London close: Markets finish in positive territory as investors look to Jackson Hole

Thu 24 Aug 2017

LONDON (SHARECAST) - (ShareCast News) - London stocks held on to small gains by the close on Thursday, helped along by a solid performance in the mining sector even as the latest reading on the UK economy confirmed sluggish growth in the second quarter.
The FTSE 100 was up 0.33% or 24.41 points at 7,407.06, with heavily-weighted miners contributed much of the gains. Rio Tinto, BHP Billiton and Antofagasta were all in the green.

European markets all closed higher, shaking off Wednesday's comments from US President Donald Trump, concerning the shutdown of the US federal government if funding was not provided to build a wall along the US southern border with Mexico.

The German DAX was up 0.05% to 12,180.83, while the French CAC 40 bucked the trend closing 0.04% lower to 5,113.13. Over in Spain, the IBEX 35 closed higher to 10,357.40.

Meanwhile, the pound was up 0.05% versus the euro to 1.0847, having fallen to an eight-year low against the single currency on Wednesday and was 0.04% higher versus the greenback at 1.2805.

The Office for National Statistics (ONS) confirmed in its second estimate that UK GDP rose 0.3% in the three months to June when compared to the previous quarter, up from 0.2% in the first three months of the year.

Yet it remained among the lowest rates in Europe amid a slowdown in household spending and business investment with growth largely dependent on government spending.

Low UK growth, which was half that of the 0.6% seen by the Eurozone in the same quarter, meaning Britain was the slowest growing G7 economy thus far in 2017, came amid a slowdown in household spending to just 0.1% from 0.4% in the first quarter while business investment stagnated after the 0.6% expansion observed in the first three months of the year.

Private consumption growth slowed to its weakest rate since the end of 2014, not helped as real wages fell 0.5% in the quarter in spite of a 42-year low in unemployment, although government spending and public investment were fairly strong.

Oanda analyst Craig Erlam said: "It's clear that while the economy has not nose-dived, it is suffering in the aftermath of the Brexit vote. The pound fell initially after the data but quickly recovered to trade off its lows just below 1.28 against the dollar. The pair remains under pressure though and should this support break, 1.26 could be on the cards."

Meanwhile, the latest quarterly distributive trades survey from the Confederation of British Industry (CBI) showed retail sales in the UK fell unexpectedly in the year to August as inflation continued to bite. The retail sales balance fell to -10 - its lowest level since July 2016 - from +22 in the month before, missing expectations for a reading of +20.

In corporate news, Dixons Carphone bucked the positive trend, tumbling after warning that profits for the full-year would fall well short of expectations due to a new business model of its sales software, adding that the UK mobile phone market was proving "more challenging".

Gambling software development company Playtech climbed after saying revenues jumped 30% at constant currencies during its first half to €421.6m, with adjusted EBITDA rising 24% by the same measure to €170.9m.

Greencore was in the red as it tried to reassure investors it was on track following recent share price weakness. The company said it was not aware of any developments since its third-quarter update that changed the outlook.

EasyJet flew lower after a downgrade to 'underperform' at Exane BNP Paribas, while Hikma, Berkeley Group, and Cineworld were all weaker as their stock went ex-dividend. Dixons Carphone was also ex-div on Thursday.

It wasn't all bad news, however, with building materials group CRH rallying as it posted a 27% jump in first-half pre-tax profit and announced an agreement to sell its Americas distribution division to Beacon Roofing Supply for $2.63bn in cash.

Subprime lender Provident Financial surged just over 13%, recouping some of its losses from earlier in the week when it tanked 66% on the back of a quadruple whammy of bad news that included a profit warning.

OneSavings edged higher after posting a 20% increase in underlying first-half pre-tax profit to 78.4m, beating expectations of 76.8m.

Oilfield services company Hunting gushed higher as it reported a narrower loss for the first half, while Phoenix Group was on the front foot after posting a jump in first-half operating profit.

Market Movers

FTSE 100 (UKX) 7,407.06 0.33%
FTSE 250 (MCX) 19,710.30 -0.17%
techMARK (TASX) 3,389.30 -0.06%

FTSE 100 - Risers

Provident Financial (PFG) 748.00p 13.16%
CRH (CRH) 2,793.00p 3.83%
WPP (WPP) 1,462.00p 2.96%
Mediclinic International (MDC) 754.50p 2.51%
British American Tobacco (BATS) 4,840.00p 2.36%
Persimmon (PSN) 2,631.00p 1.98%
Antofagasta (ANTO) 1,014.00p 1.81%
BAE Systems (BA.) 602.00p 1.69%
Fresnillo (FRES) 1,589.00p 1.60%
Taylor Wimpey (TW.) 197.00p 1.39%

FTSE 100 - Fallers

easyJet (EZJ) 1,214.00p -4.41%
Whitbread (WTB) 3,702.00p -2.60%
Marks & Spencer Group (MKS) 316.40p -1.92%
TUI AG Reg Shs (DI) (TUI) 1,308.00p -1.65%
Next (NXT) 4,104.00p -1.25%
Shire Plc (SHP) 3,695.00p -1.23%
Babcock International Group (BAB) 806.00p -1.23%
G4S (GFS) 290.80p -1.09%
Lloyds Banking Group (LLOY) 64.73p -1.02%
Ferguson (FERG) 4,540.00p -0.92%

FTSE 250 - Risers

Carillion (CLLN) 46.99p 10.41%
Sophos Group (SOPH) 515.00p 4.10%
Ashmore Group (ASHM) 372.70p 3.27%
Ferrexpo (FXPO) 294.30p 3.23%
Kaz Minerals (KAZ) 815.00p 2.71%
NMC Health (NMC) 2,663.00p 2.70%
Sanne Group (SNN) 780.00p 2.56%
Assura (AGR) 66.95p 2.53%
Vesuvius (VSVS) 583.50p 2.28%
Hunting (HTG) 427.20p 2.27%

FTSE 250 - Fallers

Dixons Carphone (DC.) 180.80p -23.16%
Greencore Group (GNC) 190.00p -8.65%
JD Sports Fashion (JD.) 314.50p -5.73%
Petrofac Ltd. (PFC) 422.00p -4.09%
AA (AA.) 169.30p -3.86%
Tullow Oil (TLW) 155.90p -3.78%
CLS Holdings (CLI) 215.00p -3.54%
Restaurant Group (RTN) 340.40p -3.35%
B&M European Value Retail S.A. (DI) (BME) 365.00p -2.69%
Euromoney Institutional Investor (ERM) 1,070.00p -2.54%
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