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London open: Stocks rise but Provident Financial tanks on profit warning
London stocks rose in early trade as well-received results from the likes of Persimmon and BHP Billiton helped to offset another profit warning from sub-prime lender Provident Financial.
At 0830 BST, the FTSE 100 was up 0.6% to 7,365.34, while the pound was down 0.3% against the dollar at 1.2868.
Shares in FTSE 100-listed Provident Financial tanked as it issued its second profit warning in two months and announced the resignation of its chief executive and the withdrawal of its dividend as the rate of progress in the turnaround of the home credit business has been “too weak”.
Petrofac slipped after announcing the sale of its 50% stake in the Panuco oil field in Mexico to Schlumberger, while Wood Group nudged down following weaker-than-expected first-half earnings.
Nevertheless, there were a number of bright spots on the corporate front helping to propel the FTSE higher.
Housebuilder Persimmon gained ground after it reported a 30% improvement in its profit before tax in the six months to 30 June on Tuesday, to £457.4m.
BHP Billiton rallied as it said it swung back to a profit for the full year and upped its final dividend, while Antofagasta advanced after posting a jump in earnings for the first half as revenues rose amid higher copper prices.
Cairn Energy edged higher after saying it swung to a profit in the six months to the end of June.
On the macroeconomic calendar, public sector net borrowing figures are at 0930 BST, while the CBI industrial trends survey is at 1100 BST.
CMC Markets analyst Michael Hewson said: “Today’s borrowing numbers for July are expected to show a modest increase of £0.2bn, a significant improvement on June’s £6.9bn, helped by improved tax receipts.
“We’ll also get a look at the latest CBI industrial orders data after an extremely positive number in July boosted confidence in the manufacturing sector, and showed output growing at its fastest rate since the mid-1990s. August is expected to show a slight slowdown to 8 from 10 in July, but nonetheless is expected to largely sustain the positive trend seen a month ago.”
Investors will also be looking ahead to the annual banking conference in Jackson Hole, which kicks off on Thursday.
