The Daily Telegraph

FTSE laggards enjoy ‘dead cat bounce’ ahead of Jackson Hole

- TOM REES MARKET REPORT

PROFIT warning hit laggards Provident Financial, WPP and Carillion enjoyed a rare rally in London yesterday as investors nervously awaited the Jackson Hole central banking conference.

While analysts have urged investors to tread with caution regarding the recent fallers, the stocks were buoyed by “dead cat bounces” – the old investor adage that stocks or even a dead cat will bounce if dropped from high enough – with Provident leading the FTSE 100 for a second day. The doorstep lender regained a further 87p to 748p, although its shares are still down 57pc since Tuesday’s profit warning, scrapped dividend and chief executive departure.

Constructo­r Carillion, another company to dive on a similar triple hit of bad news last month, pushed back up 4.4p to 47p. The company’s shares – which were trading above 200p in June – plunged to their lowest ever level on Tuesday after it disappoint­ed investors who had been hoping for an update by saying they would have to wait until the end of September for its interim results.

Blue-chip advertisin­g giant WPP meanwhile climbed 42p to £14.62 as the firm quickly regained ground after Wednesday’s profit warning and

worsening sector outlook. Elsewhere, British

American Tobacco’s heavy weighting pulled up the FTSE 100 most, the cigarette maker gaining 111.5p to £48.40 as it made another step into the e-cigarette market by expanding its Glo range throughout Japan.

The FTSE 100’s batch of standout risers helped the index jump 24.41 points to 7,407.06 and outperform its counterpar­ts in Europe as investors awaited key clues on monetary policy in speeches by US Federal Reserve chair Janet Yellen and ECB president Mario Draghi at Jackson Hole. Fears that Dixons

Carphone’s 23pc share price plunge due to second quarter struggles were a canary in the coal mine for the retail sector sent Marks

& Spencer and Next sliding 6.2p to 316.4p and 52p to £41.04, respective­ly, while no-frills airline easyjet retreated 56p to £12.14 on a broker downgrade from Exane BNP Paribas. Dixons ended down 54.5p at 180.8p.

On the FTSE 250, sandwich maker Greencore slipped 18p to 190p despite attempting to reassure investors over its recent share price weakness. The company, which fell 4.7pc on Tuesday and had drifted down 11pc since issuing its most recent trading update in late July, said that it was not aware of any developmen­ts that could pull down its share price. Finally, retailer Game

Digital surged a further 4p to 37.3p on Wednesday’s better-than-expected sales growth, bringing its two-day rise to 52pc.

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