Wednesday 23 May 2018

British stocks fall from three-month high

Traders work on the floor of the New York Stock Exchange shortly after the opening bell
Traders work on the floor of the New York Stock Exchange shortly after the opening bell

Helen Reid

Britain's top share index slipped yesterday as a tumble in Smith & Nephew's shares and weakness across financials and health stocks dragged the FTSE 100 off a three-month high.

Despite a firmer start to trading and a weaker pound, the blue chip FTSE 100 turned lower and ended the session down 0.54pc at 7,502.69 points, only slightly outperforming a negative European market. In Dublin, the ISEQ index of Irish shares lost 0.71pc to finish at 6,795.87. The downward move was fuelled by a 2.7pc loss at Bank of Ireland.

In London, results dominated trading with sharp falls for some stocks, but investors remained positive on the overall picture for the UK earnings season.

Shares in Smith & Nephew had their worst performance in close to 10 years, down 7pc after Europe's biggest artificial hip and knee maker downgraded its revenue and profit forecasts following a weak first quarter.

Glencore shares climbed 0.4pc after the commodities trader and miner said it expected 2018 earnings from its trading division to be at the top end of its previously forecast range.

Despite the negative mood on the day, Britain's leading stock index has enjoyed a rapid revival in recent weeks. It is up a hefty 9pc since it hit a 15-month low as recently as March 26.

"I would not be surprised if we continue to see very strong UK equities numbers and a really quite material re-rating," said Guy Monson, chief investment officer at Sarasin & Partners, adding that if Brexit talks result in a settlement there could be a flight back into UK equities.

"We have been tactically adding on dark days," he added, saying he was keeping a UK focus "for a real backing of the underdog". (Reuters)

Irish Independent

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