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Market Wrap - Midday

Upbeat retail sales data boosts pound and helps push FTSE lower

18 May 2017 12:02

Stronger retail sales data in the UK gave the pound a boost against the dollar to over $1.30, although this acted as a headwind for the FTSE 100.

The blue-chip index was 1.4% lower at 7,400 as the strong pound put pressure on the value of overseas earnings and speculation over the future of the Trump presidency ramped up.

In April, good weather helped to increased UK retail sales, which were up 2.3% compared with March.

Brent crude oil plummeted 1.7% to $51.31 per barrel and copper cheapened 2% to $5,489 per tonne.

OVERSEAS MARKETS

On Thursday, Japan's Nikkei 225 closed 1.3% lower despite data revealing that the country's economy grew by 2.2% in the first quarter of 2017.

Concerns over a potential impeachment of US President Donald Trump and that he might fail to push through reforms caused a panic in Asian markets, with Japan taking the biggest hit.

FTSE 100 RISERS AND FALLERS

Equipment rental group Ashtead (AHT) dropped by 5% to £14.83 thanks to concerns over whether an infrastructure boost would actually materialise in the US.

Shares in international investor 3i Group (III) were down 1.8% to 825.5p despite its total return increasing 93% to £1.59bn in the year to the end of March.

Chairman of Hargreaves Lansdown (HL.) Mike Evans announced he would stand down after a successor was found. His departure was overshadowed a 10% rise in assets under administration to £77bn and dragged the stock 1.8% lower to £13.23.

Commercial property business Land Securities (LAND) revealed underwhelming annual results as its full year pre-tax profit fell from £1.34bn a year ago to £112m. Investors marked the shares 2.3% down to £10.91.

Royal Mail (RMG) was one of the few blue-chips to rise after it boosted its full year pre-tax profit and dividend, prompting the stock to gain 1.8% to 438.6p.

Luxury trench coat seller Burberry (BRBY) sparked 2.6% higher despite a decline in its full year sales and pre-tax profits.

Investors overlooked lower profit at National Grid (NG.) as it remained static at £10.54. The utility giant announced its pre-tax profit fell from £3bn to £2.9bn.

FTSE 250 RISERS AND FALLERS

Cinema operator Cineworld (CINE) reported sales growth of 21.3% in the first five months of 2017, although this failed to impress the market as the stock nudged lower to 721.5p.

Travel agent Thomas Cook (TCG) narrowed its losses in the first half of its financial year. It also boosted sales and expected full year earnings to meet expectations.

Berendsen (BRSN) claimed a takeover offer from Elis 'very significantly' undervalued the company and its prospects. The textile maintenance services business said it did not see the basis for further discussions, causing the shares to soar 20% to £10.36.

Sausage roll seller Greggs (GRG) was flat at £10.74 as total sales for the 19 weeks to 13 May increased 7.5%.

Pub operator Marston's (MARS) posted a 3% increase in its underlying first half pre-tax profit to £36.7m and agreed to acquire the Charles Wells brewing business, as well as seven other pubs.

Balfour Beatty (BBY) traded in line with expectations and continued to make good progress on the second phase of its Build to Last transformation programme.

A negative broker note from Morgan Stanley pushed Bodycote (BOY) 4.9% lower to 749.7p.

SMALL CAP RISERS AND FALLERS

Harry Potter books publisher Bloomsbury (BMY) highlighted that full year pre-tax profit declined from £13m to £12m, above market expectations. Shares in the publisher were up 0.8% to 178p.

It continued to be a difficult week for Proxama (PROX) after the CEO of the digital payments division, Mike Woods, said he would step down. This was part of the company's restructuring of the division to significantly reduce its cost base.

The stock dropped a further 10% after a quarter of the company's value was wiped off on Wednesday following the restructuring announcement.

Video security systems designer Indigovision (IND) said in the first 19 weeks of 2017 overall sales were ahead compared to the same period last year. It expected 2017 would continue to improve as the stock gained 16.3% to 210p.

Safestyle UK (SFE) warned its first half profit would be lower than anticipated. Shares in the windows retailer were down 9.2% as investors were not reassured by the company's reassurance it would deliver full year results in line with expectations.

Story provided by StockMarketWire.com

Related Company: AHT

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