Falling gold prices and weak earnings weigh on FTSE 100
AFTER a record trading week the FTSE 100 rally sputtered to a halt yesterday.
The blue-chip index recorded one of its strongest weeks of year, including a record high of 7,382.9 points on Wednesday and a new intraday high of 7,394.61 on Thursday. However by yesterday’s close the index slipped back 8.09 points to 7,374.26.
The lacklustre end to the week kept eyes firmly on the US markets where Snapchat owner Snap followed its stratospheric debut with further gains. Snap, which listed at $17 a share, climbed by a whopping 44pc in its first trading day and defied its critics by climbing over 14pc yesterday to over $28.
Equity analysts are lining up to caution tech-hungry investors with an appetite for an early stake in the company after Snap revealed net losses of $514m in 2016. But the rally continued in early trade, fuelled by news that NBC Universal said it had invested $500m (£407m) in Snap at the flotation.
The FTSE 100 was held back by a flurry of disappointing company updates and weaker mining shares but the pound’s sevenweek lows against the dollar helped to stem losses by luring foreign investors in.
Advertising giant WWP led the index lower with losses of 7.5pc to £17.67 and miner Fresnillo traded down almost 3pc to £14.13, tracking the falling price of gold. Saxo Bank’s Ole Hansen said gold prices crashed by 3pc in a matter of minutes on Thursday and continued lower yesterday ahead of a speech from US Federal Reserve chairman Janet Yellen, which was expected to usher in another rise in US interest rates.
Rising financial shares also helped buoy the market. Standard Life climbed by almost 2pc to 379p, while Old Mutual rose by 1.3pc to 224p. HSBC followed with gains of 0.87pc to just below 668p.
On the FTSE 250, the biggest faller was commercial laundry group
Berendsen which lost 11.7pc to close at 820p after a profit warning overshadowed rising sales and profits in its full year results.
Berendsen warned investors that legacy issues surrounding its UK textile machinery and plants are set to sap profits in the second half of this year. Its profit guidance is now 6pc lower at £150m, down from £161.0m last year. Elsewhere, Acacia
Mining shares plunged over 10pc to just below 479p after Tanzania announced an export ban on gold and copper concentrate, affecting 30pc of their product revenues. The £1.8bn miner said it has ceased exports but is urgently seeking clarity from the Tanzanian government and will provide the market further updates when appropriate. Finally, Aim-listed
Harvest Minerals rocketed over 16pc to 13p after its house broker Beaufort Securities said the £13.4m company could prove to be worth three times its current value, and lifted its target share price to 32p.
Earlier this week, Harvest made a major upward revision to its Brazilian fertiliser project at the Maximus prospect, updating the market with a 37pc increase to its high-grade resource.