MARKET REPORT
SHARES in BAE Systems powered ahead on Monday after the firm escaped a potential earnings blow when the High Court ruled the UK could continue selling arms to Saudi Arabia.
Two judges in London decided the Secretary of State for International Trade had not acted unlawfully or irrationally in refusing to block export licences for the multibillion sale and transfer of arms and military equipment.
The British defence giant, which generates more than £3bn of its revenues from business with the Arab nation, rose 12.5p to 630p. The wider FTSE 100 Index climbed 19.11 points to 7,370.03.
Across Europe, Germany’s Dax and the Cac 40 in France both closed 0.5% higher.
On the currency markets, the pound was marginally lower against the US dollar at 1.288 and flat versus the euro 1.130. The greenback continued to strengthen following better-than-expected US non-farm payrolls data on Friday, which showed 222,000 new positions were created in June.
The oil price endured another choppy session, falling in early trading before swinging to a 1% rise at US $47.19 a barrel. David Madden, market analyst at CMC Markets UK, said traders have “less faith” in Opec’s ability to curb oil production and support prices despite pledging to tackle the global supply glut.
In UK stocks, Carillion’s price crashed after the construction and infrastructure giant downgraded its annual revenue guidance in a halfyear trading update, with sales now expected to be between £4.8bn-£5bn and its overall performance forecast to be “below management’s previous expectations”.
Following a review carried out by KPMG, the FTSE 250 firm said it will book an £854m provision linked to certain UK and overseas contracts. A total of £375m relates to the UK and £470 million to overseas markets in the Middle East and Canada.
Shares in the firm fell 39%, or 75p to 117.1p.
The biggest risers on the FTSE 100 were Schroders up 68p to 3,225p, BAE Systems up 12.5p to 630p, BHP Billiton up 21p to 1,263.5p, Anglo American up 17p to 1,068p.
The biggest fallers were Shire down 138p to 4,186.5p, Next down 73p to 3,693p, Provident Financial down 42p to 2,330p, Marks & Spencer down 5.5p to 339p.