FTSE 100 stocks came close to breaking south of 7200 on Thursday with Royal Mail (LON:RMG) delivering the biggest falls as the pound strengthened.
The FTSE 100 closed down 0.5% at 7208. Royal Mail shed 6% to 422.5p while utility SSE plc (LON:SSE), lost 2.7% to 1515p as the big dividend payer is trading in ex-dividend form today.
The mid-cap FTSE 250 fell by 0.5% as well, to 18,223. It was led by Pets at Home Group PLC (LON:PETS) down 10.6% to 213.2p after it posted a rise in group revenue for the third quarter as it said the profit outlook for the year remains in line with expectations.
For the 12 weeks to 5 January, group revenue was up 4.4% to £203.7mln, with group like-for-like revenue growth of 0.1%, reflecting continued strong growth in veterinary services, offset by more subdued trading across the Merchandise business. Clearly investors were hoping for more.
The FTSE AIM 100 Index was down 0.2% at 4163 and the FTSE AIM All-Share Index down 0.2% to 872.
London losers amounted to 36% of the bourse and gainers to 28%.
1336 GMT - FTSE 100 heads lower, with Royal Mail leading the retreat
- FTSE 100 down 37 points
- Property stocks wilt after British Land update
- Pound rises
It seems you have can have a strong pound, or a rising equity market, but not both.
The FTSE 100 was off 37 points at 7,211, with Royal Mail Group PLC (LON:RMG), down 5.4%, leading the retreat.
Utility SSE plc (LON:SSE), down 2.5%, was another big faller, as the big dividend payer is trading in ex-dividend form today.
The third quarter trading statement from British Land Company (LON:BLND) did no favours to the real estate investment trust sector.
British Land itself was down 2.9%, while Hammerson PLC (LON:HMSO) shed 2.5% and Land Securities Group PLC (LON:LAND) fell 2.1%.
An upgrade from ‘sell’ to ‘hold’ by Deutsche Bank on struggling publisher Pearson PLC (LON:PSON) appeared to hold more weight than Natixis shifting from ‘buy’ to ‘neutral’ and Macquarie moving from ‘outperform’ to ‘neutral’, not to mention Barclays Capital slashing its price target from 740p to 550p.
Pearson shares rose 2.9% to 590p, about in line with Deutsche’s new price target, which has been cut from 730p.
11.18 ... FTSE 100 down 52
The FTSE 100 fell 52 points to 7,196.05, dragged lower by the stronger pound which has priced a modicum more reality into the export-led stocks.
It puts the index of blue-chip shares on course for its worst week since the election of Donald Trump.
And in fact there was an element of time marking this morning ahead of the Trump inauguration Friday and the latest update from the European Central Bank this afternoon.
The pound, meanwhile, edged back above US$1.23 against the greenback.
Here in the UK the economic news of the day was from the Royal Institution of Chartered Surveyors and its monthly update, which revealed there was some weakness in the housing market in December.
9am..Dogs, cats and posties
The dead cats aren’t bouncing yet. Shares in publisher Pearson PLC (LON:PSON) were flat as a pancake after Wednesday’s 30% wipe-out.
Normally, after such a precipitous tumble courageous investors emerge from the woodwork to buy stock, deeming it over-sold.
The consequent rise is called a ‘dead cat bounce’; the joke being that when thrown from a window a dead cat doesn’t bounce it is simply dead and lifeless.
In other words the upward movement is a temporary phenomenon. So beware dead cats.
Sermon over, the FTSE 100 made a rather sluggish start to proceedings as it drifted 10 points to 7,237.34 in the first 45 minutes of trading.
Royal Mail Group PLC (LON:RMG) – whose press officers are avid followers of Proactive - was the day’s leading loser after a rather lacklustre update on trading. The shares fell 4% after it said revenues from its UK operation had moved into reverse gear.
Leading the risers on the Footsie and up 2% was Burberry Group PLC (LON:BRBY) as investors continued to reward the fashion giant’s better than expected Christmas performance – a day on from the figures.
6.45am...positive start seen
London’s FTSE 100 is tipped to start Thursday positively, even if there’s caution that there are presently so many unknowns in the global markets.
Pre-Trump anxiety is seemingly unnerving currency markets, while equity investors are cognisant of how the new presidency may unsettle the US sentiments for monetary policy.
“US markets continue to trade cautiously below their all-time highs as uncertainty about the new administration’s view of the strength of the US dollar clash with the priorities of the Federal Reserve who still seem quite keen to continuing normalising monetary policy, if Fed Chief Janet Yellen’s comments last night are anything to go by,” explains Michael Hewson, analyst at CMC Markets.
“Her warnings about the risks of waiting too long to raise rates further caused the US dollar to continue its recovery from its sharp Tuesday sell-off, with the pound the biggest casualty as it gave back some of its Tuesday Brexit speech gains, raising the prospect that the rally may merely have been a dead cat bounce.”
In New York on Wednesday the Dow Jones ended trading down 0.11% at 19,804, though the S&P 500 gained 0.18% to close at 2,271. The Nasdaq meanwhile finished the session up 0.31% at 5,555.
Markets in Asia were mixed. Japan’s Nikkei climbed 177 points, 0.9%, trading at 19,072, whereas Hong Kong’s Hang Seng was on the back foot, down 118 points or 0.5% at 22,981 and the Shanghai Composite dipped 0.44% to 3,099.
Australia’s ASX 200 was in positive territory, up 0.24% to 4,692.
Oil prices eased somewhat, with Brent down about 1.8% changing hands at US$54.44 and WTI futures priced at US$51.50 per barrel.
Here in London, spread betting and CFD provider IG Markets sees the FTSE 100 around 11 points higher about an hour before trading gets underway, calling the blue chip benchmark at 7,255 to 7,259.