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Market Wrap - Midday

FTSE struggles to gain momentum as housebuilding stocks weigh on performance

04 August 2017 11:47

The FTSE was static at 7,481 as Royal Bank of Scotland's (RBS) impressive performance failed to offset weakness in the housebuilding stocks.

Housebuilders struggled after reports the Help to Buy scheme may be scrapped earlier than expected. Broker Liberum warned scheme was removed it could impact margins and sales rates across the whole sector.

Persimmon (PSN) led the pack lower with a 3.7% decline to £24.71. Peers Barratt Developments (BDEV) and Taylor Wimpey (TW.) fell 3.5% and 2.9% to 595.5p and 189.5p, respectively.

Brent crude oil dropped 0.8% to $51.61. Gold and copper were stable at $1,269 per ounce and $6,349 per tonne.


Media reports suggested that special counsel Robert Mueller convene a grand jury into the alleged Russian involvement in the US elections last year. The news subdued investor sentiment as the Dow Jones was flat at 22,026 overnight.

In Asia, the stock markets also struggled to gain momentum as Hong Kong's Hang Seng was broadly unmoved at 27,562.


Investors were thrilled with Alton Towers owner Merlin Entertainment's (MERL) latest results as the stock accelerated 3.1% to 477.1p. The theme park operator said revenue was up 20.8% thanks to the opening of LEGOLAND Japan, a strong Easter trading period and the positive contribution from new accommodation.

In other corporate news, Royal Bank of Scotland reported an operating profit before tax of £1,951m in the first half of 2017, triggering a 1.8% rise in the stock to 260.8p. The bank also announced it would set up headquarters in Amsterdam as a contingency plan for Brexit.

In the airline sector, easyJet (EZJ) carried 8.9% more passengers in July and boosted load factor from 95.8% to 96.8%, although this failed to move the share price at £12.61.

Elsewhere, Pearson (PSON) was down 1.3% to 660p thanks to underlying growth in revenue, operating profit and earnings in the first half of the year. The firm also cut its dividend by 72% and announced a restructuring programme.


Paysafe (PAYS) recommended a £2.96bn takeover offer from Blackstone and CVC, pushing the share price 0.6% to 596p.


Nearly two-fifths of Providence Resource's (PVR) value was wiped off after the company revealed that the Druid prospect was water-bearing. The oil and gas firm said it planned to assess the Dromberg target 1,000 metres underneath Druid.

Europa Oil & Gas (EOG) also has assets in the same basin, causing investors to mark the share price 5.4% lower to 6.9p.

Elsewhere on the AIM market, Stanley Gibbons' (SGI) sale of its interiors division fell apart after Millicent said it didn't have enough money to seal the deal. The share price bounced back from an initial 10% fall to settle at 9.2p.

Shares in popular pollster YouGov (YOU) jumped 8.1% to 281p on expectations that its results for the year to the end of July would beat previous expectations.

RPS (RPS) unveiled adjusted pre-tax profit rose 35% to £27.2m and pleased the market after the consultancy said it is anticipated to beat full year market expectations. The stock advanced 3% to 274.5p.

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