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Return of the FTSE 100 dollar earner rally

29 September 2017 16:33

The weakest annual UK economic growth since 2013 triggered a fall in sterling against the value of the US dollar. That benefited the large number of FTSE 100 stocks which generate earnings in the foreign currency. The FTSE 100 index ended the day 0.6% higher at 7,369.

Dollar earners lifting the FTSE included miners which sell products prices in US dollars and companies that work in North America such as construction firm CRH (CRH), up 1.2% to £28.17. Notable movers in the mining sector included Anglo American (AAL), up 2.5% to £13.38.

The UK economy grew by 0.3% in the second quarter of 2017, according to the Office for National Statistics. The services sector was the only division to provide a positive contribution.

Also weighing on sterling was news that house prices fell for the first time in eight years, according to Nationwide's house price index. Property prices in London were down 0.6% year-on-year.

OVERSEAS MARKETS

The S&P 500 extended yesterday's rally where it achieved a new record high at the market close. On Friday 4.15pm UK time it traded a further 0.2% higher at 2,515.

In Asia, the Hang Seng in Hong Kong closed the day 132 points higher at 27,554, equal to a 0.5% rise.

MID AND LARGE CAP RISERS AND FALLERS

Broadcaster ITV (ITV) jumped 3.5% to 174.55p on a bullish broker research note.

Insurer Beazley (BEZ) reported an early estimate of $175m to $275m in net costs from the recent raft of Atlantic hurricanes and series of earthquakes in Mexico. The company estimated the losses would reduce 2017 earnings by approximately $150m. Investors were relieved the figures wasn't higher, sending its shares up 3.9% to 477.5p.

Life insurer Aviva (AV.) agreed to sell its Italian joint venture Avipop Assicurazioni to Banco BPM for €265m, helping the shares tick up 1% to 514.5p.

Fund administration services provider Sanne (SNN) jumped 5.3% to 800p after striking a deal to buy Luxembourg Investment Solutions.

A strong trading update from defence tech company QinetiQ (QQ.) boosted its share price by 5.8% to 247p. Investors were particularly impressed by the performance in its Global Products division which is expected to grow in 2018 thanks to contracted orders and a strong pipeline.

Infrastructure developer John Laing (JLG) said it would invest more money in renewable energy assets including a wind farm project. Its share price held firm at 285p.

SMALL CAP RISERS AND FALLERS

Struggling Carillion (CLLN) dropped 18.4% to 52.13p on yet another profit warning. It said full year results would be below current market expectations. At the half year stage underlying pre-tax profit plummeted 40% due to the phasing of equity disposals and underwhelming trading.

Online estate agent Purplebricks (PURP) said strong progress was made across the business since the start of the financial year on 1 May 2017. Shares were up 3.9% to 386.75p after the company said first half revenues in the UK were likely to more than double compared to the same period last year.

Lower than expected selling prices has caused havoc at Firestone Diamonds (FDI:AIM), prompting a sell-off in its stock by 30% to 19.9p. The company said it would have to redevelop its mine plan and restructure its debt obligations. Story provided by StockMarketWire.com

Related Company: CRH

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