View the article online at http://citywire.co.uk/money/article/a581626
Hays jumps on profit forecast; FTSE edges down
Shares in Hays (HAYS.L) surge after a bullish update, while Britain’s FTSE 100 wavers amid ongoing angst over Europe’s debt woes.
Shares in Hays (HAYS.L) surged on Thursday after the recruitment group forecast its full-year operating profit to be at the top end of market estimates, while Britain’s FTSE 100 wavered amid ongoing angst over Europe’s debt crisis.
Hays jumped 6.3p, or 7.7%, to 87.7p after the bullish management statement from the FTSE 250 firm, in which it also reported a 10% rise in third-quarter gross profit, beating market expectations. Its international business was a key driver of the earnings, representing 70% of net fees in the quarter, Hays said.
‘Given that we are now in a more normal recruitment market recovery phase, with temporary placements leading the way, Hays is well-placed to benefit,’ said Kevin Lapwood, analyst at Seymour Pierce, as he upgraded the broker’s rating for the stock to ‘hold’ from ‘sell’.
He added: ‘The UK and Europe (excluding Germany) remain a worry, but this is reflected in the current rating.’
Italy debt auction
Meanwhile, the UK index of blue-chip shares weakened 0.15%, or eight points, to 5,627 and the All Share index gave up 0.06%, or two points, to 2,930. See the FTSE’s performance and the index’s top winners and losers.
The losses came as the borrowing costs of Italy and Spain – the eurozone’s third and fourth biggest economies – remained perilously high. They have fallen back somewhat, however, since Benoit Coeure, executive director of the European Central Bank (ECB), said on Wednesday that the ECB could restart its securities markets programme (SMP) to buy sovereign debt.
‘Unfortunately, the SMP won’t be causing a U-turn,’ warned strategists at Société Générale.
‘The threat of... purchases of course can create occasional price corrections. But the SMP has been on and off, and no longer looks like a tool that can durably affect market conditions – unless the ECB radically changes its communication and commitment.’
Later in the day, Italy is due to hold a debt auction, which is expected to go smoothly despite the recent flare-up in concerns over its budget woes.
Other stock markets in Europe edged up: Germany’s DAX index hardened 0.31% to 6,685, France's CAC 40 index was 0.18% higher at 3,244, and the FTSEurofirst 300 index of top European shares inched up 0.02% to 1,034.
Royal Dutch Shell (RDSb.L) was the biggest faller on the FTSE 100, dropping 78.5p to £20.65 as it knocked 10 points off the index, after the oil giant reported a ‘light sheen’ in the Gulf of Mexico but said it has no ‘current indication’ that oil was coming from nearby wells.
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