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Utilities drag down FTSE on summer price cap bill

Utilities drag down FTSE on summer price cap bill
 

Utilities have weighed on the FTSE 100 as the government said it was planning to pass laws to introduce an energy price cap before parliament's summer recess.

Claire Parry, minister of state at the Department for Business, Energy and Industrial Strategy, told MPs yesterday the government was planning to introduce the bill soon.

'The intention would be to introduce the bill shortly, with the intention of getting royal asset before the summer recess,' she said, according to Reuters.

Last week energy regulator Ofgem said the cap, on common standard variable tariffs, could be in place by Christmas should MPs pass the law before the summer break.

The FTSE 100 was down 29 points, or 0.4%, at 7,696, with SSE (SSE) the biggest faller, down 3.1% at £13.00.

Associated British Foods (ABF) was another faller, down 2.8% at £27.76 after the Primark owner and food processing group warned profits from its sugar business would fall by more than previously forecast.

George Salmon, equity analyst at Hargreaves Lansdown, said the performance of the sugar business was the 'main downer' in the update.

'The market was already braced for a decline, but softer EU sugar prices mean performance is set to be even weaker than expected this year,' he said.

Hargreaves Lansdown (HRGV) was meanwhile the biggest riser on the index, up 4% at £19.14, after Barclays analyst Daniel Garrod upped his price target on the online stockbroker from £16.70 to £21, retaining his 'overweight' rating.

'For 2018 the structural drivers of large savings and advice gaps in the UK remain strong,' he said.

'Fee pressures appear manageable and flows and cash yields are likely to surprise on the upside, in our opinion.'

On the FTSE 250, NewRiver REIT (NRRT) was the biggest riser, up 5.5% at 316p after hiking its dividend 5% to 5.25p for the third quarter.

AA (AAAA) was a big faller, down 7.5% at 152.8p after analysts at Barclays cut their target price on the stock to 200p from 270p.

Among 'small-cap' stocks, Countrywide (CWD) slumped 16% to 113.6p after the estate agent warned it expected an 8.8% fall in full-year income after a difficult fourth quarter.

The news weighed on rival Foxtons (FXT), which dropped 4.6% to 78.2p. 

Stock Spirits (STCK) was the biggest riser on the index, up 6.6% at 306p, after analysts at Berenberg hiked their price target on the shares from 207p to 340p.

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