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Saturday 17 August 2019

FTSE 100 falls from all-time high despite SSE shares surging over tie-up talks

The FTSE 100 Index closed down 49.17 points to 7,513.11.

A picture of the SSE logo
A picture of the SSE logo

By Ben Woods, Press Association Chief City Correspondent

London’s premier index has retreated from record heights despite a hefty jump from utility giant SSE over talks to launch a new company with Npower-owner Innogy.

The FTSE 100 Index closed down 49.17 points to 7,513.11, dropping back from an all-time high in the previous session when the top tier reached 7,562.28.

The drop came despite SSE rising more than 2%, or 36p to 1,410, as investors responded to “well-advanced talks” between SSE and German-based Innogy over creating a combined business including their household energy supply and services businesses.

Graph showing Sky share price (PA)

The new entity would be listed and SSE would “demerge its shares to its shareholders”.

Britain’s Big Six, which includes SSE, are bracing for a raft of regulatory changes after the Government announced last month that a price cap will be imposed on poor-value energy tariffs.

Across Europe, Germany’s Dax was 0.7% lower and the Cac 40 in France fell by 0.4%.

Graph showing G4S share price (PA)

On the currency markets, the pound drifted down against the US dollar, as the greenback got a boost following a solid update from the US jobs market, which showed 6.09 million positions were available at the end of September.

Sterling was off 0.2% versus the US dollar at 1.31, despite the Halifax index showing annual house price growth had accelerated in October, pushing average property values to a new high.

Across the UK, the average house price stood at £225,826 in October, surpassing a previous high in September, the report said.

The pound was 0.1% higher versus the euro at 1.13.

In oil, Brent crude fell 0.4%, but continued to hover around its highest level in more than two years at $63.72 a barrel.

Traders were reacting to a report from Opec pointing to slower demand and an unexpected rise in US shale production. Such conditions could potentially exacerbate the global supply glut.

Focusing on UK stocks, security services giant G4S was the biggest faller on the FTSE 100 after it rolled back its annual revenue targets and saw sluggish trading in the Middle East and India.

Shares were down in excess of 4%, or 13.1p to 226.5p, as it tweaked full-year organic revenue forecasts from between 4% and 6%, to 3%-4%.

Sky was 1% lower after it emerged that 21st Century Fox had discussed selling its stake in the broadcasting giant to Disney as part of a wider deal.

Shares were down 9.5p at 930p, with Disney eyeing a possible swoop for Fox’s movie assets and part of its TV assets.

However, talks have stalled because the two entertainment powerhouses are at odds over how the deal should be priced.

Primark-owner Associated British also sank more than 3%, or 125p to 3,218p, as it joined calls for a Brexit transition deal amid fears over customs chaos.

In a contrast of fortunes, Imperial Brands was sitting among the biggest risers after “stepping up” its expansion into the vaping market as the tobacco industry comes under pressure from falling cigarette sales.

Shares rose 15p to 3,100p, with the company saying it will press ahead with new e-vapour launches in new and existing markets and consumer trials of “heated tobacco products”.

The biggest risers on the FTSE 100 Index were SSE up 36p to 1,410p, DCC up 100p to 7,390p, NMC Health up 34p to 3,199p, Hargreaves Lansdown up 14p to 1,590p

The biggest fallers were G4S down 13.1p to 266.5p, Associated British Foods down 125p to 3,218p, Direct Line Insurance down 11.1p to 355.9p, Kingfisher down 9.1p to 307.5p.

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