Britain’s FTSE under pressure as Sage sinks

Hammerson drops after Klepierre abandons bid

– A plunge in software firm Sage’s shares put pressure on Britain’s top share index on Friday, while a rising pound weighed on big overseas earners.

The blue chip FTSE 100 index closed up 0.1% and posted a weekly gain –1%– for the third time in a row, its best winning streak since early January as the focus turns to the upcoming first quarter earnings season.

Shares in Sage were down 8.1%, recouping some earlier losses, after the company cut its full-year revenue growth forecast after software subscription growth slowed in the first half.

“It’s not great to hear as you move into earnings season, and tech is a key sector. It’s one that created an element of volatility recently and it is the future,” Mike van Dulken, head of research at Accendo Markets, said.

“Perhaps [there’s] an element of [Sage] being penalized because it’s one of the first few to come out with results, secondly because it’s the tech sector and everyone’s hungry to know that tech is doing okay,” van Dulken added, pointing to a big fall in peer Micro Focus’ shares in March after a profit warning.

Micro Focus was one of the biggest FTSE gainers this session, up 3.2%, extending Thursday’s gains following a report that hedge fund Elliott Management had taken a stake in the British software firm.

Shares in paper-maker Mondi rose around 2.9% on readacross from Finnish peer Stora Enso, which soared after beating first quarter expectations.

Outside of the blue chips, shares in Hammerson tanked 9% after France’s Klepierre dropped its takeover bid for the British shopping center owner.

Hammerson’s shares gave up the bulk of the gains made since Klepierre’s indicative bid back in March, which Hammerson rejected.

European equity markets, along with the FTSE, remained muted at the end of a week dominated by geopolitics and lingering concerns over global trade.

The geopolitical tensions have focused on Syria, after US President Donald Trump threatened missile strikes in response to a suspected poison gas attack, prompting worries over a confrontation with Russia, Syria’s main ally.

On Friday precious metals mining companies were in demand, with shares in Randgold Resources and Fresnillo up more than 1%as the price of gold, considered a safe-haven asset, remained firm.

A stronger pound was another drag on the FTSE, hitting shares in companies which earn a big chunk of their earnings overseas, such as British American Tobacco.

The Bank of Israel on Friday set its representative rate for the British pound at NIS 5.0105.