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Britain's FTSE flat as sterling strength outweighs M&A and strong miners
February 2, 2017 / 10:21 AM / 10 months ago

Britain's FTSE flat as sterling strength outweighs M&A and strong miners

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* FTSE 100 down 0.1 percent

* Reckitt Benckiser takeover news buoys stock

* Aberdeen fund manager sinks on further outflows

LONDON, Feb 2 (Reuters) - Britain’s blue-chip FTSE 100 index was flat on Thursday, as a strong sterling offset gains by consumer products group Reckitt Benckiser related to a potential acquisition, as well as strong energy and mining sectors.

The index held steady as sterling reached a seven-week high after lawmakers last night voted in favour of beginning the Brexit process. A strong sterling weighs on the index heavy in foreign-earning companies.

Reckitt Benckiser was a top gainer after saying it was in advanced talks to buy U.S. baby-food maker Mead Johnson. Its shares were last up 2.5 percent and were through their 30-day average daily volume in the first 40 minutes of trade.

“Reckitt Benckiser makes it a brace of companies whose share prices have defied traditional M&A reaction recently, rising on news of spending big to acquire,” Mike van Dulken, head of research at Accendo Markets, said in a note.

Foodservice company Compass Group gained 2.6 percent after maintaining its full-year outlook.

Miners Randgold Resources and Fresnillo also supported the index, up 1.5 to 2.1 percent respectively.

Shares in oil major Shell climbed 1.3 percent despite profits missing expectations, as debt reduction efforts and a healthy dividend pleased investors.

“Upstream made a profit two quarters in a row, which will give people encouragement, and cash flow was strong,” added Russ Mould, investment director at AJ Bell.

Worldpay Group was the worst-performing blue-chip stock, down 3.8 percent after stakeholder Ship Global 2 &CY S.C.A. sold 214 million shares in the online payments company. The stock was through 10 days’ worth of average trading volume as markets digested the sale.

Pharmaceuticals giant AstraZeneca was also a faller, down 1.5 percent after it said profit and revenue would decline this year as cheap generic versions of its cholesterol drug hit sales.

Energy companies led the small-cap index higher, with oil exploration consultant RPS Group up 9.8 percent after it increased its profit outlook. Its shares were headed for their best daily gains since Feb. 2015.

Liberum analysts cited President Trump’s commitment to infrastructure spending, and reinitiation of the Keystone XL pipeline project, as positive for RPS, on which it has a ‘buy’ rating.

Aberdeen Asset Management was the worst-performing stock in the mid-cap index, down 4.7 percent after its first-quarter trading update showed outflows of 10.5 billion pounds, higher than expected.

This marks the 14th consecutive quarter of equity outflows for the firm, UBS analysts said. (Reporting by Helen Reid; Editing by Mark Potter)

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