Sell in May and go away? Leading shares fell back on Friday, the last trading day of May, after a late sell-off, but over the month they have just about proved that old City adage wrong.
The FTSE 100 finished down 56.49 points on the day at 6984.43, but during May it edged up 23 points or 0.34%. Just about enough to keep investors in positive territory.
Worries about Greece - a major factor on Friday as time runs out for a deal with its creditors and more of those involved openly talk about the prospect of the country leaving the eurozone - limited the monthly rise, as did uncertainty about when the US would raise interest rates. A poor set of economic data from the US, including a 0.7% contraction in first quarter GDP, only served to confuse the issue further.
But the FTSE 250, which is less globally biased, reached new highs in May after the surprise victory by the Conservatives in the UK election, albeit losing 116.12 points on Friday as part of the general market decline to close at 18,120.88.
Back with the FTSE 100, and Primark owner Associated British Foods was the day’s best performer, adding 78p to £30.28 as Goldman Sachs moved its recommendation from sell to buy, partly on the prospects for the discount fashion chain in the US.
Weir rose 48p to £20.24 after Credit Suisse raised its price target from £19.15 to £22.05. The bank said:
We upgrade 2016 and 2017 earnings per share by 9% and 8% driven by an improving outlook for Weir oil and gas. 2015 now represents the trough for group earnings.
Miners were mixed, with copper under pressure on reasonable inventories, but supported to some extent by hopes that China would introduce further stimulus measures to boost its economy.
So Anglo American dipped 9p to £10.26 after JP Morgan Cazenove cut its price target from 980p to 950p.
But with gold and silver edging higher, Randgold Resources rose 53p to £47.35 and Fresnillo was 19p better at 759.5p.
Vodafone, which has been in demand after suggestions it could do a deal with John Malone’s Liberty Global, added 1.65p to 255.35p after Jefferies raised its target price on the mobile operator from 226p to 230p with a hold recommendation.
Weak UK consumer figures from Gfk hit retailers, with supermarket group Morrisons down 6p at 171p ahead of its annual meeting next week.
Synergy Health dropped 72p to £18.23 after the US Federal Trade Commission filed a lawsuit to block its proposed $1.9bn merger with Steris Corporation. Both companies said they were disappointed and would challenge the FTC’s decision. Numis analysts said:
We are surprised by the FTC’s stance; perhaps further details could be forthcoming once the formal FTC announcement is published. In the absence of a deal, we believe that Synergy’s fundamental value is 1,500-1,600p a share.
