(Refiles to fix typo in paragraph four)
* FTSE 100 down 0.3 pct
* Glencore drops after earnings fall
* Rand fall knocks SA-exposed shares
* WPP hits record high after results
By Alistair Smout
LONDON, Aug 24 Britain’s top share index fell on
Wednesday, underperforming European peers as it was knocked by a
drop in commodity firm Glencore after it reported a fall in
earnings and adjusted its debt target.
Glencore fell 4 percent, the top FTSE 100 faller, after it reported a 13 percent decrease in earnings,
although it said that it was on track to sell assets and cut
debt to a new, lower, target.
Glencore remains up around 100 percent in 2016, and analysts
said that, while the results were in many ways encouraging, much
of the progress in the restructuring programme was already
“The markets have, over the course of the year, rewarded the
share price for the more pro-active stance Glencore have taken
in reorganising their restructuring,” said Alastair McCaig, head
of investment management at Fern Wealth in Zug, Switzerland.
“We’ve seen some profit taking as investors recaliberate
their timelines. Management still sees issues with demand and
volatile markets too. But we would look at this as a potential
opportunity to invest in Glencore, should we see a little bit
more of a retracement.”
Other miners also fell after Glencore’s results, with the
price of copper also near a six-week low. The sector was down
The FTSE 100 was down 0.3 percent at 6,850.40 points,
hindered by its heavy exposure to mining stocks. Most European
markets were in slightly positive territory.
Stocks with exposure to South Africa, such as Old Mutual and Mondi also fell, with the rand coming under
severe pressure after the South African finance minister was
summoned by police.
Among risers, WPP gained 5.6 percent and hit a
record high after comfortably beating net sales expectations.
“Advertising is a bellwether for the economy as a whole and
WPP’s performance in the first seven months has been reasonably
strong following a record performance in 2015 and despite
worldwide GDP growth slowing,” said Russ Mould, investment
director at AJ Bell.
Housebuilders rallied for a second day, reaching their
highest levels since Britain voted to leave the European Union.
Persimmon again led the sector higher. Having posted strong
results on Tuesday, showing resilience to the uncertainty around
the referendum, it was up 2.7 percent on Wednesday after a spate
of broker upgrades.
“(Persimmon) continues to trade well post-Brexit and at this
stage has seen little impact of the referendum risks on
underlying demand, supported by strong pent-up demand, tight
supply, lower mortgage rates and good mortgage availability,”
analysts at Citi said in a note, raising their target price on
the stock and reiterating a “neutral” stance.
Among mid-caps, OneSavings Bank rose nearly 10 percent after
reporting a jump in underlying profit, but remained down 20
percent since the Brexit vote. (Reporting by Alistair Smout; Editing by Toby Chopra)