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Downbeat growth forecasts, sterling rebound and corporate struggles weigh on FTSE

24 July 2017 16:58

The FTSE 100 continued to underperform thanks to weaker consumer, utility and airline stocks.

The index fell as the International Monetary Fund downgraded UK growth forecasts and sterling continued to strengthen against the dollar.

This reduced the value of the overseas earnings from the FTSE when translated back into pounds.

Nurofen owner Reckitt Benckiser (RB.) retreated 3.3% to £76.23 after the company's profit fell 20% on a constant currency exchange basis.

Primark owner Associated British Foods (ABF) and alcohol seller Diageo (DGE) were also down by approximately 1.2%.

Severn Trent (SVT) led the utility sector lower, falling 1.9% to £22.02. United Utilities (UU.) and National Grid (NG.) also slipped by 1.4% and 2% to 879.2p and 935p.

Among the airlines, Ryanair (RYA) flagged an 8% decline in average fares in the second half of 2017. Investors overlooked a 55% boost in first half pre-tax profit and marked Ryanair down 1.9% to 17.7p.

British Airways owner International Consolidated Airlines (IAG) fell 2.4% to 575.9p and easyJet (EZJ) was down 3.6% to £12.64 as the market feared the aggressive pricing cuts would spread.

Another noticeable faller was oil giant BP (BP.) which declined 1.9% to 437.7p.

Brent crude oil advanced 0.9% to $48.48 per barrel. Gold was broadly unmoved at $1,256 per ounce and copper rose 0.4% to $6,018 per tonne.

OVERSEAS MARKETS

Investor sentiment was subdued on Monday ahead of the Federal Reserve's meeting and Google parent Alphabet's latest results. The Dow Jones dipped 0.3% to 21,519.

FTSE 250 RISERS AND FALLERS

Gourmet sausages seller Cranswick (CWK) was sizzling following a positive start to its financial year. Sales in the three months to 30 June jumped 27% ahead of the corresponding period last year and the company said it plans to boost investment in its meat processing plants. Shares in the company increased 2.7% to £29.20.

In the mining sector, Petra Diamonds (PDL) reported record levels of production and revenue for 2017 thanks to a stable diamond market. Unfortunately, a jump in the net debt and the negative impact on operating costs from a stronger Rand dragged on Petra's performance as the stock slumped 6.4% to 102.8p.

Ascential (ASCL) pleased the market with a 26% rise in operating profit to £48.1m in the first half of 2017. The media firm was up 3.4% to 347.8p.

SMALL CAP RISERS AND FALLERS

Georgia Healthcare (GHG) agreed to acquire the Khashuri and Qareli community hospitals from IC Group, an insurance company for GEL10m, triggering a 5.5% share price rise to 380p.

CentralNic (CNIC) surged 20% to 61.8p on the return of Don Baladasan as chief financial officer. He used to hold the same role from 2010 to 2014.

Story provided by StockMarketWire.com

Related Company: RB.

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