Britain's FTSE falls as trade war escalation looms; Centrica shines

06 Sep, 2018

The FTSE 100 ended the session 0.9 percent down at 7391.65 points, a roughly five-month low that represents a decline of about 4.8 percent since the start of the year.

With little to gnaw on in terms of economic indicators or policy announcements in Europe, "investors are just going to have to sit and stew in this particularly unpleasant trading broth", said Spreadex analyst Connor Campbell at the beginning of the session.

A negative opening on Wall Street, with a fall of internet stocks on the Nasdaq, served to darken the mood.

Some of the biggest losses on the FTSE had been exacerbated the fact that some stocks were trading ex-dividend, which trimmed 9.24 points off the FTSE 100, Reuters calculations show.

In that vein, BHP Billiton and Admiral Group lost 4.5 percent and 1.8 percent respectively.

Centrica, meanwhile, posted the best performance with a 5 percent gain.

The energy supplier's jump in value came as Britain's regulator proposed a price cap on default energy bills to save households about a billion pounds ($1.3 billion) a year. It aims to implement the cap in time for winter as the government seeks to deliver on a promise to tackle "rip-off" prices.

"A price cap that will limit the amount Centrica's British Gas operation can charge customers hardly seems like cause for celebration, but the key point is that it will address the uncertainty that has dogged the stock in the last couple of years", said Russ Mould, an investment director at AJ Bell.

"There's nothing the market hates more than a lack of clarity, and now the level of the price cap is known analysts can reflect it in their earnings estimates."

Centrica was not the only company to benefit from the announcement of the new regulation. The sector as a whole added more than 3 points to the FTSE index.

Turnaround specialist Melrose Industries chalked up a 3.7 percent gain in its share price after saying it has made significant progress in reorganising engineering group GKN since its hostile 8 billion pound takeover.

Shares in Dixons Carphone, the troubled British electricals and mobile phone retailer, were up 1.5 percent after it said it was on track to hit full-year profit targets.

Copyright Reuters, 2018
 

 

 

 

Read Comments