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Market Wrap - Close

FTSE sours to end lower on house builders, insurers

05 February 2016 17:04

London shares retreated into negative territory as Wall St opened for the worse following an unexpected widening of the US trade deficit and disappointing non-farm payrolls data. UK house builders, insurers and utilities bore the brunt of the resultant sour sentiment.

FTSE 100 closed down 50.7 points, or 0.86%, to 5848.06. FTSE 250 ended 84.45 lower, or 0.52%, to 16,002.3. At 4.41pm, WTI crude was at USD31.67/bbl and Brent was at USD34.58/bbl. Gold fell to USD1154/oz. Europe was moderately lower, or worse.

Berkeley Group (BKG) led house builders with a fall of 4.96% to 3391p, traced by Persimmon (PSN), off 3.63% to 1965p, and then Taylor Wimpey (TW.), off 3.33% to 182.8p. Insurers were queuing behind Aviva (AV.), down 2.78% to 431.65p, and Prudential (PRU), off 2.73% to 1228p.

US macro-sensitive utilities fell after United Utilities (UU.), down 2.22% to 923p, and then Severn Trent (SVT), off 1.88% to 2140p. Among the roughly 75 blue chips southbound were multiple pharmas, commercial property, airlines, consumer goods and retail outfits. Fifty stocks fell by 1% or more.

A storming turn higher by Anglo American (AAL), up 10.68% to 363.35p, and then Antofagasta (ANTO), rising 3.72% to 446.3p, provided only mild offset to the overall thrust. Supermarkets and oilies rose. Tesco (TSCO) added 2.78% to 174.63p and Shell (RDSA) firmed 0.62% to 1535p.

BG (BG.), up 0.24% to 1060p, saw its FY results hurt by lower commodity prices. Revenue and other operating income fell 16% to USD16.42bn.


One Media (OMIP), down 15.38% to 5.5p, expects to record a fall of about 13% in turnover and 30% in pretax profits for Fy 2015.

Frontier Resources (FRI), up 33.33% to 0.08p, has conditionally issued 4.75bn shares at 0.03p each to raise GBP1.4m. Proceeds will be used to provide working capital and to support the investment in new projects.

Bahamas Petroleum (BPC) jumped 29.09% to 2.13p as welcome new legislation on the islands provide an upgraded and modernised framework for petroleum exploration operations and are set to guide and govern the next phase of safe and responsible hydrocarbon exploration.

Independent Oil and Gas (IOG), up 14.58% to 6.88p, has entered into a conditional agreement with London Oil and Gas for the provision of a secured convertible loan facility for up to GBP10m.


Stateside, the US trade deficit widened to USD43.4bn in December, up USD1.1bn from a revised USD42.2bn in November and versus an expected deficit of USD42.8bn, US Census Bureau and US Bureau of Economic Analysis said. December exports were USD181.5bn. Imports were USD224.9bn.

US non-farm payroll employment rose 151,000 in January, versus an expected 192,000, with gains in several industries led by retail trade, food services and drinking places, health care, and manufacturing, the US Bureau of Labor Statistics said.

The US unemployment rate fell to 4.9% in January, from 5.0% in December, US Bureau of Labor Statistics said. Meantime, US average hourly earnings for all employees on private non-farm payrolls rose 12 cents to USD25.39 in January, the bureau said.

In Europe, German factory orders fell 0.7% in December, much worse than market expectations for a slip of 0.4% and from a 1.5% rise in November. France's trade balance for December printed at -3.94bn euros, from -4.6bn euros previously and against forecasts for -4.5bn euros.


Wishbone Gold (WSBN) climbed 9.62% to 0.29p as it confirmed the acquisition of Precious Metals International and its subsidiary Black Sand in an all share deal.

Central Rand Gold (CRND) fell 13.16% to 4.13p on raising GBP1.22m at 3.5p each. ImmuPharma (IMM), down 12.07% to 25.5p, has announced a proposed conditional fund raise of not less than GBP7.5m.

Just Eat (JE.) fattened 5.4% to 379.45p after acquiring four takeaway businesses in Spain, Italy, Brazil and Mexico for for 125m euros. It sees the acquisition to be EPS accretive in 2016 and to add GBP5m to 2017 EBITDA, and GBP10m to EBITDA in 2018.

Velocys (VLS), up 6.35% to 39.88p, said ENVIA Energy's EPC contractor has signed the final major contract for ENVIA's Oklahoma City GTL plant, which is to be located adjacent to Waste Management's East Oak landfill site.

Greka Drilling (GDL), down 10.57% to 3.51p, drilled a total of 76,690m in 2015, up 31% on the year. It drilled 62 wells, 53 in China and nine in India, from 45 in 2014.

Premier Farnell (PFL) leaped 7.47% to 106.13p as it secured the USD224.2m sale of US fire safety equipment business Akron Brass.

Faroe Petroleum (FPM), up 5.33% to 56.88p, said total average economic production for 2015 was at the upper end of guidance at about 10,530 boepd, of which about 58% was liquids and 42% gas.

On The Beach (OTB) fell 1.43% to 300.63p despite reporting year-on-year UK revenue growth of 26% in the four months to Jan. 31 January in a period of significant volatility caused by the recent terror attacks.

Pennant Int'l (PEN), up 3.53% to 44p, subsidiary Pennant Training Systems Ltd has been awarded a new landmark contract with one of the world's leading aerospace and defence contractors.

Other stocks in the news included Booker (BOK), Porta Communications (PTCM), OptiBiotix Health (OPTI), Grainger (GRI), Stride Gaming (STR), Teathers (TEA), Halma (HLMA), Ace Liberty and Stone (ALSP), Shaftesbury (SHB), Genel Energy (GENL), Town Centre Securities (TCSC) and Commercial International Bank (Egypt) (CBKD).

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