Thursday 16 August 2018

London market eases back from record heights

The FTSE 100 Index closed down 11.32 to 7,592.66.

Shoppers in the rundown to Christmas on Buchanan Street in Glasgow city centre (PA)
Shoppers in the rundown to Christmas on Buchanan Street in Glasgow city centre (PA)

By Ben Woods, Press Association Chief City Correspondent

London’s top-flight index retreated from record heights in the final trading session before Christmas, despite consumer and retail stocks enjoying a festive boost.

The FTSE 100 Index closed down 11.32 to 7,592.66, easing back from Thursday’s all-time high when a Santa rally sent the top tier beyond the 7,600 mark for the first time at 7,603.98.

Retail giant Next and Dettol-owner Reckitt Benckiser were among the biggest risers as investors anticipated a sales lift from last-minute Christmas shoppers.

ipanews_dc8fa6a7-4f2f-476d-a277-1f35ba2ae4bb_embedded150757
The FTSE 100 Index since the start of the year (PA)

Next and Reckitt rose 164p to 4,579p and 113p to 6,833p respectively, while Primark-owner Associated British Foods pushed up 23p to 2,819p.

European markets were also in the red, with Germany’s Dax dropping 0.5% and the Cac 40 in France drifting 0.3% lower.

On the currency markets, traders were grappling with the latest slug of economic data, which showed gross domestic product (GDP) grew by 0.4% in the final reading for the third quarter.

Among the data releases, the Office for National Statistics (ONS) said annual household spending had risen by just 1%, the lowest rate since 2012.

It comes amid a squeeze on consumer finances from higher inflation, triggered by the Brexit induced collapse in the pound, and dismal wage growth.

Business investment grew at 0.5% and, on an annual basis, GDP expanded by 1.7% in the third quarter, an upward revision from 1.5%.

Sterling was down 0.1% at 1.33 against the US dollar shortly after the London market closed, with the pound up 0.1% versus the euro at 1.128.

The price of oil was 0.2% lower at 64.52 US dollars a barrel, as traders closed their positions in preparation for the Christmas holidays.

In UK stocks, betting giant GVC was the biggest faller on the second tier after sealing a £4 billion takeover of high street bookmaker Ladbrokes Coral.

The move follows the announcement earlier this month that the pair were in “detailed” discussions over a cash and shares tie-up.

Under the terms of the takeover, GVC will own around 53.5% of the enlarged group and its chief executive, Kenneth Alexander, would take the reins.

The duo said the combination will result in cost savings of at least £100 million a year.

Shares in GVC dropped 21.5p to 912.5p, while Ladbrokes Coral rose 2.5p to 176.5p.

Troubled infrastructure group Carillion showed little movement on the London market despite striking an agreement with its lenders to defer a crucial financial covenant test.

Shares were flat at 17.25p as the test date was shifted from December 31 to April 30 next year.

The HS2 contractor issued its latest profit warning in November and said it will breach its debt covenants, which resulted in another share price collapse.

At the time, the firm said annual profits are set to be “materially lower than current market expectations” as it grapples with a string of delays and smaller-than-expected improvements to margins on certain contracts.

The biggest risers on the FTSE 100 Index were Next up 164p to 4,579p, Reckitt Benckiser up 113p to 6,833p, Severn Trent up 32p to 2,142p, easyJet up 18p to 1,445p.

The biggest fallers were Ashtead down 33p to 1,944p, G4S down 4.2p to 260.1p, Glaxosmithkline down 18p to 1,302p, Mediclinic International down 7.5p to 622.5p

Press Association

Today's news headlines, directly to your inbox every morning.

Editors Choice

Also in World News