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Pound rebounds after Queen's Speech

21 June 2017 16:50

Sterling bounced back from earlier weakness as the Queen's Speech suggested there may be a softer tone on Brexit.

UK Prime Minister Theresa May announced on Tuesday that she still had not confirmed terms with the Democratic Unionist Party whose support would be needed if she wanted more than a minority government.

The FTSE remained weak and was down 0.3% at 7,447 as financial and consumer stocks weighed on performance.

A profit warning at Provident Financial (PFG) last night was picked up by the market as the stock crashed 17.6% to £23.61. The company blamed operational disruption in its consumer credit division.

Hargreaves Lansdown (HL.) was among the biggest fallers as it declined 2.4% to £13.29. St James's Place (STJ) retreated 1.8% to £12.05 and Standard Life (SL.) fell 1.5% to 392.2p.

Nurofen seller Reckitt Benckiser (RB.) was 1.5% lower at £78.78 and Primark owner Associated British Foods (ABF) ticked 1% down to £29.54.

Brent crude oil declined 0.4% to $45.83 per barrel and gold was stable at $1,242 per ounce. In contrast, copper rallied over 1% to $5,688 per tonne.


On Wall Street, the Dow Jones was flat today despite pharmaceutical firms Merck and Pfizer rallying on plans from the US Senate to unveil their new draft healthcare bill.


Slowing sales at Costa Coffee continued as its owner Whitbread (WTB) revealed a 1.1% increase in like-for-like sales at the coffee chain, down from 2.6% a year earlier. Investors were won over though as sales more than doubled at Premier Inn in the 13 weeks to 1 June 2017. The robust performance in this division sparked a share price rally of 3.4% to £39.84.

In the pharmaceuticals sector, rare diseases specialist Shire (SHP) announced the US Food and Drug Administration approved Mydayis. The treatment is for people over the age of 13 with attention deficit hyperactivity disorder (ADHD), but this had a limited impact on the shares which advanced 2%.


A positive note from HSBC about Capita's (CPI) outlook triggered a 3.8% rise in the stock to 696.5p. The analyst upgraded the stock from 'hold' to 'buy'.

Housebuilder Berkeley (BKG) continued to perform well in the sector as pre-tax profit soared by over 50% to £812.4m, helping the stock tick 2% higher to £32.94.


Model railway brand Hornby (HRN) received a takeover offer from Phoenix Asset Management. The company was also confident in its turnaround plan as it improved its cash flow performance and gross margins.

Over the past few years, Hornby struggled to drive sales of its products including Scalextric. The company also said it would not pay a dividend, but this failed to squash investor sentiment as the stock was up 4.8% to 32.7p.

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