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Market Wrap - Midday

FTSE flat as UK inflation rises

17 October 2017 11:53

The FTSE 100 struggled as UK inflation rose to 2.8% in September, up from 2.7% in August, driven by higher prices for food and recreational goods according to the Office for National Statistics.

This could put pressure on the Bank of England to increase interest rates and this weighed on the blue chip index, which was broadly unmoved at 7,536 around midday.

Average house prices in England increased by 5.3% in the year to August.

Among the FTSE fallers were healthcare stocks, with Mediclinic (MDC) taking the lead, down 5% to 641.5p. Its peers NMC Health (NMC) and Smith & Nephew (SN.) declined 1.6% and 1% respectively.

Brent crude oil rose 0.5% to $58 per barrel. Gold and copper cheapened by up to 0.9% to $1,289 per ounce and $3.19 per pound.

OVERSEAS MARKETS

In the US, investors were feeling optimistic ahead of a raft of corporate results this week, with the Dow Jones up 0.4% to 22,956 overnight.

MID AND LARGE CAP RISERS AND FALLERS

Alton Towers owner Merlin Entertainments (MERL) slumped 18.4% to 366.9p after like-for-like sales growth slipped to 0.3% in the third quarter as the threat of terror attacks and wet weather deterred customers.

In the mining sector, investors overlooked Rio Tinto's (RIO) downgraded annual copper production guidance as the shares were stable at £37.13. The miner also reported higher third-quarter production of iron ore and coking coal.

Price comparison website Moneysupermarket.com (MONY) said revenue grew by 6% in the third quarter and reiterated its confidence in meeting full year expectations. Despite the positive update, the stock retreated 0.9% to 315.6p.

Private hospital operator Mediclinic (MDC) revealed first half patient volumes declined in Switzerland and Southern Africa, blaming the timing of Easter for the fall. The stock was down 5% at 641.5p.

Housebuilder Bellway (BWY) announced pre-tax profits increased by 12.6% to £560.7m in the year to the end of July and hiked its dividend by 13%, helping the stock gain 1.2% to £35.47.

A rise in mortgage balances in the third quarter sparked Virgin Money (VM.) 3.2% higher to 298p. The credit card provider also reaffirmed its full-year guidance.

The market was not impressed by budget airline easyJet's (EZJ) 'expression of interest' in some of Alitalia's assets as the shares were flat at £12.88.

Education business Pearson (PSON) was 6.7% higher at 662.9p after lifting full year profit guidance.

SMALL CAP RISERS AND FALLERS

Online fashion retailer Asos (ASC) delivered strong annual sales growth of 34% and achieved record profit. The shares advanced 1.5% to £57.71 in response.

British model railway brand Hornby (HRN) issued yet another profit warning after deciding it would no longer offer large quantities of stock at a discount, but an already bombed out share price nudged down 0.1% to 32.9p.

Story provided by StockMarketWire.com

Related Company: MERL

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