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Market Wrap - Midday

Potential regulatory rejig fuels rally in financial stocks

03 February 2017 11:55

Financial stocks rallied on reports that US president Donald Trump would take steps to dismantle regulations brought in to prevent another financial crisis.

Barclays (BARC) and Royal Bank of Scotland (RBS) gained 2.3% and 1.6% respectively.

Retirement income provider Prudential (PRU) was 1.7% higher, while Lloyds (LLOY) made a smaller jump of 1.2%.

Gains in the financial sector outweighed losses among miners as China raised short-term interest rates and there was disappointing manufacturing data in a new survey.

The net effect is a small gain in the FTSE 100 index, up 0.5% to 7,180.

West Texas Intermediate and Brent crude oil were 0.3% higher to $53.73 and $56.76 per barrel, respectively.

Gold slid in the other direction to $1,212 per ounce and copper cheapened 1.2% to $5,842 per tonne.

In the US, the Dow Jones and S&P 500 closed flat on Thursday ahead of non-farm payroll data, which suggests the future direction of interest rates.

Fast food chain McDonald's and pharma giant Merck were among the top risers on the Dow Jones, while Walt Disney and technology colossus Microsoft were in the bottom five.

Overnight, Asian equities failed to gain positive momentum as Japan's Nikkei 225 was flat at 18,918 on a stronger yen.

FTSE 250 RISERS AND FALLERS

Life insurer Beazley (BEZ) reassured the market after CEO Andrew Horton reported a good performance 'across the board' for 2016. It generated taxable profits of $293.2m compared to $284m in 2015, despite challenging underwriting conditions in its business.

Boiler protection specialists Homeserve (HSV) bought a 40% stake in website Checkatrade, which allows people to find plumbers and electricians. The company also made a similar investment its Spanish equivalent service called Habitissimo.

SMALL CAP RISERS AND FALLERS

Mobile payment company Zamano (ZMNO) disappointed investors as regulatory changes were likely to hit cash flow. The small cap decided to wind down its business lines to protect cash to return to its shareholders, although this failed to stop the stock crashing by 16.8% to 3.9p.

3D printing group Haydale Graphene (HAYD) warned full year sales would fall short of market expectations. Commercial sales from its deal with chemicals giant Huntsman were delayed, overshadowing a £3.3m strategic investment in Haydale by investment firm Everpower for a 9.9% stake.

Newspaper publisher Johnston Press (JPR) rebounded from post-Brexit vote blues and said 2016 results would be in line with forecasts. Last summer, the group struggled with difficult trading as a result of volatility following the EU referendum. Fourth quarter trading improved as revenues nudged 1% higher year-on-year, which was driven by a strong performance from the 'i' newspaper.

Story provided by StockMarketWire.com

Related Company: BEZ

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