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Market Wrap - Midday

FTSE down on dollar's drop as 'Trump effect' loses shine

27 March 2017 12:00

London equities remained under steady downward pressure to noon as traders reacted to a weaker US dollar -- after US President Donald Trump failed to get his healthcare bill through Congress on Friday -- in a week that will see the UK formally activate Brexit talks.

At 11.42am, sterling was up 0.95% to $1.2592, while safe-haven gold rose 0.69% to $1260.30/oz. Industrial metal copper was down 1.75% to 258.5p. WTI and Brent crude were firmly lower, the former by 0.85% to $47.56/bbl and the latter by 0.61% to $50.49/bbl.

Global stock markets have been buoyed by the 'Trump effect' in recent months, with the FTSE 100 benefiting from sterling's Brexit weakness against the US dollar. Close to midday, the FTSE 100 was down 54.41 points, or 0.74%, to 7282.41. The FTSE 250 was down 70.21, or 0.37%, to 18,910.2.

Babcock International (BAB) guided blue chips lower on stating the Cavendish Fluor Partnership (CFP), in which it has a 65% stake, had come to a mutual agreement with the UK's Nuclear Decommissioning Authority to bring to an end the Magnox decommissioning contract at the end of August 2019, having operated the contract for a full five years.

It was followed down by mining heavyweights Glencore (GLEN), down 3.57% to 308.33p, BHP Billiton (BLT), down 3.03% to 1207.25p, and Anglo American (AAL), down 2.85% to 1216.75p. More followed. However, gold-sensitive Randgold (RRS) and Fresnillo (FRES) made firm gains.

Oil majors BP (BP.) and Shell (RDSA) were down by less than 1%. Overall there were more 70 blue chips on the back foot, with banks following Barclays (BARC), down 1.9% to 222.63p, and insurers chasing Prudential (PRU), down 1.26% to 1699.25p.

Commercial property, house builders, and supermarkets all figured in the losers' list, although some in these sectors made mild to moderate gains. Several pharmas were notable among the risers after Trump's Congress failure. Shire (SHP), up 0.36% to 4693.25p, led the sector.

In the news, BT (BT.A), down 1.19% to 321.78p, has been fined more than £42m following an Ofcom's investigation into the historical use of 'deemed consent' by the group's Openreach business.

Old Mutual (OML), down 1.53% to 219.1p, has agreed to sell a 24.95% shareholding in OM Asset Management (OMAM) to HNA Capital US in a two-step transaction for gross cash consideration of about $446m.

Meantime, Prime Minister Theresa May is expected to activate formal Brexit talks with the EU on Mar. 29. Nevertheless, the market is bracing itself for Brexit-linked volatility during the up to two-year negotations.

BIGGER MOVERS

SpaceandPeople (SAL), up 48.57% to 26p, has posted a FY pretax loss of £225,000, down from a profit of £1.04m a year ago, in what it said was a challenging year, but importantly said it expected a return to sustainable profitability in 2017.

Falcon Acquisitions Ltd's (FAL), up 28.07% to 18.25p, shares have started trading on the London Stock Exchange's Main Market and the company has raised £4m through a placing to to support its rapid growth strategy.

Eqtec (EQT), down 21.74% to 4.5p, said H1 operating losses at the company, formerly REACT Energy, rose to €450,143, up from €117,693 last time. Revenues fell to €105,464, from €131,031, and the pretax loss of €748,003, up from €411,794.

ECONOMIC NEWS

Eurozone's M3 money supply was 4.7% in February, which was below the downwardly revised 4.8% previous and expected reading.

Germany's Ifo business confidence improved in March. The institute's index improved to 112.3, from 111.1 in February. A print of 111.2 was expected by the market.

LONDON HIGHLIGHTS

Exova (EXO), up 14.11% to 249.75p, has noted recent speculation and confirmed that it has received proposals from Element Materials Technology, Jacobs Holding AG and PAI Partners SAS regarding a possible cash offer for the company.

Premier African Minerals Ltd (PREM), down 11.54% to 0.58p, has successfully raised £2.01m in a 34% oversubscribed offer at 0.5p a share.

Beowulf Mining (BEM), down 2.53% to 9.63p, has completed an intense five week drilling programme at its Aitolampi prospect in Finland. Gama Aviation (GMAA), down 7.4% toi 206.5p, revenues rose 12.6% to a record $432.4m in the year to the end of December.

Quardrise Fuels (QFI), up 5.46% to 8.3p, has marginally widened its H1 pretax loss to £2.43m, from £2.35m. Revenue was £68,000, from £2000.

Sirius Petroleum (SRSP), down 1.2% to 0.83p, has executed a contract with Polaris Consulting Company, which has been engaged to undertake a Seabed Survey around the Ororo field licence area.

Circle Holdings (CIRC), up 1.18% to 21.88p, has won a five-year contract with Greenwich Clinical Commissioning Group for the management and provision of musculoskeletal services in the borough.

GAN (GAN), up 3.42% to 30.25p, has launched Simulated Gaming for one of the longest-standing Native American casino operators in America at the Turning Stone Resort Casino property. Turning Stone Resort Casino is a major destination for residents of central New York State and has been operational since 1993.

Other stocks in the news included Galileo Resources (GLR), Inspired Energy (INSE), DP Poland (DPP), YouGov (YOU), Greencoat UK Wind (UKW), Wood Group (WG.), Amerisur (AMER), IMImobile (IMO), Trading Emissions (TRE) and Botswana Diamonds (BOD). Story provided by StockMarketWire.com

Related Company: BAB

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