GKN and miners dig hole that traps index in red

LONDON

ENGINEERING firm GKN and miners dragged the FTSE 100 into the red yesterday, with a broker downgrade for Just Eat also weighing on London’s top flight.

The index closed down 0.13 per cent, or 9.75 points, at 7,214.76 with GKN the biggest faller, ending the day down 11p or 2.53% at 424.1p. It came after GKN rejected a final £8.1 billion takeover offer from Melrose Industries, saying it “continues to fundamentally undervalue” the engineering giant.

Melrose shares closed 4.9% lower at 213.5p, making it one of the worst performers on the FTSE 250. Miners Randgold and Fresnillo were also among the fallers on the top flight as they tracked metal prices lower, both falling around 0.8%.

Shares in Just Eat also took a knock following a downgrade from Deutsche Bank from sell to hold. The takeaway delivery firm ended the day down 0.86% at 781.6p.

Fiona Cincotta, senior market analyst at City Index, said: “Dominating the loser board were the likes of GKN following another hostile bid from Melrose, and Just Eat following a broker downgrade. Precious metal miners Randgold and Fresnillo were also among the fallers tracing metal prices lower, as investors ditched safe havens such as gold in favour of riskier assets.”

Low-cost airline easyjet topped gainers, closing 2.85% higher at 1,607.5p after Credit Suisse raised its price target for the company.

In currency markets, the pound was trading higher against the US dollar, up 0.3% at 1.397, and rose 0.2% versus the euro to 1.127. Sterling could be set for another rocky ride today when Chancellor Philip Hammond delivers his Spring Statement.

While no surprises are expected, any clues on how a future Brexit trade agreement could affect the British economy could see the pound react.

The Office for Budget Responsibility is also expected to revise its growth forecasts, as well as borrowing outlook.

Across Europe, the French Cac 40 closed marginally higher by 0.04% while the German Dax ended the day up 0.6%.

Brent crude prices dipped to around $64.29 per barrel from $65.22 on Friday.

IN UK stocks SSE, which is in the midst of a merger with fellow Big Six firm Npower, closed down 1.87% at 1,233.5p. It came as Npower revealed an operating loss of £56 million last year and said that 155,000 customers deserted it.

Npower’s parent firm Innogy could itself be broken up as part of a deal between its parent RWE and E.ON, putting the spotlight on the deal to merge with SSE. But SSE said it does not believe that the merger should be affected.

The biggest risers on the FTSE 100 were easyjet up 44.5p to 1,607p, Pearson up 15.6p to 767p, Evraz up 11.4p to 448.5p and Admiral Group up 31.5p to 1,945.5p. The biggest fallers on the FTSE 100 were GKN down 11p to 424.1p, NMC Health down 76p to 3,438p, Reckitt Benckiser down 113p to 5,697p, SSE down 23.5p to 1,233.5p and Rolls Royce down 14.8p to 911p.

NEW YORK

THE S&P 500 and the Dow Jones Industrial Average slumped yesterday as the US tariffs signed into law last week by President Donald Trump weighed on industrials, though gains in tech stocks boosted the Nasdaq.

Shares of companies such as Boeing, down 2.9 per cent, and Caterpillar, down 2.4%, have been under pressure as Trump’s protectionist stance on steel and aluminium imports could increase costs and hamper sales abroad.

Trump last week softened his stance on tariffs by exempting Canada and Mexico, and negotiations were ongoing with the EU and Japan.

“The big multinational, industrial companies of the world are all taking a hit on the concern that they will be the targets of reprisal sanctions,” said Robert Phipps, a director at Per Stirling Capital Management in Austin.

Concerns about possible fallout from the tariffs largely supplanted optimism, based upon the modest wage growth numbers from Friday’s employment report, that the Federal Reserve would stick to its projected three interest-rate increases in 2018.

Still, those numbers indicate a positive outlook for stocks despite yesterday’s losses, said Anwiti Bahuguna, of Columbia Threadneedle in Boston.

The Dow Jones fell 157.13 points to 25,178.61, the S&P 500 lost 3.55 points to 2,783.02 and the Nasdaq Composite added 27.52 points to 7,588.33.