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FTSE rally stalls, robust profits boost Sports Direct
February 19, 2014 / 4:16 PM / 4 years ago

FTSE rally stalls, robust profits boost Sports Direct

* FTSE 100 down 0.1 percent
    * Index range-bound, capped around 6,800 -analysts
    * Sports Direct gains on strong Christmas profits
    * Morrison buoyed by buyout speculation

    By Tricia Wright
    LONDON, Feb 19 (Reuters) - Britain's top shares lost ground
on Wednesday as analysts bet the strong rally that followed a
slump in emerging markets has run out of steam, though Sports
Direct gained on robust profits.
    At 1551 GMT, the FTSE 100 was down 5.60 points, or
0.1 percent, at 6,790.83 points. It hit 6,810.48, its highest
since late January, earlier in the day. The weakness followed a
rally of around 6 percent since early February.
    Analysts reckoned on the index levelling off, around 1
percent shy of a peak hit in late January, before political and
economic concerns in emerging markets took their toll on
equities. It has been trapped in a range between around 6,400 to
6,800 since late October.
    "I don't think the traction is there to really push us back
to the highs that we saw earlier this year," CMC Markets senior
market analyst Michael Hewson said. "It's going to be very
difficult to break us out of that range." 
    Britain's biggest sporting goods retailer Sports Direct
 bucked the weaker trend, up 7.6 percent in brisk trade
after unveiling a 14.6 percent rise in profit in its Christmas
quarter and saying it was confident of hitting its full-year
target.
    "We maintain our view that Sports Direct is well positioned
to drive long-term growth both in the UK and overseas," analysts
at Liberum wrote in a note, keeping their "buy" rating on the
stock.
    Trading volume in Sports Direct stood at 2-1/4 times its
90-day daily average, against the UK benchmark on three
quarters.
    Supermarket chain Wm Morrison was another good
gainer, ahead 4.7 percent, supported by speculation the business
could be taken private.
    Bankers are working on debt financing packages of around 5
billion pounds ($8.4 billion) to back a potential sale of
Morrison to private equity funds, banking sources said.
    Morrison, which is 9.5 percent owned by the founding family,
has contacted buyout firms to gauge their interest in taking the
business private after a fall in Christmas sales, Bloomberg
reported last week. 
    Firms trading without the attraction of their latest
dividend knocked a hefty 14 points off the index - namely
AstraZeneca, Barclays, Carnival,
GlaxoSmithKline and Reckitt Benckiser.

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