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Market Wrap - Midday

Miners struggle on lower commodity prices and bleak outlook for China

24 May 2017 11:40

Weaker commodity prices and a downgrade of China's credit score by Moody's Investors Service spelled trouble for the mining sector.

Rio Tinto (RIO), Fresnillo (FRES) and Randgold Resources (RRS) led the sector lower as Moody's downgrade triggered concerns about the outlook for China's economy.

But the mining blues weren't severe enough to put the FTSE 100 into negative territory. In late morning, trading it was up 0.2% to 7,503, supported by gains among pharma, financial and utility stocks.

Brent crude oil advanced 0.4% to $54.36 per barrel. Copper slipped 0.2% to $5,688 per tonne and gold cheapened 0.4% to $1,249 per ounce.

OVERSEAS MARKETS

Overnight, the S&P 500 gained 0.2% to 2,398 as investors responded positively to US president Donald Trump's budget plan and overlooked a subdued report concerning US home sales.

On Wednesday, both China's SSE Composite and Hong Kong's Hang Seng were flat as investors were cautious following Moody's downgrade on China.

FTSE 100 RISERS AND FALLERS

Marks & Spencer (MKS) ticked 2.1% higher to 396p as full year results weren't as bad as feared.

Shares in Mediclinic (MDC) retreated 3.1% to 841.5p after its full year earnings declined by 19% as regulations dragged on performance. The biggest private hospital group in South Africa also warned that increased demand was impacted by lower economic growth and more competition.

Royal Bank of Scotland (RBS) struggled to reach a deal with the investors who accused it of misleading them during a cash call for £12bn at the height of the 2008 financial crisis. Despite the setback, the stock advanced 1.6% to 269.2p.

Telecoms company Vodafone (VOD) announced an agreement to combine Melita and Vodafone Malta, which failed to make an impression on the market as the shares were flat at 225.7p.

FTSE 250 RISERS AND FALLERS

Retail group Kingfisher (KGF) suffered a 4.5% slump to 342.8p as its performance in France remained weak and it experienced some business disruption from its ONE Kingfisher plan.

Electrical retailer Dixons Carphone (DC.) exceeded trading forecasts in its fourth quarter and narrowed full year guidance. The firm said it expected pre-tax profit of between £485m to £490m, down from £475m to £495m. The shares were marked 5.6% up to 344.9p.

Pepsi seller Britvic (BVIC) sparked 2.5% to 720.5p as it reported strong sales growth in all its divisions, which was a marked change to its performance last year.

Plastic pipe systems manufacturer Polypipe (PLP) reported its UK operating margins were slightly lower than the previous year, which it hoped to improve through price rises. The stock was broadly unmoved at 428p.

ZPG (ZPG), better known as the parent company for Zoopla, unveiled a 22% jump in half-year revenue thanks to more traffic, which triggered a 3.3% increase in the stock to 369.9p.

Security solutions provider Softcat (SCT) fell 6.9% despite decent trading and expectations that it would deliver strong results later this year.

Shares in John Wood Group (WG.) were down 3% to 738p following its acquisition of CEC Controls for $44m.

SMALL CAP RISERS AND FALLERS

Ten-pin bowling operator Hollywood Bowl (BOWL) said operating profit improved by 18.5% to £13m in the six months to 31 March, sparking a share price rise of 5.4% to 176p.

Billing Services Group (BILL) plummeted 27.2% to 3.5p as it announced Verizon Partner Solutions would no longer accept third party charges for placing its end user telephone bills from the end of 2017.

Story provided by StockMarketWire.com

Related Company: MKS

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