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Market Wrap - Midday

House price growth continues to slow as UK manufacturing remains strong

01 June 2017 12:07

The FTSE 100 shrugged off stocks going ex-dividend thanks to a rally in consumer giants and rose 0.3% to 7,541 in mid-morning trading.

Diageo (DGE), which includes brands such as Johnny Walker whiskey, and ice-cream-to-Marmite seller Unilever (ULVR) maintained its decent share price performance this week.

Shares in Diageo gained 1.5% to £23.63 and Unilever was up 1.1% to £43.80.

Brent crude oil was stable at $50.74 per barrel. Gold fell 0.5% to $1,265 per ounce.

UK manufacturing remained strong thanks to solid growth in output and new orders, according to Markit. The Purchasing Managers' Index was 56.7 - slightly below April's three-year high of 57.3.

Nationwide reported annual house price growth continued to slow as it declined to 2.1%. While potentially good news for prospective home owners, this would not necessarily bode well for the UK economy.

OVERSEAS MARKETS

Weakness in the banking sector weighed on Wall Street as JPMorgan and the Bank of America warned of weaker trading in the latest quarter. The S&P 500 nudged lower to 2,411 on Wednesday.

FTSE 100 RISERS AND FALLERS

It was a busy day for the UK banks as Lloyds (LLOY) and Barclays (BARC) were in the news.

Shares in Lloyds were flat at 70.16p after it completed the acquisition of UK consumer credit card business MBNA.

In a bid to meet strong investor demand, Barclays increased the size of its placing of shares in Barclays Africa, although this failed to move the stock at 209.9p. The bank sold a 33.7% stake for £2.2bn and strengthened its balance sheet.

Elsewhere, emission control catalysts developer Johnson Matthey (JMAT) warned that its profit would be hit by higher pension charges and a lack of US post-retirement medical benefit credit. Investors focused on these future threats and dismissed in-line full year profit as shares in the firm retreated 0.5% to £30.96.

Polymetal's (POLY) announcement that it acquired an additional 25% interest in the Dolinnoye gold property for $1.6m was overshadowed by its plan to appoint more non-executive directors. The stock dipped 1% to £10 on the news.

FTSE 250 RISERS AND FALLERS

Coach operator FirstGroup (FGP) was the biggest mid-cap faller on a cautious outlook statement as it flagged continued uncertainty in the UK. Investors overlooked an improvement in pre-tax profit and cash generation, and marked the stock 5.7% lower to 141.2p.

SMALL CAP RISERS AND FALLERS

Luxury shoes seller Jimmy Choo (CHOO) stepped 1.3% higher to 200p thanks to strong trading so far in 2017. The company said men's shoes performed strongly and all of its categories experienced strong growth in the first half of the year.

Self-tanning products seller Innovaderma (IDP) continued its stellar share price run as it confirmed a distribution deal with Boots Ireland for its Skinny Tan brand, triggering a 13.9% rally to 318.9p.

Publisher Haynes (HYNS) defied downbeat trading in the industry after it announced that it expected pre-tax profit in the year to the end of May to rise by up to 15%. Investors were happy to see its turnaround bear fruit as the stock gained 10% to 180p.

Building materials distributor Connect (CNCT) was 0.6% lower at 125.2p as investors expected approval from the Competition and Markets Authority concerning the sale of its education and care division to RM (RM.).

Story provided by StockMarketWire.com

Related Company: LLOY

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