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Market Wrap - Midday

Stronger oil prices and weaker pound support FTSE

12 July 2017 11:48

Sterling weakened against the dollar after Deputy Governor Ben Broadbent said he was not ready to support a hike in the interest rate.

This helped to strengthen the FTSE 100, which was trading 0.8% higher at 7,392.

A 1.3% rally in Brent crude oil prices to $48 also boosted the FTSE 100 as it lifted shares in both BP (BP.) and Royal Dutch Shell (RDSB).

Shares in BP and Shell gained nearly 2% apiece to 451.8p and £20.91, respectively.

In the UK, the unemployment rate was 4.5%, down from 4.9% a year earlier and the lowest since 1975.

Copper advanced 0.2% to $5,886 per tonne and gold glittered at $1,218 per ounce.


US equities were mostly flat overnight as investor sentiment was subdued thanks to the latest political revelations in Washington. Emails were disclosed by US President Donald Trump's eldest son, which implied Russian support in last year's election campaign.


A resilient performance in the UK and higher online spending in China bode well for luxury trenchcoat brand Burberry (BRBY). Sales were up 3% to £478m in the three months to the end of June and the stock was marked 2% higher to £16.12.

Elsewhere in the blue-chip index, UK housebuilder Barratt Developments (BDEV) nudged up 0.2% to 586p as the company anticipates full year pre-tax profit to rise from £682.3m to £765m, ahead of expectations.

Shares in Micro Focus (MCRO) were going in the opposite direction, down 5.8% to £20.70. The software product group warned that sales for the six months to 31 October 2017 would be broadly flat compared to the same period in 2016.

Tesco's (TSCO) planned takeover of Booker (BOK) could be delayed following a confirmed in-depth investigation into the deal by the Competition and Markets Authority over competition concerns. Despite the news, Tesco was unmoved at 170.6p.

UDG Healthcare (UDG) acquired US-based healthcare management consulting firm Vynamic for $32m, although this failed to fire investors' imaginations as the stock dipped 1.6% to 830p.

San Francisco's ban on sales of flavoured tobacco and caution over future sales from Investec failed to topple British American Tobacco (BATS). Shares in the cigarette seller drifted 1.4% higher to £52.52.


Among the mid-caps, airport food seller SSP (SSPG) was a winner, up 2% to 493.5p as its third quarter trading upbeat expectations. SSP reported like-for-like sales growth of 3.6%.

It was bad news for Amec Foster Wheeler (AMFW), which is under investigation by the Serious Fraud Office. The probe would focus on Amec's work with Unaoil and potential corruption offences. This saw its share price slump by 6.4% to 425.7p.

Good weather and a later Easter helped strong trading at discount retailer B&M (BME). Shares were up 2% to 342p on a 7.3% like-for-like sales jump in its first quarter.

Budget pub JD Wetherspoon (JDW) was down 1.2% to 978p despite a 3.9% rise in like-for-like sales thanks to 'unusually good weather.'


ASA Resource (ASA) received a takeover offer from Rich Pro Investors at a premium of more than 60% to Tuesday's closing price. Shares in ASA soared 51% to 1.9p.

A 'world-class' oil discovery by Premier Oil (PMO) and joint venture partners Talos Energy and Sierra Oil & Gas caused shares in the Premier to surge 27.3% to 58.8p. The discovery was at the Zama-1 exploration well in Mexico.

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