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Aggreko leads FTSE 100 fall as index runs out of power
September 12, 2013 / 10:37 AM / 4 years ago

Aggreko leads FTSE 100 fall as index runs out of power

* FTSE 100 down 15.6 points at 6,572.83

* Aggreko knocked by Deutsche’s dim earnings view

* Morrison rises as outlook catches shorts on the hop

* AMEC up as it calls off bid for Kentz

By David Brett

LONDON, Sept 12 (Reuters) - Britain’s top share index ran out of steam again as it approached resistance around the 6,600 level with temporary power provider Aggreko leading the retreat on earnings worries.

Aggreko fell 3.1 percent with traders citing a note from Deutsche Bank as the catalyst. The investment bank cut its target price on the company by 11 percent to 1,870 pence and gave a cautious outlook for earnings.

Aggreko, which released two profit warnings late last year, is currently the third most shorted stock on the FTSE 100 with near 25 percent of the stock available for loan being utilised by investors betting the stock will fall, data from Markit showed.

The FTSE 100 was down 15.60 points or 0.2 percent at 6,572.83, with only the defensive healthcare sector in positive territory. The index suffered a broad-based retreat after failing again to breach 6,600 - a level it has closed above just once since early August.

Steve Ruffley, chief market strategist at InterTrader, said the FTSE 100 was seeing technical resistance at 6,569.65 and higher at 6,616 but with firm support not far away the index was likely to keep in a tight range.

“We have support at 6,479 and 6,434. With the speculation of Federal Reserve stimulus easing on the cards there may be some dip-buying opportunities,” he said.

Britain’s fourth biggest grocer by revenue Wm Morrison Supermarkets rallied 2.9 percent to top the list of gainers with traders citing dividend, outlook, and valuation attractions as a trigger for short covering after the firm’s first-half results.

Wm Morrison is the 10th most shorted stock on London’s blue chip FTSE 100, according to data from Markit, while 22 out of 25 analysts covering the stock rating it as either a “hold” or “sell”.

AMEC, meanwhile, climbed 2.2 percent after the British engineer said it will not make an offer for oil and gas construction firm Kentz, as it continues to try to expand in Australia, Africa and the Middle East.

Editing by Jeremy Gaunt

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