MILAN: UK blue chip stocks rose on Wednesday, helped by gains in Marks & Spencer after its solid results and by advances in energy stocks, although weaker miners kept a lid on the British market.
The FTSE rose 0.4 percent to 7,514.90 points, while the mid-cap FTSE 250 index added 0.15 percent, just shy of a fresh record high hit on Tuesday.
The index's gains were capped by losses in basic resources stocks after a sell-off in commodities following Moody's debt downgrade on China, a big global metals consumer.
"The heavy sell-off in commodities following China's debt rating downgrade has taken its toll," Ipek Ozkardeskaya, senior market analyst at LCG, said in a note.
Rio Tinto declined 0.5 percent and precious metal miners Randgold and Fresnillo fell 1.5 and 0.4 percent respectively. Glencore lost 0.1 percent after saying it had made an informal approach to US grains trader Bunge to discuss a "a possible consensual business combination." But Bunge responded by saying it was not in talks with the mining and commodities group.
Mid-cap miner Acacia Mining fell 29.7 percent, its weakest day ever, as Tanzania's mining minister was fired following an investigation into possible undeclared exports by mining companies to evade tax.
Tanzania President John Magufuli said the investigation report revealed that Acacia, which denied wrongdoing, declared the presence of gold, copper and silver in its mineral sand exports but did not declare other precious metals in the consignments.
Marks & Spencer rose 1.5 percent, reversing earlier losses that followed the release of results showing a 10 percent drop in earnings and sliding sales in the latest quarter. The retailer said that in spite of the weaker quarter, improving profit margins and steady market share showed its struggling clothing business was on the mend.
"We think that consensus profit forecasts (for 2017-18) will hold fairly steady today, albeit with improving trends in clothing margins suggesting some potential upside for the year," said RBC Europe analyst Richard Chamberlain, who has an "outperform" rating on the stock.
But a disappointing update hit Kingfisher, which fell 7 percent. The home improvements retailer reported a 0.6 percent fall in first-quarter sales from stores open for more than a year, due to weak sales in France, where the firm remains cautious about its prospects.
Analysts at UBS had estimated sales from stores open for more than a year would increase by 1 percent, while analysts at Davy expected a rise of 0.3 percent.
Engineering firm Babcock fell 1 percent after its full-year results, while Medclinic was down 6.4 percent, after reporting a 19 percent drop in underlying full-year earnings as regulations in the Middle East weighed.
Providing support to the FTSE were gains among healthcare stocks with AstraZeneca and Shire, as well as strength among energy stocks with BP up 0.9 percent.
Among midcaps, TalkTalk was a heavy faller, down 3.2 percent after Goldman Sachs downgraded the stock to "sell" from "neutral" on valuation grounds, while Dixons Carphone rose 4.7 percent after beating fourth quarter trading forecasts.
Comments
Comments are closed for this article.