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FTSE hits six-week low as G4S and Rolls-Royce fall

Published 13/11/2015, 17:10
© Reuters. A man shelters under an umbrella as he walks past the London Stock Exchange
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By Kit Rees

LONDON (Reuters) - Britain's top share index slid to a six-week low on Friday as Rolls-Royce (L:RR) stayed on a losing streak and security group G4S (L:GFS) was hit by a broker's target-price cut.

The FTSE 100 index (FTSE) ended 1 percent lower at 6,118.28 points, having at one stage fallen to 6,088.76 points, its lowest level since early October.

Rolls-Royce dropped 4.3 percent after several brokers cut their target prices. The stock had plunged almost 20 percent on Thursday, its biggest daily loss in 15 years, when the company issued a fourth profit warning in just over a year and said it might cut its dividend.

"They can cope with one or two profits warnings, but by the time they get to the fourth, in a short period of time, it really does look grim," said Ian Forrest, an investment research analyst at The Share Centre.

G4S fell 3.6 percent to a two-year low. RBC cut its target price for the stock and repeated an "underperform" rating, flagging poor performance this year.

However, some resources stocks gained, with Anglo American (L:AAL) rising 1.4 percent and BHP Billiton (L:BLT) advancing 0.7 percent. The sector is still down about 6 percent this week following a sell-off in commodities.

© Reuters. A man shelters under an umbrella as he walks past the London Stock Exchange

"I think there's some value investing going on in those sectors," said Manoj Ladwa, head of trading at TJM Partners. "It may not last, it could be fairly short-lived."

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