Wednesday 21 August 2019

FTSE 100 lags behind European stocks

The index finished 1.4 points up at 7,471.32.

General view of Canary Wharf behind the Queen’s House and the Old Royal Naval College in Greenwich, south London.
General view of Canary Wharf behind the Queen’s House and the Old Royal Naval College in Greenwich, south London.

By Henry Saker-Clark, Press Association City Reporter

London stocks lagged behind their European peers on Wednesday, as the FTSE 100 was held back by the mining sector and a collapse in Bunzl’s share price.

London’s top flight ended the day’s trading marginally higher, up 1.4 points to 7,471.32 after a drop off in afternoon trading as US markets slipped into the red on the opening bell.

Meanwhile, European stocks were buoyed by Chinese economic growth, which came in ahead of forecasts.

David Madden, market analyst at CMC Markets UK, said: “The FTSE 100 is underperforming the rest of Europe as the mining sector is holding the London equity benchmark back.

“The Dax and the CAC 40 have hit fresh six-month highs as traders latched onto the stronger-than-expected growth figures from China.”

The French CAC closed 0.62% higher and the German Dax was up 0.43%.

In UK stocks, shares in Bunzl dived after the outsourcing and distribution firm posted slowing first quarter growth.

The company saw sales rise 4% in the period, which the firm said represents a slowdown that it linked to “mixed macroeconomic and market conditions”. Shares were down 237p to 2,314p at the close.

Conversely, packaging supplier DS Smith saw shares rise after sealing an agreement to sell two of its packaging businesses in a £54 million deal that will appease competition regulators.

The move, which comes amid DS Smith’s £1.7 billion acquisition of Europac, pushed shares up 2.7p to 355p.

Shares jumped at housebuilder Countryside after it posted a solid set of first half figures, undeterred by the gloom stalking the housing market. It was up 16p to 336.2p.

Elsewhere, car dealership business Pendragon left investors unimpressed, as its shares plummeted on the announcement of an operational review, after it fell to an unexpected loss.

The Evans Halshaw and Stratstone owner fell to an underlying pre-tax loss of £2.8 million, around £10 million down on board expectations after “challenging trading conditions” hit margins. Shares were down 2.45p to 22.7p.

Jet2 owner Dart Group slipped marginally after it warned of Brexit clouds during the current year, despite saying its profits for last year will be higher than expected.

The company said its growing leisure travel business had helped bolster results for the year to March 31. Shares were down 1p to 878p.

In currency, sterling was 0.13% down against the dollar at 1.303, and down 0.22% versus the euro at 1.154.

It came as inflation remained steady in March, with lower food prices offsetting higher fuel costs at the pumps.

Figures from the Office for National Statistics showed that CPI was unchanged at 1.9% last month, missing economist expectations of 2%.

Fiona Cincotta, senior market analyst at City Index, said: “The pound dipped marginally lower versus the US dollar as UK inflation figures allow the Bank of England to sit on their hands for longer.”

In oil, a barrel of Brent crude was up 0.08% at 71.88 US dollars.

The biggest risers on the FTSE 100 were Tui, up 37p at 852.6p, ITV, up 3.6p at 137.8p, Paddy Power, up 144p at 6,646, and Aviva, up 8.7p at 435p.

The biggest fallers on the FTSE 100 were Bunzl, down 237p at 2,314p, Rio Tinto, down 125.5p at 4,547p, BHP Group, down 48.6p at 1,861p and Mondi, down 42p at 1,717p.

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