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Market Wrap - Midday

FTSE flat on lower oil prices and weaker UK economic data

07 July 2017 11:57

Weaker oil prices and a week of downbeat UK economic data dragged on the FTSE 100, which was unmoved at 7,341 at midday.

Brent crude oil slid 3% to $46.67 per barrel. Gold and copper cheapened 0.2% to $1,220 per ounce and 0.3% to $5,820 per tonne.

Oil giants Royal Dutch Shell (RDSB) and BP (BP.) dipped 0.5% to £20.58 and 0.3% to 444.5p, respectively.

Fellow FTSE 100 constituent Royal Mail (RMG) fell 3.7% to 408.6p after investment bank downgraded the stock to 'sell'. It said weak retail sales and lower e-commerce growth would work against Royal Mail (RMG), adding that letter volumes may also continue to decline.

On the property market, the pace of house price growth in the UK continued to slow in the three months to June. The annual rate of growth declined to 2.6%, marking the lowest rate since May 2013.


Weaker than expected US jobs data, falling oil prices and further tensions on the Korean peninsula weighed on market sentiment in the US and Asia.

On Wall Street, the S&P 500 closed 0.9% lower at 2,409 overnight, while the Hang Seng in Hong Kong was the biggest faller in Asia, down 0.5% today at 25,340.


Among the mid-caps on the UK stock market, cushions-to-curtains seller Dunelm (DNLM) was up 5.6% to 631.5p on strong like-for-like growth of 3.8% in the year to 1 July.

Defence group Ultra Electronics (ULE) struck a deal to buy US-listed Sparton for $234.8m. The target company offers manufacturing services for complex electromechanical devices. Ultra's shares were unmoved at £20.

Engineering data provider AVEVA (AVV) made a solid start to the year and reported good cash generation since 1 April, but the update failed to spark the share price at £19.92.


Shares in oil services group Cape (CIU) catapulted 45.9% to 264.5p after it received a £332.3m takeover bid from Altrad UK.

Drinks specialist Distil (DIS) benefited from more rum sales as the weather heated up. Shares in the alcohol seller rallied 14% to 2.8p on strong growth in sales and volumes during the three months to June.

The outlook appeared brighter for magazine publisher Future (FUTR). The firm agreed to acquire Centaur Media's (CAU) home interest division for £32m, sparking a 10.4% share price gain to 275p. Centaur said it would use some of that money to buy telemarketing firm MarketMakers for £13.4m.

Shares in oil and gas engineer Fenner (FENR) jumped 7.3% to 312.5p after it said full year operating profit would be higher than previous expectations.

Investors overlooked British luxury brand Mulberry's (MUL) joint venture deal with Onward Global Fashion in Japan as the stock nudged 2.3% lower to £10.55.

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