FTSE close: Rolls-Royce, Capita fall; ARM up

By Ed Monk for Thisismoney.co.uk
Updated:

 

17.00 (close)

Dealers monitor their screens on the trading floor of IG Index in London

Friday feeling: Shares may halt their rally this morning.

China's efforts to control inflation and uncertainty over the progress of Ireland's debt rescue combined to unsettle world markets today.

The FTSE 100 Index rallied 76 points on Thursday but finished 35.9 points lower at 5732.8 today as investors worried about the state of the Irish talks, which are key to stabilising Europe's financial system.

In particular, the potential for deadlock over the future of Ireland's low rate of corporation tax has been blamed for the end of recent market relief over an aid package likely to run into tens of billions of euros.

US markets were also on the back foot after China's monetary authorities ordered banks to hold back more money as reserves in a new move to curb lending and cool inflation.

The action came as Beijing tried to restore normal financial conditions and curb inflation, which rose to a 25-month high of 4.4% last month.

The potential restraint on growth put pressure on mining stocks as Kazakhmys dropped 20p to 1450p and Eurasian Natural Resources dipped 17p to 910p.

Currency markets were mixed, with the euro recovering from recent weakness to gain against the pound, which in turn was down against the dollar at 1.59.

Rolls-Royce shares remained under pressure after Airbus said it would seek "full financial compensation" from the engine maker following the disruption caused by the blow-out of a Qantas A380 engine. The stock, which peaked for the year at 661p on November 1 before dropping as low as 563p, was off 11.5p at 592p today, a fall of nearly 2%.

The Irish uncertainty contributed to a poor session for London's banking stocks, with Lloyds Banking Group down 1.1p at 66.7p and Royal Bank of Scotland off 0.2p at 41.8p. HSBC dropped 9p to 657.5p, while Standard Chartered was another faller, down 49p to 1803p, as investors worried about the impact of China's monetary strategy on the Asian-facing bank.

One of the biggest top flight falls of the session came from Capita Group after Thursday's admission that pressure on public spending will dent sales more than it had previously expected. The outsourcing firm lost another 2% or 13p to 677p after dropping 4% yesterday.

In a quiet session for corporate results, pubs and brewing firm Fuller Smith & Turner advanced 2% or 13.5p to 626p after it reported an 11% hike in half-year profits and said it was hopeful that its focus on the south of England will help shield it from much of the impact of Government spending cuts.

The solid update helped fuel a gain of 7% for Enterprise Inns, which encouraged investors with signs of a trading turnaround earlier this week. Enterprise shares were up 6.8p at 106.6p.

The biggest FTSE 100 risers were ARM Holdings up 14.3p at 384.9p, Man Group ahead 10.9p at 295.1p, Essar Energy up 12p at 518.5p, International Power ahead 8.5p at 436.8p.

The biggest fallers were Sage Group down 8.2p at 261p, Standard Chartered off 49p at 1803p, Marks & Spencer down 9.6p at 380.6p and SABMiller off 42.5p at 2114.5p

16.10 Shares in Aga Rangemaster Group fell 2% after the cooker maker warned that its markets looked tough and uncertain.

But the firm said it would meet this year's forecasts after a seasonal increase in sales. The stock dropped 1.75p to 80.25p.

Austonomy Corporation, the main gainer this morning, gave back some ground later on but was still up 16p at 1,415p. Sentiment towards the technology sector has been strengthened by upbeat results from US computer maker Dell.

The FTSE 100 managed to trim its losses and was 36.51 points down at 5,732.20 as it headed towards the week's close.

14.40

The US Dow Jones index opened 34.36 points lower at 11146.87 as investors digested the news about China's attempts to put the brakes on lending and inflation.

The FTSE 100 is sitting 63.34 points down at 5,705.39.

14.15 Small caps update:

Faroe Petroleum, the oil and gas explorer, dropped 5.5p to 173.25p after raising £62.2m in a discounted share sale. The funding is to pay for recent finds and to buy new production assets.

Shares in Biocompatibles leapt by 16%, up 53.5p at 390p, after BTG announced it was buying the medical technology firm for around £177.2m

The FTSE 100 is now trading down 62.82 points at 5,705.89.

13.00

A lunchtime update - The FTSE 100 has fallen steadily as miners and the banks suffer from uncertainties in China and Ireland.

At 1pm the Footsie is 76.32 points lower at 5692.39.

Chinese monetary authorities today ordered banks to hold back more money as reserves in a new move to curb lending and cool inflation.

The action came as Beijing tries to restore normal financial conditions and control inflation, which rose to a 25-month high of 4.4% last month.

The potential restraint on growth put pressure on mining stocks as Rio Tinto fell 80p to 4201p, Kazakhmys dropped 28p to 1442p and Eurasian Natural Resources dipped 14.5p to 912.5p.

Meanwhile, the potential for deadlock over the future of Ireland's low rate of corporation tax has been blamed for the early end to recent market relief over an aid package likely to run into tens of billions of euros.

The Irish uncertainty contributed to a poor session for London's banking stocks, with Lloyds Banking Group down 1.6p at 66.2p and Royal Bank of Scotland off 0.1p at 41.9p.

In a quiet session for corporate results, pubs and brewing firm Fuller Smith & Turner advanced 2% or 10.5p to 623p after it reported an 11% hike in half-year profits and said it was hopeful that its focus on the south of England will help shield it from much of the impact of Government spending cuts.

The solid update helped fuel a gain of 2% for Enterprise Inns, which encouraged investors with signs of a trading turnaround earlier this week. Enterprise shares were up 2.25p at 102.1p.

11.20

We've got more on Capita, which has admitted to underestimating the impact of government spending cuts but promised not to echo rival Serco by punishing its suppliers.

The outsourcing company is now down 3.7%, after shedding 25.50p to trade at 664.5p.

The FTSE 100 has headed lower too and is down 53.92 at 5,714.79.

09.50:

The FTSE 100 is heading down at the end of a rollercoaster week, with miners falling on lower commodity prices and Capita suffering amid cutbacks on government contracts.

The Footsie rose first thing but has fallen away. At 9.45am it sits 31.42 points lower at 5737.29.

London shares are heading into the weekend on a downward trajectory after big swings this week thanks to speculation of a bailout in Ireland and China's next moves to attack rising consumer prices. The Blue-chip index has lurched from a high of 5382 on Monday to a low of 5659 on Thursday.

The FTSE 100 Index posted a gain of 76 points yesterday but slipped today after lower commodity prices led to falls for mining firms. Those stocks heading south included Rio Tinto, which dropped 81p to 4200p.

The biggest top flight fall of the session came from Capita Group after Thursday's admission that pressure on public spending will dent sales more than it had previously expected. The outsourcing firm lost another 2% or 15.5p to 674.5p after dropping 4% yesterday.

In a quiet session for corporate results, pubs and brewing firm Fuller Smith & Turner advanced 1% or 7.5p to 620p after it reported an 11% hike in half-year profits and said it was hopeful that its focus on the south of England will help shield it from much of the impact of Government spending cuts.

The main gainer this morning was Autonomy Corporation, up 41p, or 3%, as rumours of an acquisition swirled.

In currency, Sterling dipped against the euro on Friday as anticipation of aid being agreed to help ease Ireland's debt woes buoyed the single currency.

In a quiet day for UK news, sterling is expected to be driven by what could be choppy movements in the euro as investors watch for more details on talks over any EU/IMF loan package.

Against the dollar, however, sterling extended gains after breaking back above $1.60 on Thursday, continuing to ride on the back of gains in euro/dollar.

The pound was weaker against euro at €1.1739. Against the dollar, sterling was up at $1.6084.

Reader service: Free brochure guides

Completely free insider guides on the latest investing trends...

sterling stacked on a financial chart

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Most watched Money videos