Britain's FTSE steadies as earnings in focus, GKN tumbles
Milan: The UK’s top share index steadied on Thursday as a handful of earnings updates were in focus and GKN (GKN.L) plunged on uncertainty following the ditching of its CEO designate.
By 0945 GMT, the FTSE was 0.07 percent up at 7.377,79 points with gains in the healthcare and consumer sectors offset by weaker commodity stocks. Midcaps .FTMC were up 0.41 percent.
GKN said its CEO-designate Kevin Cummings was leaving the engineering firm after the aerospace division he used to run took a surprise writedown.
The shares were down 7.7 percent, after falling as much as 12 percent to their lowest level in 16 months.
“After such upheaval, it is not clear what the next stage in GKN’s development will be, but it could be profound change,” analysts at Jefferies said in a note.
Among the top fallers on the FTSE were also Mediclinic (MDCM.L), down 4.9 percent, after South Africa’s largest private hospital group reported an 11 percent drop in first-half underlying profit.
Royal Mail (RMG.L) fell 1 percent, reversing initial gains following results.
Strong growth at its European parcels business helped the company to beat first-half profit forecasts, though it warned an ongoing labour dispute could hit its second-half performance.
“More of the same from Royal Mail with good growth in parcels and GLS (General Logistics Systems) while letters are in freefall decline: yet more evidence of the structural problems it faces as it heads into the key Christmas trading period,” said ETX Capital analyst Neil Wilson.
But well-received earning updates lifted shares in private equity firm 3i Group (III.L) and property company British Land (BLND.L) which rose both more than 2 percent.
Data showing that British retail sales recorded their first year-on-year decline since 2013 last month had no impact on the main benchmark indices.
Worries over a slowing British economy has discouraged some investors from taking exposure to domestic stocks, as households battle with fast-rising prices and Brexit talks drag on.
“We don’t have a huge exposure but I think it’s fair to say the UK domestic plays are finding the environment far tougher than for the Europeans on the continent,” said Andrew King, head of European equity strategy at BNP Paribas Investment Partners.
“The UK economy is struggling a bit undoubtedly because of Brexit concerns,” he added.