FTSE close: Severn, UU gain; Shell, Cairn fall

By Ed Monk for Thisismoney.co.uk
Updated:

 

17.20 (close)

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

Friday feeling: Poor job figure data coming from the US

Figures showing a disappointing month for job creation in the American economy failed to derail the London market today as the FTSE 100 index finished the week near to the 6000 barrier.

The top flight closed up 14 points at 5997.4, helped by a strong performance from water companies after signs that the UK's inflationary bubble will boost results.

Earlier in the day it had pushed above the 6000-mark but slipped back again after the US government revealed that 36,000 new non-farm jobs were created last month, which was far below analysts' expectations of 140,000.

The pound was down against the dollar, at $1.60, despite the disappointing jobs figures, while sterling rose against the euro, at €1.19, after the latest survey by the Halifax showed a 0.8% rise in house prices in January, offsetting a sharp fall in December.

Severn Trent and United Utilities showed strong growth in the UK's top-tier, both rising 4% after Bank of America Merrill Lynch introduced buy ratings on the pair to reflect higher inflation. Severn was up 50p to 1440p and United lifted 24p to 579p.

Second-tier stocks Pennon and Northumbrian Water were raised to neutral from underperform, helping them rise 4.5p to 621.5p and 5.6p to 314.1p respectively.

Oil giant Royal Dutch Shell extended the 3% loss seen in the previous session with a 1% fall, down 32.5p to 2145p, after its fourth quarter profits and production performance left investors cold on Thursday. Other energy stocks remained in the red, with BG Group off 5.5p to 1429p.

Cairn Energy was the biggest Footsie faller, down 11.7p to 426.3p, after reports that Vedanta Resources was considering pulling out of a deal to buy a majority stake in Cairn India.

And Thomson owner TUI Travel remained under pressure due to the impact of Egypt's civil unrest on the holiday plans of thousands of customers. Shares dropped another 2p to 241p.

Outside the top flight, ITV surged 4.7p to 84.1p, as Tuesday's bullish statement on advertising revenues from RTL, Europe's largest free-to-air broadcaster, continued to have a positive impact on the stock ahead of its results in March.

And retailer HMV rose 9% or 2p to 24.8p, boosted by speculation that private equity and former retail bosses are eyeing the business for takeover.

Superdry fashion label SuperGroup was likewise on the rise, ahead 12% after a 180p rise to 1710p, as the market gave the thumbs up to its deal to buy out European franchise partner CNC Collections.

Retail rival French Connection soared 23% - up 15.8p to 84.8p - after the company said its profits for the year would be at least £6.8 million, which was comfortably ahead of City expectations and its own previous guidance for profits between £2.6 and £5.1m.

The group said its UK high street stores continued to show sales declines but this had been offset by a strong performance from its wholesale and licensing divisions.

Elsewhere, Clover maker Dairy Crest fell 4.3p to 376.3p as it became the latest group to outline inflationary pressures.

The top Footsie risers were Old Mutual up 6.3p at 133p, United Utilities ahead 24p at 579p, Severn Trent up 50p to 1440p and International Power ahead 13.9p at 427p.

The top Footsie fallers were Cairn Energy down 11.7p to 426.3p, Antofagasta off 33p to 1491p, Royal Dutch Shell B off 32.5p at 2145p and Essar Energy down 7.5p at 520.5p.

15.45: The FTSE 100 is 29 points up at 6,012.3.

The Dow Jones is struggling to make headway as the disappointing US jobs figures and the ongoing crisis in Egypt weigh on sentiment. The index is down 16.4 points at 12,045.9.

14.45:

The Dow Jones has opened slightly lower, down 8.7 points at 12,053.6, as investors analyse the mixed employment data.

France's CAC 40 is up 12.9 points at 4049.46, while Germany's DAX is ahead 10 points at 7193.7.

The FTSE 100 continues to move in a fairly narrow range this afternoon. It is up 25.9 points at 6,009.3 as the end of this week's trading approaches.

14.10:

US employment data showed fewer jobs were created in January than forecast.

Payrolls were up 36,000, against an expected rise of 140,000, as jobs growth was hampered by harsh winter weather.

However, the unemployment rate fell from 9.4% to 9%, the lowest level since April 2009.

The FTSE 100 is little changed, up 22.4 points at 6,005.7.

13.15:

Some more on those upgrades from utilities today.

Severn Trent and United Utilities gained by 4% after Bank of America Merrill Lynch introduced buy ratings on the pair to reflect higher inflation. Severn was up 59p to 1449p and United lifted 3% or 19p to 574p.

Lower-tier stocks Pennon and Northumbrian Water were raised to neutral from underperform, helping them rise 9p to 626p and 5.4p to 314p respectively.

Elsewhere, Thomson owner TUI Travel remained under pressure due to the impact of Egypt's civil unrest on the holiday plans of thousands of customers. Shares dropped another 3.7p to 239.3p.

Retail rival French Connection soared 22% - up 14.8p to 83.7p - after the company said its profits for the year would be at least £6.8m, which was comfortably ahead of City expectations and its own previous guidance for profits between £2.6 and £5.1m.

The group said its UK high street stores continued to show sales declines but this had been offset by a strong performance from its wholesale and licensing divisions.

Overall, the FTSE 100 is 22.71 points higher at 6006.05.

12.00:

The FTSE 100 is trading 23.9 points higher at 6,007.2.

In currency, the pound at 12pm was $1.6126 compared to $1.6159 at the previous close. Against the euro, the pound was at €1.1830 compared to €1.1766 at the previous close.

We have an update on Dairy Crest, which has slid 3p to 377.6p on worries about the impact of commodity price inflation.

US markets are forecast to open flat or modestly higher, with investors' focus firmly on the pending release of employment data.

Michael Hewson of spreadbetter CMC Markets commented: 'With (Ben) Bernanke reiterating last night that despite the recent improvement in economic data, the US economy still needs help from the central bank, markets will be looking for continued improvement in the jobs picture.

'Expectations are for an increase of around 140k in payrolls, and a slight increase in the unemployment rate to 9.5%.'

10.15:

The FTSE 100 rose back above 6,000 as improved sentiment on utilities helped to outweigh losses for commodity-based stocks including Royal Dutch Shell and Cairn.

The FTSE 100 was 29.96 points better off in early trade to sit at 6013.3.

American shares had set the pace overnight thanks to encouraging economic data. A key US jobs report will be the focus later today.

In London, Severn Trent leads the way after a positive broker note from Bank of America Merrill Lynch. Analysts reckon Severn Trent and rival United Utilities are both worth a 'buy' rating, up from 'hold'.

Severn Trent was 48p, or 3.5%, higher at 1,438p, and United Utilities was right behind it, 17.5p higher at 572.5p.

Shell extended yesterday's 3% loss with a further 1% fall, down 16p to 2161.5p, while other energy stocks remained in the red, with BG Group off 7.5p to 1427p.

Cairn Energy was the biggest Footsie faller, down 11.8p to 426.2p, after reports that Vedanta Resources was considering pulling out of a deal to buy a majority stake in Cairn India.

Outside the top flight, retailer HMV soared 12% or 2.75p to 25.5p, boosted by speculation that potential buyers are circling the embattled group. Private equity and former retail bosses are said to be eyeing HMV for takeover.

Superdry fashion label SuperGroup was also on the rise, ahead 4% after a 58p rise to 1588p, as the market gave the thumbs up to news of its deal to buy out European franchise partner CNC Collections.

Elsewhere, Clover maker Dairy Crest fell 8.9p to 371.1p as it became the latest group to outline soaring inflationary pressures.

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