The UK stock market paused after last week’s rally from early February lows with Reckitt Benckiser (RB) casting a shadow over the FTSE 100 after the consumer goods group published a cautious outlook in its annual results.
Having jumped 0.8% on Friday, the UK’s blue chip index dipped five points to 7,389, held back by the maker of Durex condoms and Lysol disinfectant which dropped 5% or 348p to £62.24. Reckitt profits missed expectations and it cautioned that tough trading in developed markets and rising commodity costs would continue to be challenges this year.
Standard Life Aberdeen (SLA) was the FTSE 100’s biggest riser, up 1.2% or 5p to 369p after reports that it had held unsuccessful talks about acquiring Scottish Widows from Lloyds (LLOY) before the bank removed it from a mandate to run £109 billion of its pension arm’s assets last week.
Markets were slightly better outside the large-cap index with the FTSE 250 index up eight points at 19,741 and the FTSE Small-Cap index 10 points higher at 5,774.
Enquest (ENQ) was a bright spot, up 9.3% or 2.7p to 31.7p, after the North Sea-focused oil producer forecast higher production this year.
Fidessa (FDSA) jumped over 9% or 2.7p to 31.7p after the trading software provider’s annual profits beat forecasts and analysts said it could improve margins further this year.
Several investment trusts continued to reflect the bounce back in their markets.
Baillie Gifford Shin Nippon (BGS), the top-performing Japanese smaller companies fund, advanced 3.5% or 32p to 948p.
Dunedin Smaller Companies (DNDL) gained 2.2% or 6p to 275p.
Martin Currie Global Portfolio (MNP) slipped 1.6% or 4pp to 239p.
Mccoll's Retail Group (MCLSM) tumbled 6p or 15p to 234p after the convenience retailer said the collapse of Palmer & Harvey before Christmas had dented sales.
British consumers remain under pressure with the Household Finance Index falling to a seven-month low of 42.2 from 42.9. Tim Moore of the index compiler IHS Markit said: ‘The latest survey adds to evidence that UK Households have seen an erosion of their financial wellbeing so far this year, with stubbornly high inflation the main factor placing pressure on consumer budgets.’
The pound traded 0.3% down at $1.33996 against the dollar which strengthened after falling to three-year lows last week on fears the Trump administration is pursuing a weak currency policy to boost exports.
Oil prices continued to rally in response to overnight gains in Asia stock markets plus tensions in the Middle East after Israel’s prime minister Benjamin Netanyahu warned it could confront Iran directly rather than through proxies in Syria.
In London Brent crude gained 38 cents or 0.6% to $65.22 a barrel to extend its 3% advance last week. US West Texas Intermediate crude leaped 57 cents or 0.9% to $62.25 a barrel.