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Market Wrap - Midday

Lower gold prices weigh on miners

21 September 2017 16:48

A sharp drop in the price of gold by 1.6% to $1,290 hit shares in gold miners, dragging the FTSE 100 into the red.

Mexico's second largest gold producer Fresnillo (FRES) shed 1.9% to £14.14 and Randgold Resources (RRS) declined 2.3% to £73.

Antofagasta (ANTO) also dropped 1.9% following a 0.9% decrease in the price of copper to $6,437 per tonne.

The FTSE 100 dipped 0.1% to 7,263.

Brent crude oil was stable at $56.26 per barrel.

Budget airline Ryanair (RYA) flew 0.7% lower to €16.39 following a rejection of substantial bonuses by a number of its pilots in a bid to reduce cancellations.

OVERSEAS MARKETS

In the US, investor sentiment soured after the Federal Reserve said it would start to ease back its bond holdings next month.

The Nasdaq took the biggest hit, down 0.5% to 6,420 on Thursday.

FTSE 100 RISERS AND FALLERS

The revelation that building materials firm CRH (CRH) plans to buy US cement maker Ash Grove Cement sparked a share price rally of 3% to £27.34. The building materials business said the $3.5bn deal would expand its exposure to the North American market.

Compass (CPG) announced the departure of chief executive Richard Cousins, who plans to retire at the end of September 2018 and will be replaced by Europe chief operating officer Dominic Blakemore. Shares in the contract caterer retreated 2.5% to £15.71.

Miner Anglo American (AAL) was up 2.6% to £13.28 on Vedanta (VED) founder Anil Agarwal's decision to increase his personal stake by £1.5bn.

FTSE 250 RISERS AND FALLERS

Construction company Kier (KIE) was the biggest mid-cap riser, up 6.8% to £11.69. Pre-tax profit rose 3.5% to £146m in the year to 30 June, supported by a strong order book.

A one-off restructuring charge and disposal costs at outsourcer Capita (CPI) shocked investors as these hit pre-tax profit by £9m to £28m in the six months to 30 June. The stock dropped 11.6% to 569.5p on the results.

Poor weather dampened sales growth at pub operator Mitchell & Butlers (MAB). Like-for-like sales growth was a mere 0.3% in the eight weeks to 16 September and drink sales slumped 1.2%. Investors were disappointed as the shares dropped 4.4% to 236.4p.

At Drax (DRX), chief executive Dorothy Thompson's decision to leave left the share price drifting at 308.9p. Thompson will be replaced by finance head Will Gardiner.

Spread betting business IG Group (IGG) benefited from an expanded client base as first quarter sales increased, helping the shares rise 4.8% higher to 648p.

SMALL CAP RISERS AND FALLERS

Dispute resolution services provider Driver Group (DRV) rallied 21% to 61.7p after its pre-tax profit exceeded expectations. Management said the group benefited from managing overheads and improved utilisation rates.

Shares in door manufacturer Safestyle (SFE) gained 8.2% to 200.8p despite its pre-tax profit falling by 7.4% to £8.8m in the first half with revenue growth of just 1.4% to £82.5m. The market focused on a confident outlook that said Safestyle would continue to win market share.

Story provided by StockMarketWire.com

Related Company: FRES

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