Risk appetite returns on Thursday following the US Federal Reserve’s interest rate hike, investors taking it as a dovish signal that the Fed is going to tighten monetary policy only cautiously as the economy improves.
While the FTSE 100 races 52.4 points higher to 7,421 early on, Sainsbury’s (SBRY) cheapens 1.7% to 266.9p on a rather disappointing fourth quarter trading statement. This shows like-for-like retail sales down 0.5% in the core supermarkets business in the nine weeks to 11 March, a setback following the 0.1% rise seen in the third and Christmas quarter.
With the grocery market remaining ultra-competitive, CEO Mike Coupe’s saviour is acquired catalogue brand Argos, whose like-for-like sales rose 4.3%, boosted by strong mobile phone, wearable technology and video game sales.
OneSavings Bank’s (OSB) strong share price run continues, the specialist lender bid up another 0.7p to 420p on full year results revealing underlying pre-tax profits of £137m. This represents 29% year-on-year growth and is a healthy 6% ahead of the consensus of analysts’ estimates.
CEO Andy Golding says OneSavings ‘entered 2017 with a strong pipeline of new business and are seeing very strong application levels in our core businesses’.
Engineer Balfour Beatty (BBY) swings back into profit after two years of losses and says its order book is up 15% at £12.7bn, although some investors decide to take profits, sending the shares 5.4p lower to 278.5p.
Serco (SRP) improves 1.6% to 117.3p after being named as preferred bidder to run the New Grafton Correctional Centre in Australia, a 20-year deal beginning in 2020 and worth £1.6bn to the support services group.
Capital Drilling (CAPD) drops 5.7% to 49.5p on full year results that reveal the mining services group remained mired in the red for 2016, despite a return to top line growth amid improving conditions in the gold sector. A dividend cut and news Capital Drilling will invest up to $3.8m for a 50% stake in laboratory testing services company A2 also weigh on sentiment.
Allergy Therapeutics (AGY:AIM) is in rude health, up 3.2% to 28.25p after announcing the recruitment of the first patient in its Phase III study (B301) to evaluate the efficacy and safety of Pollinex Quattro Birch, a treatment for allergic rhinitis.
However healthcare software supplier EMIS (EMIS:AIM) softens 17.5p to 867.5p on annual numbers showing slower growth due to NHS cutbacks.
Driver monitoring system designer Seeing Machines (SEE:AIM) slumps 12% to 3.62p as half year results show a swing to heavy losses in a transitional year involving heavy investment in its technology platform and slower-than-expected sales in the fleet market.
