Britain’s FTSE outperforms in US data gloom

By: | Published: August 8, 2015 12:11 PM

Britain's top equity index fell on Friday, weighed down by sharp drops in broadcaster ITV and bookmaker William Hill, though it outperformed European peers on a day when U.S. jobs data was deemed to herald a Fed rate rise.

Britain’s top equity index fell on Friday, weighed down by sharp drops in broadcaster ITV and bookmaker William Hill, though it outperformed European peers on a day when U.S. jobs data was deemed to herald a Fed rate rise.

Anticipation of a U.S. hike has stoked market volatility this year. UK markets got a lift earlier this week after central bank data pointed to a hike a lttle further out than previously expected.

The blue-chip FTSE 100 index closed down 0.4 percent, with pan-European equities down around 0.9 percent. Euro zone stocks were also hit by disappointing German data.

Shares in ITV fell 3.4 percent a day after weak earnings reports from U.S. media dragged the sector to its worst two-day loss since the financial crisis.

Several European media companies slipped, and ITV stock was hit particularly hard just days after Liberty said it still had no intention of taking over Britain’s biggest free-to-air commercial TV firm.

However, Liberum analysts called it “a good buying opportunity,” saying in a note that the U.S. TV market is “very different from UK/Europe – channels show a lot more advertising … giving consumers a big incentive to switch off, especially given the high cable fees.”

Britain’s largest bookmaker William Hill fell more than 6 percent after posting a 12 percent fall in first-half operating profit, weighed down by increased machine games duty and a new tax on bets made online by its UK-based customers.

The group also said it had acquired 29.4 percent of NeoGames, an online lottery software and services provider, for $25 million.

“William Hill results highlight the speargun pressure created by the additional cost resulting from the Point of Consumption tax,” said Eric Opara, analyst at Edison Investment Research.

“We would expect smaller players to suffer disproportionately enabling bigger players with the right products to increase their market share, thus mitigating the impact of the additional tax cost somewhat.”

Among the other main fallers, Travis Perkins dropped 2 percent after a target price cut from Panmure.

Among small caps, UK Mail Group plummeted 14 percent after warning that its full-year profit would be materially below market expectations due to additional operating costs from the transition to its new automated hub near Coventry.

Glencore rose nearly 2 percent after South Africa’s mines minister on Friday conditionally withdrew his suspension of the licence for its Optimum Coal Mine.

Other miners also recovered from the lows seen on Thursday. The FT350 Mining index was up more than 1 percent after falling 1.2 percent in the previous session.

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