FTSE under pressure as Sage sinks

Global Stock Markets

A plunge in software firm Sage’s (SGE.L) shares put pressure on Britain’s top share index on Friday, while a rising pound also weighed on big overseas earners. 

The blue chip FTSE 100 .FTSE index was flat in percentage terms percent at 7,256.59 points by 0906 GMT, while mid caps .FTMC gained 0.2 percent.

Shares in Sage were down 12.7 percent, recouping some earlier losses, after the company cut its full-year revenue growth forecast after software subscription growth slowed in the first half.

Shares in Micro Focus were the biggest FTSE gainers on the day, up 6.8 percent and extending Thursday’s gains following a report that hedge fund Elliott Management had taken a stake in the British software firm

European equity markets, along with the FTSE, remained muted at the end of a week dominated by geopolitics and lingering concerns over global trade.

The geopolitical tensions have focused on Syria, after U.S. President Donald Trump threatened missile strikes in response to a suspected poison gas attack, prompting worries over a confrontation with Russia, Syria’s main ally.

On Friday precious metals mining companies were in demand, with shares in Randgold Resources (RRS.L) and Fresnillo (FRES.L) up more than 1 percent as the price of gold, considered a safe-haven asset, remained firm. [GOL]

Britain’s FTSE 100 is set for its third week of gains in a row, however, its best winning streak since early January as the focus turns to the upcoming first quarter earnings season.

A stronger pound was another drag on the FTSE, hitting shares in companies which earn a big chunk of their earnings overseas, such as British American Tobacco (BATS.L), Diageo (DGE.L) and Unilever (ULVR.L).

On the positive side, shares in paper-maker Mondi (MNDI.L) rose around 2 percent on readacross from Finnish peer Stora Enso (STERV.HE), which soared after beating first quarter expectations.

Outside of the blue chips, shares in Hammerson (HMSO.L) tanked 12 percent after France’s
Klepierre (LOIM.PA) dropped its takeover bid for the British shopping centre owner.
Hammerson’s shares gave up the bulk of the gains made since Klepierre’s indicative bid back in March, which Hammerson rejected.

UK shares dragged down by disappointing earnings

European Stock Markets

Disappointing earnings updates among mid caps weighed on UK shares on Tuesday as investors awaited U.S. inflation data for clues on the speed on interest rate hikes in the world’s biggest economy.

The FTSE  was flat by 0901 GMT, while the mid cap index .FTMC fell 0.4 percent, dragged by a plunge in Greencore shares after the food manufacturer cut its 2018 profit guidance due to issues at its US business.

Investec placed its forecasts and price target under review, noting that even though commercial developments gave the group confidence that the financial performance will improve through into FY19 this was late then management had originally expected.

Greencore (GNC.L) was down 22 percent, the biggest faller among mid caps and set its biggest one-day loss ever.

Still among mid caps, TC ICAP (TCAPI.L) fell 5.6 percent after annual profits at the world’s largest interdealer broker fell short of analyst expectations.

On the FTSE, however, Antofagasta (ANTO.L) rose 2.7 percent following a well-received trading update.

The Chilean miner Antofagasta reported a sharp rise in full-year earnings thanks to higher copper prices and said it would raise its dividend by 177 percent.

In the heavyweight mining sector, Glencore (GLEN.L) and Randgold (RRS.L) both rose 1.6 percent, helping the FTSE offset weakness among consumer staple stocks.

Direct Line (DLGD.L) was the biggest faller on the FTSE with a downgrade at Deutsche Bank to hold from buy sending its shares d own 1.6 percent.

Elsewhere, tonic water maker Fevertree Drinks (FEVR.L) fell 4 percent after hitting a record high in the previous session as a 64 percent jump in full-year core earnings failed to excite investors.

Later in the session, investors will also keep an eye on finance minister’s half-yearly update on the public finances. Philip Hammond is expected to announce an improvement in the country’s slow economic growth outlook but no policy tweak is expected.

Big oil powers FTSE 100 to record high; Debenhams drops

A rally in oil majors pushed the UK’s top share index to an all-time high on Thursday, though elsewhere retailers were under pressure after a profit warning from Debenhams. 

Britain's FTSE 100 .FTSE index was up 0.2 percent at 7,686.95 points by 0948 GMT, while mid caps .FTMC rose 0.1 percent. 

A rally in cyclical sectors such as financials and energy added around 20 points to the index, with BP (BP.L) and Shell (RDSa.L) rising 1 percent and 0.8 percent respectively.

The UK’s oil and gas index .FTNMX0530 was up 0.8 percent at its highest level since May 2008.
The British oil majors aped a move higher in oil prices, which were spurred to their highest level since mid-2015 on the back of tensions in producer Iran. [O/R]

A supportive research note from Barclays also helped the energy sector, in which analysts said they expected European integrated oil and refining companies to be cash flow positive after dividends in the fourth quarter, thanks to a higher oil price.