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Market Wrap - Midday

Positive broker note boosts housebuilders

19 July 2017 11:53

The FTSE 100 gained positive momentum amid a rally in housebuilding stocks after a positive sector note from broker Liberum.

Barratt Developments (BDEV) and Taylor Wimpey (TW.) led the sector higher and rose by up to 1.3% to 603p and 184p, respectively.

Persimmon (PSN) ticked up 0.7% to £24.

The blue-??chip index was trading 0.2% higher at 7,404, but this eased back to 7,394 in midday trading.

Brent crude oil nudged 0.5% higher to $49 per barrel. Copper and gold remained subdued at $6,018 per tonne and 1,240 per ounce.


It was a mixed picture on Wall Street as a jump in subscribers at Netflix helped to rally the tech-focused Nasdaq index, while weaker trading at global bank Goldman Sachs weighed on the Dow Jones.

Overnight, Nasdaq was 0.5% up at 6,334 and the Dow Jones closed 0.2% lower at 21,574.


Nurofen owner Reckitt Benckiser (RB.) agreed to sell its Food business to McCormick & Company for $4.2bn on a cash-free, debt-free basis, but this failed to spark the share price at £79.21. The division includes the French's, Frank's RedHot and Cattlemen's brands. Reckitt Benckiser topped the blue-chip risers and was up 1.4% to £79.20.

In corporate news, BHP Billiton (BLT) achieved full year production guidance for petroleum and iron ore, with annual production records at Western Australia Iron Ore, Spence and two Queensland Coal mines. Despite the strong results, the stock was broadly unmoved at £13.11.

Utility giant Severn Trent (SVT) reaffirmed its full-year trading performance was in-line with its expectations. Shares in the firm remained stable at £22.26.


Power generation firm Drax (DRX) was the biggest mid-cap faller after reporting a loss before tax of £83m in the first half of 2017. This was significantly lower than £184m pre-tax profit in the first six months of 2016, triggering a 3.4% fall to 332.7p.

Shares in RPC (RPC) were surging in the opposite direction after revenues in the first half of 2017 hit £960m. This was 'well ahead' of the same period last year thanks to continued organic growth, the contribution from acquisitions and positive foreign exchange movements. Shares in the plastics products designer jumped 5.8% to 876p.

QinetiQ (QQ.) said orders in its EMEA Services division were slower than expected with some customer contract award decisions deferred or delayed. The company also warned the recent General Election presented both opportunities and challenges, which was not received well by the market as the stock declined 8.2% to 251.8p.

Hungarian airline Wizz Air (WIZZ) flew 0.7% higher to £25.76 on a record profit of €58.1m in the three months to 30 June 2017. The company also appointed Stephen Jones as executive vice-president and deputy chief executive officer.


Shares in The People's Operator (TPOP) dived 12.7% to 2.5p on management changes. Chief executive officer Mark Epstein resigned with immediate effect.

Gene editing firm Horizon Discovery (HZD) agreed to buy Dharmacon for £65m from General Electric and plans to raise £80m by issuing new shares at 205p. The stock surged 9.2% to 235.9p.

Elsewhere, TT Electronics (TTG) announced it intends to dispose of its transportation sensing and control division to AVX for £118.8m to help the company invest in structural growth markets. Shares in TT increased 11.3% to 203.3p.

A strong first trading update from Morgan Sindall (MGNS) prompted a 5.2% rise to £12.85. The construction company said it expects pre-tax profit to hit £23.5m, up 45% from last year.

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