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Consumer giants retreat on stronger pound

29 June 2017 17:06

The pound moved 0.5% higher against the dollar following yesterday's surprise announcement from Bank of England governor Mark Carney which suggested that interest rates in the UK could soon rise.

A stronger pound made the larger number of overseas earners in the index less attractive and pulled the FTSE into the red, eliminating earlier gains. The blue-chip index closed 0.5% down at 7,350.

Consumer giants with large overseas earners led the way down. Ben & Jerry's ice-cream-to-Marmite seller Unilever (ULVR) fell 2.7% to £41.56. Nurofen owner Reckitt Benckiser (RB.) was also weak with a 1.9% decline to £76.87.

In contrast, a bullish stance on HSBC (HSBA) from analysts at Morgan Stanley helped to put a shine on the banking sector.

HSBC could generate significant amounts of surplus cash, according to the research note. This excited investors and had a positive read across for the sector including Barclays (BARC), up 1% to 205.5p.

Brent crude oil was up 0.3% to $47.48 per barrel. Copper increased 1% to $5,930 per tonne and gold fell 0.4% to $1,241 per ounce.


Banks were among the winners yet again on Wall Street after passing a tough annual stress test which looked at how they could cope during a severe economic downturn.

A 2% gain in both JP Morgan and Goldman Sachs wasn't enough to stop the Dow Jones index slipping 0.2% to 21,417.


Back on the UK stock market, shares in broadband provider Sky (SKY) ticked 3.3% to 988.5p despite the Culture Secretary Karen Bradley saying she was 'minded to' refer the acquisition of 21st Century Fox to the Competition & Markets Authority.

Tesco (TSCO) was impatient with the progress of its merger with Booker after the supermarket requested the Competition & Markets Authority use the 'fast track' process. This would speed up the investigation into the proposed merger. Tesco's shares were flat at 172p.

Outsourcing group Babcock (BAB) won a new contract win from the Norwegian government but the shares were dragged down 1% to 885.2p as it went ex-dividend.


The difficult retail sector continued to bite on big high street names, such as JD Sports Fashion (JD.). The trainers and sportswear seller warned that margin pressure was limiting sales growth, causing the stock to fall 8.4% to 364.2p.

A raft of good news bode well for packaging firm DS Smith (SMDS), which gained 8.3% to 481.2p. Alongside strong year results thanks to organic growth, the packaging company also agreed to acquire 80% of Indevco Management Resources for $920m.

Shares in Wood Group (WG.) continued their downward trajectory on a weaker than expected first half performance as further reduction in projects and modifications work dragged on performance. The oil services group fell 2.4% to 644.5p.

Beer brewer and local restaurant chain Greene King (GNK) delivered record sales of £2.2bn in the year to 30 April, but the figures were overshadowed by a warning that challenges to its growth would intensify. Risks affecting the overall industry include higher costs, weaker consumer confidence and greater competition. The stock was stable at 688.5p.


Nearly a third of Utilitywise's (UTW) value was wiped off to 76.7p after it revealed it would have to repay £7.6m worth of commission payments to an energy firm. This was due to several clients it helped get new energy deals using less energy than anticipated.

Disruptive online estate agent Purplebricks (PURP) continued its impressive share price rally on strong full year results with a surge in sales by 150% to £46.7m in the year to 30 April. The stock rose 5.6% to 421.5p.

Poor trading conditions in Singapore hit New Trend Life's (NTLG) share price hard, down 25% to 1.5p. The company reported a poor performance, lower sales and wider pre-tax losses.

Shares in Westminster Group (WSG) surged 19.6% to 16p as the technology security solutions provider said it was in a 'better position than it has been for some time.'

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