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Market Wrap - Market Open

FTSE sours on financials ahead of Article 50 ruling

23 January 2017 08:53

London shares opened on a sour note as markets resumed after Donald Trump's inauguration as US president on Friday, with jitters closer to home centring on the Brexit, sterling and the UK economy.

Investors are already looking ahead to a UK Supreme Court ruling due Tuesday on royal prerogative and triggering Article 50.

Financials were prominent among blue-chip fallers. Among insurers, Admiral (ADM) fell 2.31% to 1693p, while Prudential (PRU) lost 1.15% to 1530.75p. In banking, Barclays (BARC) shed 1.91% to 223.05p, while RBS (RBS) lost 1.86% to 216.8p. More insurers and banks followed.

In the news, Paddy Power Betfair (PPB), down 1.87% to 8512.5p, sees its FY underlying EBITDA around the mid-point of the previously guided range of £390m-£405m, notwithstanding worse than expected gross win margins in November and December.

Oil majors were also notable fallers. BP (BP) ebbed 1.35% to 491.6p, while Shell (RDSA) faded 0.93% to 2202.25p. Also softening were several blue-chip miners, but others enjoyed minor gains. US rates-sensitive utilities were broadly lower, too, as were pharmas.

Not long after the open, FTSE 100 was down 64.04 points, or 0.89%, to 7134.4, while FTSE 250 was down 21, or 0.12, or 18,129.8. At 8.40am, WTI crude was up 2.04% to $52.42/bbl and Brent was down 0.49% to $55.22/bbl. Gold rose 0.64% to $1212.6/oz, with silver and copper also up.

Top-100 index fallers numbered about 76, with risers totalling about 24. Atop the latter pack was Capita (CPI), ahead 3.02% to 529p, chased by metals burrowers Antofagasta (ANTO), up 2.82% to 783.5p, and Fresnillo (FRES), ahead 1.71% to 1426p.

Also notably up were house builders, commercial property and airlines. Land Securities (LAND), up 0.51% to 989.5p, has confirmed that it sold The Cornerhouse, Nottingham, for £65m to Orchard Street Investment Management.

BIGGER MOVERS

Red Rock Resources (RRR) rose 20.69% to 0.88p as Jupiter Mines, an Australian unlisted public company in which it owns 27.3m shares, gave more details of its planned $55m distribution to shareholders. It also updated on the sale of certain assets, including American Gold Mines Ltd.

Edenville Energy (EDL) firmed 20% to 0.93p has established a strategic partnership with Sinohydro Corporation of China in relation to the Rukwa Coal to Power Project. Separately, Edenville updated on the issue of 44.5m new shares in lieu of consultancy fees.

Braemar Shipping Services (BMS), down 19.01% to 237.5p, has lowered its forecast for underlying operating profit before interest, acquisition related costs and tax for the year ended 28 February to £3.0m-£3.5m.

LONDON HIGHLIGHTS

Proxama (PROX), up 15.38% to 0.38p, confirms a joint agreement with Nasdaq-quoted CPI Card Group, a specialist in financial and EMV chip card production and related services.

Essentra (ESNT), down 10.06% to 398.15p, expects adjusted operating profit to be at, or modestly below, the bottom end of the company's previous guidance of £137m-£142m.

Flowtech FLuidpower (FLO) fell 9.77% to 121.13p as it said that against difficult trading conditions it had delivered a solid performance. While group revenue was up 19.9%, it noted some margin contraction in H2. Underlying FY pretax profit would be £7.0m-£7.2m.

Lamprell (LAM), down 7.9% to 93.25p, has welcomed recent change in oil and gas market sentiment but believes 2017 will prove a particularly cautious environment and will continue to maintain tight control over expenditure.

Thalassa (THAL), up 6.96% to 61.5p, expects its FY 2016 profit will beat market views. It estimated Thalassa Group would report revenue of about $14.0m and pretax profit (excluding consolidation of the holding in The Local Shopping REIT plc using the equity method) of about $2.2m.

Hochschild Mining (HOC), up 4.34% to 235.6p, is set to resume operations at its Pallancata mine in Peru after resolving a dispute with the local community. Operations were stopped last month due to a road blockade by community members.

LightwaveRF (LWRF), down 3.45% to 14p, said FY revenues fell to £1.44m, from £2.10m in 2015, having been held back as distribution was further re-organised and developed.

Safestyle UK (SFE), down 3.26% to 300.63p, notes strong trading in 2016 with another year of record turnover, but adds that, as expected, its H2 produced slower growth than in H1 due to more challenging comparatives.

Other stocks in the news included Serabi Gold (SRB), Petra Diamonds (PDL), Sports Direct International (SPD), Spire Healthcare (SPI), Polymetal International (POLY), Walker Greenbank (WGB), Restore (RST), Belvoir Lettings (BLV), Alliance Pharma (APH), HICL Infrastructure Company (HICL) and Gunsynd (GUN).

Story provided by StockMarketWire.com

Related Company: PPB

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