(Alliance News) - After a slow start to the session, the FTSE 100 perked up as Wednesday went on with the blue-chip index racking up some solid gains amid share price boosts from gold miner Fresnillo and bookmaker Flutter Entertainment. The FTSE 250 was also in the green as the index managed to offset another slide from Sirius Minerals, while a sharp share price drop for Burford Capital weighed on the AIM All-Share.The large-cap index was 59.83 points higher, or up 0.8%, at 7,231.52 on Wednesday. The FTSE 250 index was up 162.85 points, or 0.9%, at 19,009.05 while the AIM All-Share was down 2.2% at 876.38.The Cboe UK 100 index was up 0.8% at 12,257.96. The Cboe UK 250 was up 0.7% at 16,940.52, while the Cboe UK Small Companies was flat at 10,953.28."We're seeing a bit of a rebound in early European trade on Wednesday, with US futures also a little higher as markets take a breather from the recent sell-off," said Craig Erlam at Oanda. Global stocks have faced substantial losses over the past few sessions after the yuan breached the key CNY7.0 threshold against the dollar on Monday - days after the US announced plans to impose fresh tariffs on Chinese imports from September 1 - prompting Washington to officially brand Beijing a "currency manipulator"."It's too early to even try and associate this with any form of optimism given the events of the last week, while the size of the rebound compared to the days before gives it more an appearance of a dead cat bounce than anything else," Erlam added. "There's been a lot to digest and I wonder whether investors are simply taking a step back and doing just that."Ongoing caution was exhibited by safe haven asset gold steadily climbing to fresh six-year highs, quoted at USD1,487.10 at midday from USD1,472.50 late Tuesday.This caused Mexican gold miner Fresnillo to gain 4.5%, topping London's FTSE 100 at midday.In Paris, the CAC 40 was up 1.3% while the DAX 30 in Frankfurt was also 1.3% higher in early afternoon trade in mainland Europe.The euro was soft, quoted at USD1.1184 at midday from USD1.1195 late Tuesday, after a woeful set of figures from Germany's manufacturing sector.On a monthly basis, production was down 1.5% and year-on-year, industrial output slumped 5.2%. This compares to May's downwardly-revised monthly rise of 0.1%, which had been first reported as a 0.3% advance."The 1.5% fall in German industrial production in June kills off any hopes that the strong orders data published yesterday marked the beginning of a recovery. On the contrary, with business surveys all pointing to a further deterioration in July, things look likely to get worse before they get better," commented Capital Economics.Wall Street, following Europe's lead, is set for an upbeat start on Wednesday, with the Dow Jones and S&P 500 both pointed up 0.4% while the Nasdaq is set for a 0.7% rise.Shares in Walt Disney were down 3.4% in after-hours trade as the entertainment giant failed to meet market expectations.Disney reported a 51% fall in profit to USD1.4 billion while revenue rose 33% to USD20.2 billion, bolstered by its recent mega acquisition. The results included the recently acquired film and television assets from 21st Century Fox, which puts Disney atop the Hollywood box office as it looks to boost its share in an on-demand television battle with Netflix and Amazon.Back in London, Paddy Power and Betfair parent Flutter Entertainment was helping to push up the FTSE 100, rising 3.5% as it reported a solid interim performance in the US.For the six months to June-end, the company recorded pretax profit of GBP81 million, down 24% from the year-ago period, on revenue of GBP1.02 billion, up 18% year-on-year. US revenue in the half-year more than doubled to GBP160 million from just GBP61 million a year ago. In the UK, meanwhile, revenue slipped to GBP421.5 million from GBP426.1 million year-on-year.Dragging at the other end was Standard Life Aberdeen, down 5.0% as a reduction in outflows failed to impress investors. The fund manager recorded assets under management & administration from continuing operations of GBP577.5 billion at June 30, up 4.7% from GBP551.5 billion six months earlier.Net fund outflows totalled GBP15.9 billion versus GBP16.9 billion outflows recorded the year before, and GBP24.0 billion seen in the second half of 2018."While less negative than last year, outflows remain Standard Life Aberdeen's Achilles heel with billions of pounds of investors' money walking out the door every quarter," commented George Salmon, an analyst at Hargreaves Lansdown.He said: "That's particularly problematic because a strategic repositioning that culminated in the sale of the Phoenix business means the group is increasingly focused on asset management rather than insurance."Also firmly in the red at midday was Spirax-Sarco Engineering, down 4.7% as it pledged to improve the performance within its thermal technology unit.Spirax, which manufactures valves and pumps, recorded pretax profit of GBP108.1 million for the six months to June 30, up 1.2% from the year-ago period, on revenue of GBP591.2 million, up 8.0% year-on-year.Profit margins fell to 19.1% from 20.4% due to the disposal of the highly profitable HygroMatik business, a negative exchange impact, and the lower operating profit in the Chromalox division, Spirax said."The only disappointment of this period was a profitability deterioration in Chromalox so we have intensified work to improve its operational performance. Our original expectations for this business remain unchanged," said Chief Executive Nicholas Anderson.The FTSE 250 was also enjoying a strong session, boosted by Hill & Smith which gained 8.7% on a "much improved" interim performance. For the six months ended June, pretax profit widened 16% to GBP33.4 million from GBP28.9 million the year prior. This was after revenue rose 15% to GBP339.5 million from GBP295.4 million the year prior."Hill & Smith delivered a much-improved performance in the period over a weaker first half last year," Chief Executive Derek Muir said, adding that the company is confidence in achieving further growth.In a separate announcement on Wednesday, Hill & Smith promoted Non-Executive Director Alan Giddins to chair from the start of October. He has been a non-executive since October 2017. Giddins - a former head of private equity at 3i Group - will replace Chair Jock Lennox who is retiring. Defence engineer Ultra Electronics was in second place, advancing 8.6% after lifting its interim dividend and reporting a sharp rise in profit.For the six months ended June, pretax profit almost doubled to GBP37.9 million from GBP20.0 million the year prior. This was after revenue rose 10% to GBP387.1 million from GBP350.5 million the year before.The order book grew 4.2% to GBP1.01 billion from GBP969.2 million the year prior. Ultra proposed a 15.0 pence per share interim dividend, up 2.7% from 14.6p the year before. Spending another day as the worst mid-cap performer was Sirius Minerals, the fertiliser development firm sinking 11% to further Tuesday's 29% drop.Berenberg downgraded the stock to Hold from Buy after Sirius on Tuesday suspended a USD500.0 million secured note offering due to "current market conditions".On AIM, Burford Capital dived 56% as it defended itself from a scathing "short attack" report.Burford earlier noted a recent slide in its share price - having closed down 19% on Tuesday - and said it believes the reason for its share movement was due to the rumour of a "short attack".A short attack was defined by Burford as a tactic where sellers take a short position in a company's stock, then engage in claims about the company with the intent to spook investors, and depress the company's stock and profit from the decline.The litigation finance firm noted the release of a short attack document by US research firm Muddy Waters Capital. In the document, Muddy Waters said it had shorted Burford, on the grounds that "it is a poor business masquerading as a great one".In response to the research firm's note, Burford said it had never been contacted by Muddy Waters, but stated that its cash position and access to liquidity was strong, and that its returns were robust.Wednesday's share price move alone has wiped GBP1.4 billion off Burford's market capitalisation.London Midday is available to subscribers as an email newsletter. Contact info@alliancenews.com
1 Jul 2015 07:29
