Leading shares are edging lower as investors again pause for breath after this week’s attempt at a new record.
Airlines are among the main fallers after easyJet, down nearly 7% at 934.5p, warned its full year profits would drop by around 28% this year after security concerns hit travel and the slump in the pound cost it £90m. British Airways owner International Airlines Group is down 2% at 388.5p.
Also among the losers is medical group Smith & Nephew, down more than 3% at £12.21. Its shares have gone ex-dividend but it has also been hit by a downgrade from analysts at Berenberg. They moved from buy to hold and cut their price target from £14.85 to £13.40, saying:
Smith & Nephew has gradually de-emphasised its slower growth areas and implemented various cost-savings measures, reinvesting the proceeds in faster growth areas of the business. However, the success of this strategy has been largely offset by various missteps and one-off headwinds, a trend we expect to continue. We have therefore become more cautious about the company’s organic revenue growth outlook, as well as on margins and earnings growth.
Tesco is down 4.05p at 203.05p on profit taking following its well received update on Wednesday.
Overall the FTSE 100 is down 9.98 points at 7023.27, ahead of the start of the IMF and World Bank annual meetings and - the remaining piece of important data for the week - the US non-farm payrolls on Friday.
With a US rate rise this year still a possibility and hopes that Deutsche Bank can find its way out of its current travails, banking shares are among the main gainers. Royal Bank of Scotland has risen 3.4p to 187.2p while Barclays is 1.45p better at 173.9p. Lee Wild, head of equity strategy at stockbroker Interactive Investor, said:
Much better-than-expected services data out of the US Wednesday makes a December interest rate hike there more likely, which is great news for financial stocks. Banks were stronger in Asia, too, as traders bet that Deutsche Bank would not go under following reassuring comments from IMF officials in Washington. Shrinking oil stockpiles in the US have also sent Brent crude toward $52 a barrel, whetting appetite for risk assets like equities.
Wall Street was up overnight, but Friday’s monthly jobs data is the major focus for the rest of this week. Expect trouble if the number comes in below 150,000.
GKN is leading the index at the moment, up 6.9p at 338.1p as HSBC analysts started coverage with a buy recommendation and a 395p target price.
Among the mid-caps BTG has jumped nearly 7% to 691p after the healthcare group said current exchange rates meant its profits would now be ahead of its previous guidance of £510m to £540m. In a hold note Numis said:
The statement is relatively light on detail but highlights a good performance in Specialty Pharma and Licensing. Interventional Medicine remains the fastest growing division led by the Oncology, tempered by the steady progress in Varithena and a decline in sales for PneumRx.
But homeware retailer Dunelm has dropped 30p to 827.5p after it reported a 1.8% fall in first quarter sales due to unusually warm weather hitting demand.
