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G4S gains as FTSE inches higher; ex-divs, miners fall
August 13, 2014 / 9:16 AM / 3 years ago

G4S gains as FTSE inches higher; ex-divs, miners fall

* FTSE 100 up 0.1 percent

* G4S gains; H1 profit rises on EM demand

* Ex-divs knock up to 21.26 points off index

* Miners weaken amid China slowdown concern

By Tricia Wright

LONDON, Aug 13 (Reuters) - Security group G4S was among the top risers on a slightly firmer FTSE 100 on Wednesday although progress overall was limited by miners and stocks trading without the attraction of their latest dividend.

G4S advanced 1.5 percent after posting a better-than-expected rise in first-half operating profit, led by strong demand in emerging markets.

G4S also said it was in detailed talks with a potential buyer for its U.S. government solutions business.

Trading volume in the stock was robust, at more than three quarters of its 90-day daily average against just 12 percent on the UK benchmark. The FTSE 100 was up 3.73 points, or 0.1 percent, at 6,636.15 points by 0853 GMT.

Data showing British workers earned less in the second quarter than they did in the same period last year helped the FTSE 100, which derives 75 percent of their revenues outside Britain and would generally benefit from a weaker pound. |Sterling fall against the dollar and euro during the corresponding 2013 period.

But stocks trading ex-dividend, including AstraZeneca , Royal Dutch Shell and Rio Tinto took their toll on the index, to the tune of up to 21.26 points.

Mining stocks retreated 1.6 percent, the worst performing sector. Adding to fears that a sustained recovery in China may be at risk in the second half of the year, the amount of money flowing into the country’s economy slowed to the lowest level in nearly six years in July.

Meanwhile, China’s retail sales climbed 12.2 percent, a shade below forecasts, as fixed-asset investment, an important driver of economic activity, also missed forecasts, the National Bureau of Statistics said.

Glencore shed 2.5 percent in spite of meeting market forecasts with a 13 percent increase in first-half copper output.

Fears over the situation in Ukraine kept investors on edge. The FTSE rose 1 percent on Monday after Russia said it would pull troops back from near the Ukrainian border, which investors interpreted as a sign hat tensions could ease.

But concern over Russia’s involvement in Ukraine hampered the UK benchmark on Tuesday, leaving the index flat on the day.

“Yesterday’s extremely cautious price action suggests that the move off the lows was purely technical and that market participants are a long way from being convinced that it is right to resume a ‘risk on’ mentality... Further near-term weakness still looks possible,” Charles Stanley technical analyst Bill McNamara said.

Motor insurer Admiral Group was among the top fallers, down 2.8 percent after posting first-half results.

Shore Capital repeated its “sell” rating on the stock following the numbers, which it said were lower than its forecasts. It expressed concern over the ability of the UK to continue to deliver further upside surprises following a warning from the group of reduced margins from business written in 2013.

The FTSE 100 hit a peak of 6,894.88 points in mid-May, which marked its highest level since December 1999. It has since retreated and is down around 2 percent since the start of 2014.

“I think people are just worried that we’re going to drift down,” said Joe Rundle, head of trading at ETX Capital.

Editing by Mark Heinrich

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