Earnings boost lifts London mid-caps, Unilever slides

People walk past the London Stock Exchange Group offices in the City of London, Britain, December 29, 2017. — Reuters pic
People walk past the London Stock Exchange Group offices in the City of London, Britain, December 29, 2017. — Reuters pic

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JULY 22 — British mid-caps rose today as positive corporate results helped allay concerns over rising Covid-19 cases, while Unilever was the top blue-chip loser after it cut its full-year margin forecasts.

The domestically focussed mid-cap index rose for the third straight session, up 1.1 per cent, helped by upbeat quarterly results from Howden Joinery Group and IG Group.

However, losses in Unilever along with weakness in peer Reckitt Benckiser weighed on the blue-chip FTSE 100 index, which only inched 0.2 per cent higher.

Unilever Plc fell 4.5 per cent and was the worst performer on the index after it cut annual operating margin forecast due to rising commodity prices, while posting higher-than-expected underlying sales growth for the second quarter.

“Unilever’s first half results followed a similar pattern to a lot of recent corporate updates. Yes they are enjoying a surge in demand but their ability to fully benefit from this surge in terms of profit is being compromised by rising costs,” said Russ Mould, investment director at AJ Bell.

Britain’s retailers could open thousands of local high-street stores over the next 12 months as people start to step out again after months of coronavirus curbs, according to research from Barclays.

The retailers sub-index jumped 1.3 per cent

The blue-chip FTSE 100 index has gained 8.5 per cent so far this year, helped by government stimulus, but is nearly 11 per cent away from its all-time high. It is still underperforming the mid-cap index, which is just 1.2 per cent away from its record high.

Among stocks, transport firm FirstGroup jumped 4.6 per cent after it increased its planned shareholder returns by 135 million pounds (US$185.29 million) after closing the sale of its US bus assets to private equity firm EQT Infrastructure.

Workspace Group Plc gained 2.2 per cent after it said it expected strong signs of businesses in London returning to work with easing of pandemic-related restrictions. — Reuters

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