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FTSE ends lower as Wall St adds to ex-divi stock blues

With around half-an-hour of trading to go in London, the FTSE100 index was almost 20 points lower at 7,282, the day’s worst levels, well below an earlier peak of 7,310.
Traders
Shares grounded ex-dividend
  • FTSE 100, FTSE 250 fall

  • Centrica stand out loser

  • Pound rises 0.3% against the US dollar to $1.2487

  • Sterling climbs 0.25% against the euro to 1.1824 euros

 

FTSE 100 shares ended lower on Thursday as mixed Wall Street compounded losses related to ex-dividend stocks and poor earnings in the utilities sector.

The blue-chip FTSE 100 ended down 0.4% at 7271. Top fallers were Easyjet (LON:EZJ) down 6.1% at 914.5p, Rio Tinto (LON:RIO) down 5.3% at 3418p, and HSBC (LON:HSBA) down 4% at 652.8p after trading began without the right to their latest dividend.

But the first meaty fall was the fourth-placed decliner, Centrica (LON:CAN), down 3.7% at 225.1p following its latest earnings results. The group reported a 4% rise in annual profits, but its British Gas domestic business saw profits fall 11%.

Alas, some strong results elsewhere were not enough to cancel out the Centrica news.

RSA Insurance (LON:RSA) was the second-biggest riser on the FTSE, up 4.9% to 605p after its full-year results beat forecasts. The insurer reported operating profits of £655mln, up 25% from the year before.

The recent rebound in commodity prices has helped to lift profits at Glencore (LON:GLEN). The commodities miner and trader said underlying earnings rose 18% last year to $10.3bn, and added that its net debt had fallen by 40% to $15.5bn by the end of 2016. Glencore shares closed up 1.7% at 331.35p and inside the top ten risers.

Shares in Barclays rose 2.5% to 241.09p after the bank reported a near trebling of full-year profits to £3.2bn.

The mid-cap FTSE 250 closed down 0.2% at 18,643 and led by Halfords (LON:HFD) down 5.2% to 338.7p as broker Peel Hunt downgraded its stance on the stock to 'sell' from 'hold' and cut the price target to 325p from was 350p.

In small-caps, the FTSE AIM 100 Index ended flat at 4360 and the FTSE AIM All-Share Index was flat at 909.

London market gainers were just 27% to 36% whose shares fell this session.


 

1600 GMT - FTSE 100 weak as US stocks make mixed start; Barclays, Centrica down after results

  • FTSE 100 drops 20 points

  • US stocks mixed early on

  • Barclays lower, but Lloyds continues its move higher

  • British Gas-owner Centrica weak

4pm … Near session lows …

The Footsie sunk to session lows in late afternoon trading as US stocks made mixed morning progress, with post-results falls in Barclays PLC (LON:BARC) and British Gas-owner Centrica PLC (LON:CNA) a drag in London.

With around half-an-hour of trading to go in London, the FTSE100 index was almost 20 points lower at 7,282, the day’s worst levels, well below an earlier peak of 7,310.

In New York, the Dow Jones managed to take on a modest 15 points first thing, on course for a 10th day of gains thanks to firmer oil prices, but both the broader S&P 500 and Nasdaq composite indices were weaker.

Investors were cautious after minutes on Wednesday evening from the US Federal Reserve’s meeting earlier this month showed central-bank policy makers are comfortable with raising rates “fairly soon.”

Craig Erlam, senior market analyst at Oanda, said: “The minutes from the Federal Reserve on Wednesday, which we were hoping would provide additional clarity on its interest rate expectations, instead displayed the uncertainty the central bank has about how to proceed, largely due to the unknown effects of what Donald Trump’s stimulus plans will have on the economy and inflation.

“In effect, the Fed is as much in limbo as investors are because markets have rallied strongly at the prospect of “phenomenal” tax cuts and major spending but as of yet, nothing has been delivered.”

He added: “The way markets are continuing to grind higher, it would appear investors are unwilling to go against the rally but at the same time, there’s little conviction in it either.”

12.00pm … Dull progress …

The FTSE 100 had eased seven points to 7,295 by midday with traders expecting little leadership from Wall Street when it opens for business later.

The Dow Jones is predicted by spread-betters to open 10 points higher – which is small beer when you consider the index closed at 20,775.60.

Germany’s overtaking of the UK as Europe’s fastest –growing major economy barely merited comment amid the electoral worries emanating from France and the Netherlands.

Barclays PLC (BARC) retreated from earlier gains after reporting a mixed set of 2016 results today.

But Lloyds Banking Group (LON:LLOY) enjoyed another positive session on a dull day for stock trading after it accompanied results Wednesday with news of a special dividend.

Goldman Sachs isn’t a fan of the stock, repeating its ‘sell’ recommendation amid worries about the mortgage book. Lloyds and its Halifax arm are responsible for one in four home loans here in the UK.

Counter-balancing Goldman’s negativity (and more reflective of City opinion), JP Morgan Cazenove, another big hitter, repeated its ‘overweight’ call on the stock and raised its share price target to 80p (from 75p). It reckons Lloyds is the “best placed” of the UK’s major High Street banks.

9.45am ... Treading water …

The FTSE 100 nudged into negative territory, dragged down by profit-taking in the mining sector and a handful of stocks going ex-dividend.

At 8.45am, the index of blue-chip shares was off 7 points at 7,296.

Leading the fallers was Easyjet (LON:EZJ), where new investors Thursday lost their entitlement to the last notified payout – a process called going ex-dividend.

Diageo (LON:DGE) and Rio Tinto (LON:RIO) were marked down for the same reason.

Among the losers also was British Gas owner Centrica (LON:CNA), whose results failed to inspire its City following.

The reverse was true for Barclays (LON:BARC) which followed Lloyds Banking Group (LON:LLOY) higher – rather than HSBC Holdings (LON:HSBA) – despite a mixed set of final results.

Shares in Treatt PLC (LON:TET)  soared 21% to 315.1p  after the flavour, fragrance and cosmetic ingredients supplier told investors it expects full-year profit before tax to “substantially exceed previous expectations”.

The bullish outlook comes as the group said it expects to see “substantial progress” when it reports its half-year results in May.

Proactive news headlines

StatPro Group PLC (LON:SOG) has paid £1.2mln to up its stake in South Africa-based software provider Infovest by 21.7% to 72.7%.

Gold mine developer Hummingbird Resources Ltd (LON:HUM) nudged higher after it appointed highly experienced Kevin Moxham as general manager at its Yanfolila gold project in Mali.  Shares rose 1% to 26.2p.

Oesophageal Doppler monitoring device maker Deltex Medical Group plc (LON:DEMG) has received confirmation of monitor orders worth more than £200,000. Shares rose 3% to 4p.

Asiamet Resources Limited (LON:ARS) has carried out analysis of historic data for the area around its BKM copper deposit in Indonesia, which points to the huge potential of the property.

At BKW there were multiple copper mineralised sheeted vein zones found within 2.5-square kilometres. There were also well three copper-in-soil anomalies that coincided with these vein zones. Shares rose 2% to 5p.

Ferrum Crescent Ltd (LON:FCR) has reported more good zinc grades from early stage development at work at its Toral project in Spain. It will now move on to a small shallow drilling programme to target mineralised zones within 200 metres of the surface to further prove up the potential. Shares dropped 2% to 0.186p.

6.45am ... Marginal gain expected ...

London’s FTSE 100 is expected to open slightly higher on Thursday as the market braces for a torrent of blue chip financials.

Barclays Plc (LON:BARC), British American Tobacco (LON:BA.), BAE Systems Plc (LON:BA.), Centrica Plc (LON:CNA) and RSA Insurance Plc (LON:RSA) are all among the names in the City diary.

“The market will want to see if better than expected earnings can trigger a fresh record high in the FTSE 100, 7,354 – the high from 16th Jan – is the level to beat,” says Kathleen Brooks, analyst at City Index.

Elsewhere, trading in New York was mixed by Wednesday’s close. The Dow Jones edged 32 points, 0.16%, higher to end the session at 20,775. The S&P 500 and Nasdaq, meanwhile, were both in negative territory losing 0.11% and 0.09% to 2,362 and 5,860 respectively.

In Asia, equity benchmarks were also lit in red. Japan’s Nikkei was down slightly, 0.04%, at 19,371 while Hong Kong’s Hang Seng was off 0.34% changing hands at 24,115. The Shanghai Composite was 0.45% lower at 3,246.

Australia’s ASX 200 was down 0.35% at 5,784.

Here in London, IG Markets sees the FTSE 100 up 3.2 points, calling the blue chip benchmark at 7,279 to 7,283.

Significant announcements expected

Finals: BAE Systems PLC (LON:BA.), Barclays PLC (LON:BARC), British American Tobacco plc (LON:BATS), Glencore PLC (LON:GELN), Kaz Minerals PLC (LON:KAZ), Morgan Advanced Materials PLC (LON:MGAM), Morgan Sindall Group PLC (LON:MGNS), Playtech PLC (LON:PTEC), Relx PLC (LON:REL), Rathbone Brothers PLC (LON:RAT), Rentokil Initial PLC (LON:RTO), RSA Insurance Group PLC (LON:RSA), Howden Joinery Group PLC (LON:HWDN)

Interims: Genus PLC (LON:GNS), Monitise Plc (LON:MONI), Wilmington PLC (LON:WIL)

City headlines

Maintaining London's euro-clearing crown is vital to EU as well as the UK - City A.M.

Peugeot lifts earnings goal after record year - Reuters

New digital banks turn to celebrities to boost sales - Financial Times

Humbled Unilever aims to show shareholders it values their loyalty - The Guardian

BAE Systems says CEO King will hand over to Woodburn on July 1 – Reuters


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