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FTSE declines, U.S. deal boosts GVC

Published 30/07/2018, 10:08
Updated 30/07/2018, 10:10
© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Kit Rees

LONDON (Reuters) - Britain's top share index declined on Monday as big miners and energy stocks fell, though investors welcomed GVC's U.S. betting deal with MGM Resorts.

The blue-chip FTSE 100 (FTSE) index was down 0.3 percent at 7,679.86 points by 0852 GMT, in line with a broader decline among European stocks at the start of a week where central bank policymaking will be in focus.

Shares in GVC Holdings (L:GVC) were a bright spot, however, jumping 5 percent to the top of the index after the British gambling company agreed a joint venture with U.S. hotel and casino operator MGM Resorts International (N:MGM) to set up an online betting platform in the United States. [nL4N1UQ2RB] [nL5N1UQ1HU]

GVC's shares hit a record high and were on track for their best day since mid-May.

"A 50/50 JV would enable GVC to benefit from a much larger profit pool in future, and any initial operating losses would likely be compensated for by future market share gains," analysts at Berenberg said in a note.

Elsewhere, shares in Morrisons (L:MRW) were boosted by an upgrade from UBS to "buy" from "neutral", sending the stock 2.1 percent higher.

More broadly, a decline across materials stocks was the biggest weight. Shares in miners Rio Tinto (L:RIO), Glencore (L:GLEN) and Anglo American (L:AAL) all fell 0.9-1.3 percent as the price of copper declined after economic data which may indicate slowing growth in top metals consumer China. [MET/L]

Heavyweight oil stocks BP (L:BP) and Royal Dutch Shell (L:RDSa) were also on the back foot, down 0.2 percent and 0.4 percent respectively.

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Earnings reports were the main focus among smaller stocks, with brickmaker Ibstock (L:IBST) the biggest mid-cap (FTMC) faller. It was down more than 11 percent after the company said it expects first-half core earnings to fall and warned of lower-than-expected brick output in the second half of the year. [nL4N1UQ30W]

Hiscox (L:HSX) and Senior (L:SNR) were at the top of the index, up around 9 percent after both companies gave updates.

Shares in underwriter Hiscox hit a record high after its first-half earnings beat expectations, boosted by higher premiums, while engineering firm Senior said its full-year guidance was unchanged. [nL5N1UQ1RD]

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