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Markets shaky amid WPP warning and Trump confrontation

23 August 2017 16:41

UK and US markets were volatile on Wednesday. Dominating the agenda was a gloomy warning by FTSE 100 media group and economic bellwether WPP (WPP) about its near-term prospects.

US equities also fell into the red after president Donald Trump threatened to end the North American Free Trade Agreement and shut down the government in order to secure funding for his border wall with Mexico.

The FTSE 100 ended the day five points ahead at 7,387, having spent most of the day in negative territory. Over the pond at 4.30pm UK time, the Dow Jones was trading 56 points lower at 21,843 and the S&P 500 was 0.2% down at 2,447. The price of gold, which tends to rise during times of political and economic uncertainty, advanced 0.2% to $1,287 per ounce.

FTSE 100 MOVERS

WPP (WPP) downgraded its full year forecasts, with its like-for-like revenue growth forecast for 2017 downgraded from 2% to between zero and 1%. Shares in the company slumped 11.2% to £14.15.

The underwhelming performance was blamed on lower sales in all regions except the UK, Latin America and Central and Eastern Europe.

The results have wider implications as advertising spend is often seen as a good indicator of the health of the wider economy.

Elsewhere in the FTSE 100, the housebuilding sector remained under pressure and offset gains in healthcare stocks.

Barratt Developments (BDEV) and Persimmon (PSN) slid 1.5% to 606.5p and 0.9% to £25.76, respectively.

OVERSEAS MARKETS

Typhoon Hato in Hong Kong halted trading in the Hang Seng index this morning, while the Nikkei 225 in Japan advanced 0.2% to 19,434.

FTSE 250 RISERS AND FALLERS

NMC Health (NMC) was among the mid cap risers, up 7.2% to £25.93 as reported revenues surged by 34% to $775.2m in the first half of 2017. The private healthcare provider also signed a new operation and maintenance contract for the management of its Emirates Healthcare assets.

Playtech (PTEC) agreed to acquire technology, intellectual property and certain customer assets from ACM in a bid to boost its financials division's B2B offering, but this failed to excite investors as the stock was flat at 993.5p.

SMALL CAP RISERS AND FALLERS

Video games retailer GAME Digital (GMD) was encouraged by recent growth in the UK and Spanish markets, triggering a share price rally of 35.5% to 33.38p. The company said it expected this momentum to continue into its peak trading period, driven by strong demand for the Nintendo Switch, the upcoming Microsoft's Xbox One X and new games releases.

A return to profit in Costain's (COST) natural resources division boded well for the company. Overall sales were up 10.5% to £874.5m, which beat broker Liberum's forecast of £794m. After a rally earlier in the day, the shares ended the session 0.5% lower at 438.75p.

New investment for Highlands Natural Resources (HNR) from an undisclosed oilfield services provider for the East Denver project prompted investors to mark the stock 13.3% higher to 25.5p.

Shares in Laura Ashley (ALY) were down 4% to 8.36p after like-for-like sales fell 3.1% in the 52 weeks to the end of June.

EnQuest (ENQ) disappointed the market after announcing overall average daily production for the full year 2017 is anticipated to be in line with the first half 2017 production rate, plus or minus 10%. The stock dropped 9.9% to 29.5p.

Packaging firm Robinson (RBN) declined 7.7% to 120p as higher costs hit profit margins and demand for its premium products fell.

Energy efficiency products provider Entu (ENTU) collapsed by 58.3% to 1.45p after warning that it might have to put its parent group into administration and sell its trading business, should it fail to secure additional funding.

Story provided by StockMarketWire.com

Related Company: WPP

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