Traders hold their fire as talks on Britain’s EU future drag on
TRADERS of London-listed stocks remained cautious yesterday, as they awaited the outcome of talks on an EU referendum.
The FTSE 100, which closed before any concrete agreements were made in Brussels, slipped 0.4pc, or 21.72 points, to end the week at 5,950.23.
Ipek Ozkardeskaya, a London Capital Group analyst, said the “political risks are hard to price in at the moment”.
“There is clearly little appetite in building fresh long, or short positions before more clarity on the issue,” she added.
Despite falling yesterday, blue-chips managed to climb by nearly 4.3pc over the course of the week, clawing back ground lost during the preceding fortnight’s turbulence.
“Market jitters are once more emerging to undermine the bullish sentiment that had us on course for the best week for three months,” said Joshua Mahony, of IG. Bottling company Coca
Cola Hellenic managed to overcome the gloomy trend, rising by 2.8pc to 953.5p after reporting that profits rose above analyst expectations. The company also announced a return to growth for the first time in five years in its most established markets.
ITV also ended up near the top of the table, rising by around 1pc to 252.2p. The broadcaster was boosted by rumours it could be the target of a potential takeover bid, as well as positive commentary from broker Liberum. Ian Whittaker, a Liberum analyst, said an ITV advertiser believed that the TV market and ITV in particular would hold up well, and enjoy “another good year in 2016”.
Mr Whittaker added: “ITV was still seen to deliver at an attractive price and there was certainly no feeling that advertisers are shifting their money aggressively out.”
Near the bottom of the pile, Sports Direct lost more than 2.4pc, closing at 400p. The sportswear retailer was knocked by an update from Jefferies, as the broker argued that taking the company private “makes sense” in order to avoid public scrutiny of its governance problems.
Mike Ashley, who owns a majority stake in the FTSE 100 retailer, has seen the shares lose more than 50pc of their value since September.
“Mr Ashley should consider taking Sports Direct private given the group’s free cashflow generation and underleveraged balance sheet,” said Jefferies. In the FTSE 250, shares in
Indivior came crashing back down after the previous day’s huge gains. The pharmaceutical company was the index’s biggest loser, down 9.7pc to 154.5p after a jump of 15.8pc the day before.
Deutsche Bank analysts pinned Thursday’s dramatic rise on the ability of the company to “not disappoint coupled with upbeat commentary around the ongoing litigation” the business faces.
The outcome of a court ruling in April on a patent owned by Indivior will determine whether the company loses exclusive rights to produce one of its main treatments.