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Market Wrap - Midday

Banking sector provides support to FTSE 100

23 May 2017 11:59

Banks were among the top risers on the FTSE 100 as Royal Bank of Scotland (RBS) and Lloyds (LLOY) were up 1.9% and 0.6% respectively.

The blue chip index traded 0.2% higher at 7,509 with added support from insurance and utility stocks.

Brent crude oil slipped 0.8% to $53.44 per barrel. Gold was flat at $1,261 per ounce and copper cheapened 0.5% to $5,688 per tonne.

OVERSEAS MARKETS

Last night on Wall Street, US stocks performed strongly thanks in part to a $110bn arms deal between the US and Saudi Arabia which prompted a rally in defence firms.

Private equity manager Blackstone jumped by 6.7% on plans for a $100bn infrastructure fund, with partners including a Saudi Arabian wealth fund.

FTSE 100 RISERS AND FALLERS

On the UK market on Tuesday, shares in water company Severn Trent (SVT) nudged 1.5% up to £24.84 after reporting a rise in pre-tax profit from £302.9m to £336.1m.

Miner Fresnillo (FRES) announced it was well positioned to optimise its performance and deliver long-term value for shareholders, but this failed to ignite the shares at £16.03.

FTSE 250 RISERS AND FALLERS

Frankie & Benny's owner Restaurant Group (RTN) tumbled 6% to 316.5p as broker UBS downgraded it to 'sell'. The analyst was concerned about the challenging turnaround and whether price cuts would be effective.

Emergency services provider Homeserve (HSV) was the best performing mid-cap as it benefitted from strong momentum. Management reported a record performance in North America in the year to the end of March and a 20% rise in operating profit to £104.7m. Shares in the firm rallied 11.9% to 785.5p.

Healthcare packaging business UDG Healthcare (UDG) boosted its full-year earnings per share guidance from 13% to 16%. This excited investors as the stock jumped 4% to 797p.

Elsewhere in the healthcare sector, Syncona (SYNC) reported its portfolio company Blue Earth Diagnostics received approval of its product Axumin by the European Commission. The stock received a welcome boost of 4.6% to 160p.

Sandwiches and salads seller Greencore's (GNC) half year results pleased the market with the rapid growth of its UK food-to-go business and reiteration of full year earnings guidance, triggering an 8% rise to 245.8p.

AVEVA (AVV) disappointed the market after it saying it was uncertain when the oil and gas market would recover, prompting a 3.2% drop in the stock to £19.77.

SMALL CAP RISERS AND FALLERS

Regal Petroleum (RPT) gained 19.7% to 3.7p thanks to initial testing at its MEX-109 well, which revealed production of 85,000 cubic meters per day of gas. The company said it planned to hook the well up to the gas processing facility to start production testing.

Software firm EG Solutions (EGS) was marked 19% higher to 78p as it continued to grab market share through its direct sales strategy, as well as distribution using in-house resources and global partners.

Sausages supplier Cranswick (CWK) performed better than expected with pre-tax profit up by more than 17% to £75.5m despite short-term pressures from a sharp rise in prices for UK pigs. It also hiked its total dividend by 17.6% to 44.1p. The shares advanced 1.5% to £28.69.

Chemicals group Scapa (SCPA) delivered a strong performance in the second half of the year, pushing its shares up 4.4% to 450.5p.

Retailer Topps Tiles (TPT) fell 5.4% to 97.4p as it warned that full year pre-tax profit was likely to be at the lower end of expectations due to challenging trading conditions.

Construction industry dispute resolution specialist Driver (DRV) unveiled a dramatic turnaround as it swung into pre-tax profit of £1.03m, up from a loss before tax of £1.51m in the six months to 31 March. The stock rose by 7.5% to 50p.

Andalas Energy & Power (ADL) raised £600,000 through a shares placing. The firm reported that talks were ongoing with potential partners to co-develop and fund the roll-out of Andalas' pipeline of projects.

Citi downgraded Lonmin (LMI) to 'sell' as the analyst anticipated its net worth could fall below $1.1bn, possibly by September. This could trigger its debt covenants and caused a decline in the shares by 4.4% to 93.4p.

Story provided by StockMarketWire.com

Related Company: SVT

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