After posting its highest ever closing level yesterday, the FTSE 100 has come up just short of making a new intra-day high this morning with a gap higher being met with some selling. The pound is edging higher against most of its G10 peers but falling a little against the US dollar.
G4S (CO:G4S) weighs on the FTSE
One of the main reasons for the FTSE 100 falling back this morning is a notable drop of 7% in the world’s largest security group, G4S. A downward revision to its revenue growth forecast for this year from 4-6% to 3-4% has come as a negative shock and has clearly irked investors who are exiting the stock in droves. Another laggard is BT, which has fallen by around 1% and continues to languish around its lowest levels in a year. The firm is seen by some as becoming increasingly likely to cut its dividend amidst concerns that the telecoms giant cannot afford to keep paying it due to rising costs and poor recent performance.
BP (LON:BP) hits 7-year high
Despite the notable fallers there has been some shareholders enjoying today’s trade with the Energy sector firmly higher. BP shares are up by more than 1% with the stock hitting its highest level since 2010. The shares have continued to extend to the upside following last week’s trading update which was warmly received by the markets. A doubling of Q3 earnings compared to the prior year as well as the announcement that the Oil Major will launch a share buyback programme have created a surge in demand for the stock which has risen more than 10% in the past 3 months.
Another significant contributing factor to the recent rally has been the surge seen in the oil price, with Brent Crude breaking higher once more this morning. The recent upheaval in Saudi Arabia which has seen 11 princes arrested in part of a wide ranging anti-corruption clampdown has provided more fuel to the fire for the oil price rally and with OPEC expected to announce an extension to their current supply side cuts there could well be more gains to come in the months ahead.