot this morning, but they quickly retreated this afternoon...
easyjet plane
It's been a bad week for easyJet investors, with shares down 7%
  • FTSE 100 clses down 34 at 7,452

  • FTSE 250 closes 12.7 down

  • Airliners and Paddy Power take a bashing

FTSE 100 ended lower but did not fare as bad as its European counterparts, as the strong Euro took its toll on equities there.

Britain's blue chip benchmark closed down over 34 at 7,452, having promised better earlier in the day,  while the mid-cap FTSE 250 fell 12.7 at 19,571.

Brent crude added 1.19% to US$49.28 a barrel, while  the gold price firmed 0.8% to US$1,248 an ounce.

David Madden, at CMC Markets, noted: "The fear the European Central Bank will discuss the possibility of trimming its bond buying scheme later this year has driven investors to dump their eurozone equities. To make matter worse, the relative strength of the euro is making eurozone stocks more expensive."

Back to London, and the big loser was G4S (LON:GFS), which shed 3.17% to 330p. Paddy Power Betfair plc (LON:PPB) was also down - ending 2.14% lower at 7,540p.

The bookmaker a blow today as broker Investec issued a ‘sell’ note on the stock and warned that next month’s first half results will reveal that it’s been a rough few months.

“We expect the market to be surprised by what we expect will be a disappointing second-quarter and first-half,” noted analyst Alistair Ross.

 On the winning front, drugs giant Shire Plc (LON:SHP) added 1.86% to 4,156.5p.

3.30pm FTSE 100 down 50

The FTSE 100 started off the day on the front foot, so much so that someone (not sure who it could be) suggested that it could test its all-time closing high of 7,547.6 if it put in a solid performance this afternoon.

Suffice to say that performance has not been forthcoming; in fact it’s been quite the opposite.

The blue chip index is currently down 50 points, or 0.7%, to 7,437 having been 25 points in the black at one point this morning.

Paddy Power and airlines weigh heavy

It was the same old faces topping the fallers list this afternoon. Paddy Power Betfair plc (LON:PPB) can’t catch a break at the moment as investors pull out amid concerns over tighter regulation.

The bookmaker suffered another blow today as City broker Investec issued a ‘sell’ note on the stock and warned that next month’s first half results will reveal that it’s been a rough few months.

“We expect the market to be surprised by what we expect will be a disappointing second-quarter and first-half,” said analyst Alistair Ross.

Paddy Power shares have been in freefall since the end of June and were down another 2.3% today to £74.10. Less than a month ago they were changing hands for £87.55.

The airliners have taken a bit of a kicking this week as well after easyJet PLC (LON:EZJ) boss Carolyn McCall sounded rather cautious about the effect of competition on ticket prices yesterday.

“With the ongoing low cost of fuel allowing capacity to stay in the market, easyJet currently expects continued pressure on yields into the next financial year.”

easyJet has shed another 4.9% today to sit at £13.08, while fellow airliner and British Airways owner International Consolidated Airlines Group (LON:IAG) is down 0.9% to 588p.

ConvaTech and Vodafone enjoy day in the sun

ConvaTec Group PLC (LON:CTEC) has maintained its position as the Footsie’s top riser throughout the day as investors continued to cheer Thursday’s US$120.5mln of US-based medical supplies distributor MTS Health Investors. Shares jumped 2.8% to 315p.

Vodafone PLC (LON:VOD) was another decent riser after it reported a decent first quarter and showed some strong growth in service revenues, particularly in European markets.

For the three months to the end of June, group sales fell 3.3% to €11.5bn, although this was in part due to the telecoms giant offloading its Netherlands business and the weaker pound.

However, Vodafone’s preferred metric of comparable sales was up 2.2% to €10.3bn. That was the figure investors have focused on as the stock has moved 1% higher 226p.

Clothes retailer Next Plc (LON:NXT) was also in the black, up 1.9% to £38.20, as the bump from yesterday’s better-than-expected retail sales data rolled over in to today.

Slow start in the US

Over in the States, the markets got off to a sluggish start as had been expected.

The Dow Jones shed 0.3%, or 65 points, to 21,547 and the S&P 500 gave up 5.5 points, or 0.2%, to 2,467.8.

Elsewhere, the tech-heavy Nasdaq also slipped  by 0.2%, or 16 points, to 6,374, dragged lower by e-commerce giant eBay Inc (NASDAQ:EBAY).

 

2.15pm... US markets to open lower says futures

After US stocks made a mixed finish yesterday, futures are showing a lower open, and in focus will be eBay (NASDAQ:EBAY)  after it reported  in-line earnings for its second quarter.

The shares are down over 4% in pre-market deals to $35.69 after the internet auction giant based in California forecast third-quarter adjusted earnings of 46 US cents to 48 US cents per share.

 

1.45pm... More woe for easyjet

Airlines are dominating the market and in easyjet's case for the wrong reasons. Today is the start of holiday getaway weekend as schools break up for the summer, but for one unfortunate and unaccoompanied child travelling with easyjet this resulted in him being booted out of his seat and left at the checking-in gate on his own.

"Luckily, I had still not got on board my train to London and could come back and find him," said his furious mother.

Easyjet shares are down 7% today at 1,273, making the airline the worst FTSE 100 performer by some distance.

 

11.45am ... easyjet knocked even though Liberum ups target price

Sell remains the broker's view. "Competitor capacity is persisting, sustained by low fuel prices. Margins remain respectable, but rebuilding them to the previous peak requires higher fuel prices to squeeze competitors or greater non-fuel cost savings than currently targeted. We raise our target price to 1100p from 1000p on higher short-term earnings," Shares fell 48p to 1,289p.

 

11.02am ... FTSE 100 eases back as pound surges

FTSE 100 has retreated after good early gains sparked by the £3bn bid for online payment group Paysafe PLC.

The index is now five points lower at 7,483 having been 25 better at one point.

Vodafone PLC (LON:VOD) is still topping the pile after results confirmed that demand for mobile data across Europe is booming. Shares rose 1.9% to 227.9p.

Prudential PLC (LON:PRU) up 14p at 1,801p and London Stock Exchange PLC (LON:LSE) 28p better at 3,799p reflected a good week for the index even so.

A Reuters report that AstraZeneca boss (LON:AZN) Pascal Soriot intends to deliver data at a conference in September has eased some of the talk that he is off to Israeli generic drug group Teva (NYSE:TEVA). Shares rose 35p to 5,158p.

Paddy Power Betfair PLC (LON:PPB) was under more pressure, dropping 4% to 7,395.  The bookie cum bet exchange giant has been taking a bit of a battering recently and has shed 15% since the middle of June.

Mixed trading numbers from easyjet PLC (LON:EZJ) earlier in the week continue to take the wind off its ailerons.

The carrier dropped a further 4% to 1,279p with uncertainty over who will be chief executive now that Carolyn McCall is moving to ITV.

10.02am ... UK public sector borrowing rises 

UK public sector net borrowing jumped to £6.9bn in June, compared to £6.7bn in May and analysts expectations of £4.7bn.

Britain has borrowed £22.8bn since the start of the financial year in April, £1.9bn more than in the same period in the previous financial year, the Office for National Statistics said.  

However, Capital Economics said not to read too much into the borrowing figures for the first few months of the fiscal year as they are based on a significant amount of forecast data.

"But we think that borrowing for the fiscal year as a whole will increase by about 15%, as temporary factors that lowered borrowing last year are reversed," it said.

"This could limit the scope for any easing in the planned fiscal squeeze. Accordingly, we think that fiscal policy will still provide a significant drag on GDP growth over the next few years."

 

9.25am ... Paysafe surges on news of takeover offer

It’s been a difficult six months or so for UK payments company Paysafe Group PLC (LON:PAYS) but today’s £3bn offer might be the light at the end of the tunnel.

Shares slumped by a third in the final couple of months of 2016 as it came under pressure from bearish short-sellers – those who bet on the company’s share price falling – over concerns about its business processing gambling payments in Asia.

Since then the FTSE 250-listed group’s shares have rallied and today’s offer from private equity firms CVC and Blackstone represents an all-time high for the share price.

Given that the offer is at a decent premium to yesterday's closing price of 542p, it’s no surprise that the stock is 8% up in early deals to 582.5p.

 

9.10am ... Vodafone helped out by our 'insatiable desire for data'

Here's what ETX Capital analyst Neil Wilson had to say on Vodafone PLC's (LON:VOD) first quarter update this morning:

“There were some really impressive numbers as the company benefits from consumers’ insatiable desire for data.

“For example Vodafone enjoyed a 39% increase in data usage per smartphone customer in Europe. Data traffic grew 63% worldwide which is equivalent to all the quarterly data traffic two years ago.”

He also touched on the Indian business which was once the jewel in the crown of Vodafone but has struggled more recently.

Vodafone will be pleased it can exclude India from these results after its decision to combine the business Idea Cellular.

“Despite adding 3.4 million 3G/4G customers and seeing data usage double, fierce pricing competition led to a 13.9% drop in organic service revenue.

“Spinning it off was a smart move and one that will shield shareholders as the price war continues.”

 

8.45am ... FTSE 100 makes decent start

The FTSE 100 has opened in positive territory once again this week, albeit slightly less impressively than it has done on other occasions this week.

The blue chip index is currently up 0.1%, or 9 points, to 7,494. That takes its total gains for the week so far to a fairly impressive 112 points, or 1.5%.

It’s still a little way off its all-time closing high of 7,547.6 which it reached at the start of the June, but a strong run today would potentially tee it up for a crack at it next week.

There are a host of big guns with updates or results out next week, including AstraZeneca PLC (LON:AZN), GlaxoSmithKline (LON:GSK) and Lloyds Banking Group PLC (LON:LLOY), all of which could boost the FTSE 100.

Decent Q1 update boosts Vodafone

Before we get too far ahead of ourselves, Vodafone PLC (LON:VOD) was one of the biggest risers on the Footsie this morning after it reported a decent first quarter and showed some strong growth in service revenues, particularly in European markets.

For the three months to the end of June, group sales fell 3.3% to €11.5bn, although this was in part due to the telecoms giant offloading its Netherlands business and the weaker pound.

However, Vodafone’s preferred metric of comparable sales was up 2.2% to €10.3bn. That was the figure investors focused on as the stock moved 2.2% higher 228.6p.

ConaTec top riser though

Top spot went to ConvaTec Group PLC (LON:CTEC) though, which was still in the market’s good books following its US$120.5mln buy of US-based medical supplies distributor MTS Health Investors.

The colostomy bag maker added 3.2% to its value in early deals to stand at 316p.

Paddy Power slide continues

Heading lower was bookmaker Paddy Power Betfair PLC (LON:PPB), which has been unable to halt its share price slide of recent weeks.

The Dublin-headquartered group was down another 0.8% this morning to £75.30, meaning it has seen almost 15% wiped off the value of its shares since the end of June.

Small-cap recruiter Empresaria zips higher

Over in the small caps, specialist recruiter Empresaria Group PLC (LON:EMR) was making strides this morning after telling investors it enjoyed a record first half of trading.

Net fee income soared by 26% compared to the same period of 2016 as UK firms put any post-Brexit blues firmly in the rear view mirror. There was also strong trading on the Continent and over in the Asia Pacific regions.

Empresaria shares jumped by 6% in early deals to 155p.

Proactive news headlines...

Rainbow Rare Earths Ltd (LON:RBW) has hosted an inauguration ceremony for the Gakara Project. Speeches were delivered by His Excellency Mr Pierre Nkurunziza, President of the Republic of Burundi, Burundi's Minister for Mines and Energy, Come Manirakiza, and Rainbow's chief executive, Martin Eales.

Scotgold Resources Limited (LON:SGZ)  is to seek permission to consolidate its hsares on a 100-into-one basis.

Metal Tiger Plc (LON:MTR) has given details of nineteen potential exploration targets that have been identified in the T3 Dome area, of its Kalahari copper belt in Botswana. 

Sound Energy PLC (LON:SOU) has outlined its plans for the newly defined Anoual and Matarka exploration areas in the vicinity of its successful Tendrara gas project in eastern Morocco.

Deltex Medical Group plc (LON:DEMG) reported 7% revenue growth for half year, ended June 30, up to £2.9mln boosted as the “improving trends” seen last year continued into the present year.

Tissue Regenix PLC (LON:TRX) has splashed out US$30mln on Texas-based rival, Cellright Technologies,to catapult it to the front of  the growing US market for regenerative medicine and bone grafts. Antony Odell, Tissue’s chief executive, said CellRight has a synergistic regenerative technology focused on bone that will complement its own dCELL soft tissue platform. 

WideCells Group PLC’s (LON:WDC) stem cell insurance platform Cellplan has now gone live in the UK. The online facility initially will be for customers of tissue bank Biovault, but in the upcoming weeks WideCells intends to make CellPlan available to families that have stored stem cells in other facilities that meet the appropriate standards.

Gfinity Plc’s (LON:GFIN) recently-launched Elite Series is set to get worldwide exposure after the AIM-quoted firm signed a contract with Eleven Sports to broadcast the esports tournament across its various TV channels.

Specialist recruiter Empresaria Group plc (LON:EMR) has told investors it enjoyed a record first half of the year, buoyed by increased hiring activity in its home UK market. For the six months to 30 June, net fee income soared by 26% compared to the same period last year, which Empresaria said puts it on track to meet current full-year expectations.

Organic growth is combining well with acquisitions said Learning Technologies Group PLC (LON:LTG), which is seeing record revenues following its takeover of Netdimensions in March. The e-learning group has an annual turnover target of £50mln and seems well on track to hit that soon as first half sales rose to 63% to £20.8mln with the traditionally stronger second half to come.

 

6.55am ... FTSE 100 set to start in positive territory to cap good week

London’s blue chips are heading for a quiet end to what has been a good week for the market.

Financial spread bet firms expect early gains again for the FTSE 100, but they are predicted to be only very light.

The London market is set to rise by around five points from yesterday’s close of 7,487, itself a rise of 56 points.

There will be little impetus from the US or Asia as the Dow Jones Industrial Average closed 28 points lower at 21,611.

Retailers were under pressure along with Home Depot as online firm Amazon (NASDAQ:AMZN) agree a deal to sell Sears' home appliances on its online platform - which wiped $13bn off the value of Home Depot.

In Asia, the Nikkei in Tokyo was lower towards the close, Hong Kong made small gains while Shanghai was flat pretty much.

 

Headlines

Unilever ‘set to abandon dual listing’ – One of the biggest shareholders in Unilever has said that he expects the consumer goods giant to set out plans for a single unified company by the end of the year. (The Times)

Ineos threatens to sue National Trust so it can carry out fracking survey – Energy firm Ineos is threatening to take legal action against the National Trust so it can carry out a fracking survey on its land. (Independent)

Citigroup and Deutsche Bank give Frankfurt a Brexit boost – Frankfurt’s attempt to become the EU’s pre-eminent post-Brexit financial centre received another boost on Thursday as more details emerged of Deutsche Bank and Citigroup’s plans to beef up their operations in the German financial capital. (Financial Times)

TSB plans to unlock bank accounts with the blink of an eye – TSB is to introduce iris recognition as a way for customers to unlock its bank app and access their accounts, making it the first in Europe to use this form of biometric technology. (Guardian)

Elon Musk ‘gets verbal government approval’ for his futuristic Hyperloop plans in the US – Tesla boss Elon Musk has announced that his supersonic transport system Hyperloop has just got “verbal” government approval in the U.S. (City AM)

Taxify is taking on Uber and black cabs with launch of latest ride-hailing app – London looks set for a fresh battle on the roads as a new ride hailing startup sets its sights on the city, taking on Uber and the famous black taxis in the capital. (City AM)

 

Friday’s agenda

Interim Results

Acacia Mining PLC (LON:ACA), Capital & Counties Properties PLC (LON:CAPC), Pjsc Magnit Gdr 5 Gdrs Repr 1 Ord Reg S (LON:MGNT).

AGM / EGM

Lekoil (LON:LEK), KCOM Group PLC (LON:KCOM), Homeserve PLC (LON:HSV), Georgian Mining Corporation Ord Npv Di (LON:GEO)

Trading Statement

Vodafone Group PLC (LON:VOD), Euromoney Institutional Investor PLC (LON:ERM), Close Brothers Group PLC (LON:CBG)


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