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Market Wrap - Midday

FTSE falls on commodity weakness

03 May 2017 11:41

Miners followed commodity prices lower this morning, while supermarkets were weaker as Sainsbury (SBRY) warned of an uncertain outlook thanks to cost price pressures.

Antofagasta (ANTO) and Glencore (GLEN) were the biggest fallers in the mining sector as they both declined over 3%.

In the UK, Markit recorded the sharpest rise in total construction output so far in 2017 as the purchasing managers' index ticked higher to 53.1 in April, up from 52.2 in March.

Overall shop prices deflated by 0.5% from a 0.8% fall in March, which was the shallowest deflation rate since November 2013 according to the British Retail Consortium.

Brent crude was up 0.8% to $51 per barrel, while gold nudged 0.2% to $1,252 per ounce.

Copper suffered a bigger decline of 2.2% to $5,665 per tonne.

OVERSEAS MARKETS

US equities were relatively stable ahead of the Federal Reserve's interest rate meeting, which was expected to hold rates steady, although it may provide hints about their future direction.

In Asia, markets in Japan and Hong Kong closed 0.7% and 0.3% higher on Wednesday, while China's SSE Composite fell 0.3%.

FTSE 100 RISERS AND FALLERS

UK supermarket Sainsbury revealed a fall in its full year pre-tax profit to £503m, down from £548m. It said the market remained competitive and the impact of cost price pressures was uncertain, prompting investors to mark the stock 4.5% lower to 266.9p.

ITV (ITV) suffered share price weakness as investors were disappointed that CEO Adam Crozier was stepping down from the board and his role. Ian Griffiths will step up to a newly created combined role of chief operating officer and group finance director.

Gambling business Paddy Power Betfair (PPB) was down on its luck as it revealed gross win margins were weak in April as recent high profile events favoured customers.

Cigarette seller Imperial Brands (IMB) unveiled solid first-half results and reported that its additional investment programme on track. On a reported basis, revenue rose to £14.3bn, from £12.8bn, but operating profits of £902m were down from £1bn.

Car insurer Direct Line (DLG) was broadly unmoved despite gross written premium for ongoing operations rising by 4.2% in the first quarter.

Business software firm Sage (SGE) posted a statutory first half pre-tax profit of £180m, up 41% year-on-year, on healthy rise in subscriptions.

FTSE 250 RISERS AND FALLERS

One of the UK's leading construction groups Galliford Try (GFRD) warned non-recurring costs could hit its financials. The market overlooked a strong trading performance for the period from January to May as shares in Galliford fell 9.2% to £13.28.

Budget-friendly pub chain JD Wetherspoon (JDW) was up 3.6% to £10.47 as like-for-like sales rose 4% in the 13 weeks to 23 April.

SMALL CAP RISERS AND FALLERS

A pre-tax loss of £1.8m at Osirium Technologies (OSI), nearly doubling year-on-year, dragged the stock 12.4% lower.

A management re-shuffle at Porta Communications (PTCM) triggered a 14% rally to 2.9p. John Foley became non-executive chairman after executive chairman David Wright decided to retire.

A distribution deal with ASOS for Skinny Tan self-tanning products pushed Innovaderma (IDP) into the spotlight. Management was upbeat about its outlook and reported that April achieved its highest-ever monthly revenue. Shares in the business brightened 14.5% to 230.8p.

Disruptions in drilling at Premier African Minerals' (PREM) Zulu lithium and tantalum project led to subdued investor interest in the stock which slumped 12%.

Story provided by StockMarketWire.com

Related Company: SBRY

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