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Market Wrap - Midday

FTSE falls on disappointing results and decline in copper price

07 November 2017 16:46

News that SSE (SSE) and Npower owner Innogy were in talks over creating a new energy supply firm triggered a 2.9% rise in the UK-listed utility company to £14.14.

However, disappointing results from Primark owner Associated British Foods (ABF) and security firm G4S (GFS) and a sharp fall in the price of copper dragged the FTSE 100 into negative territory.

Copper cheapened 2% to $3.09 per pound.

Miners Rio Tinto (RIO) and BHP Billiton (BLT) dropped 0.8% and 0.4% to £37.44 and £14.57, respectively.

By the close, the FTSE 100 had retreated 0.5% to 7,520.

Brent crude oil was down 0.8% at $63.74 per barrel and gold shed 0.6% to $1,271 per ounce.

DISAPPOINTING RETAIL SALES GROWTH

In the UK, retail sales rose by a mere 0.2% in October, which is a substantial fall from 2.4% growth in October 2016. The British Retail Consortium said retailers should have 'cause for concern' in the run up to Christmas as people chose days out instead of hitting the shops.

OVERSEAS MARKETS

In the US, the stock markets were subdued on mixed financial reports. Royal Caribbean Cruises revealed strong profit growth, while Tripadvisor struggled on lower hotel revenue.

Around 4:30 UK time, the S&P was flat at 2,592.

OTHER MID AND LARGE CAP RISERS AND FALLERS

Associated British Foods was down 3.8% at £32.14 as investors focused on the impact from lower EU sugar prices instead of a 15% jump in sales in the 52 weeks to 16 September.

Security firm G4S warned sales would be weaker than anticipated, causing the shares to drop 4.9% to 265.9p. According to the company, all regions experienced growth except the Middle East and India.

Currency movements helped cigarette maker Imperial Brands (IMB) rise 0.8% to £31.11. Operating profit increased 2.2% to £2.3bn while sales soared 9.5% to £30.2bn.

Support service firm DCC (DCC) made it first foray into the US energy market through the acquisition of Retail West's liquefied petroleum division for $200m. Its shares ticked 1.3% higher to £73.89 on the news.

Insurer Direct Line (DLG) reversed 3% to 355.9p despite being on track to meet its targets.

In the same sector, Hiscox (HSX) advanced 1.8% to £14.34 on a 12.4% rise in gross written premiums in the first nine months of the year.

SMALL CAP RISERS AND FALLERS

Investors raised a glass to tonic water seller Fevertree (FEVR) after announcing it would finish the year ahead of expectations. The stock surged 13.6% to £22.28.

Blancco Technology Group (BLTG) reported organic growth of 19% and a 31% jump in sales to £27.7m in the year to 30 June, helping the small cap catapult 46.7% to 79.9p.

UP Global Sourcing (UPGS) boosted revenues by 39.1% in the year to 31 July and reported an 18.7% increase in pre-tax profit, causing the stock to rise 7.7% to 94.7p.

Windows supplier Tyman (TYMN) said underlying full year pre-tax profits would be below market expectations due to higher input costs, resulting in a 6.2% drop in the stock to 330p.

Positive results at investment firm Armadale's (ACP) Mahenge Liandu graphite project in Tanzania sparked a share price rally of 23.2% to 1.9p.

Attraction experiences developer Paragon Entertainment (PEL) plummeted 26.8% to 2.1p after warning full year earnings would be 'significantly lower than previous expectations at approximately £0.7m.'

Story provided by StockMarketWire.com

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