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London open: Stocks nudge down as WPP tumbles after interims
London stocks nudged lower in early trade on Wednesday as investors digested a disappointing set of interim results from advertising giant WPP.
At 0825 BST, the FTSE 100 was down 0.1% to 7,371.76, while the pound was 0.1% lower versus the dollar at 1.2813.
Spreadex analyst Connor Campbell said: “Having briefly grazed 7,400 the FTSE once again was in retreat, falling 15 to 20 points after the bell. The UK index has been unable to substantially break through, and hold above, 7400 in almost a fortnight, investors struggling to justify such a climb when macro-nightmares like the tensions between the US and North Korea are still unresolved.
“Not all of the FTSE’s losses were macro-focused, however – well, at least not directly. Much of that drag came from Martin Sorrell’s WPP, which plunged this Wednesday after the advertising giant was forced to cut its full year forecasts.”
WPP tumbled after it reported slightly weaker-than-expected top and bottom line growth at the half year stage and cut its growth forecast for 2017.
Subprime lender Provident Financial was under the cosh again after taking a beating on Tuesday on the back of a profit warning, the withdrawal of its dividend and news that its chief executive was leaving. The stock was downgraded by Barclays, JPM and Citigroup on Wednesday.
On the upside, Tesco edged higher after saying it will open a compensation scheme for eligible shareholders and bondholders who were misled by a trading statement in august 2014 that overstated the company’s half-year profits.
Playtech ticked up as it said it has agreed to buy technology, intellectual property and certain customer assets from ACM for up to $150m as it continues to enhance its financials division’s B2B offering.
UAE-based NMC Health rallied after signing a new operations and maintenance contract for the management of Emirates Healthcare assets, comprising three brands and saying it expects full year earnings to be towards the top end of the current guidance range.
Hansteen advanced as the industrial property investor reported a 186% jump in first-half profit following the sale of its German and Dutch portfolio.
BGEO nudged just a touch higher after its JSC Bank of Georgia signed a one-year $75m club trade finance facility arranged by Citi in collaboration with the bank’s long-term partner international financial institutions Asian Development Bank and International Finance Corporation.
Vedanta Resources was in the black after it said first-quarter earnings and revenue were “significantly higher” on the back of higher commodity prices and volumes, while Meggitt was boosted by an upgrade to ‘buy’ at Jefferies.
There are no major UK data releases due but Markit’s eurozone manufacturing and services PMIs are at 0900 BST, while US manufacturing and services figures are at 1445 BST, with new home sales data at 1500 BST.
