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FTSE falls as Barclays, ex-divs weigh

Published 23/02/2017, 18:03
© Reuters. A red London bus passes the Stock Exchange in London
UK100
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HSBA
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By Kit Rees and Helen Reid

LONDON (Reuters) - Britain's blue-chip FTSE 100 index (FTSE) closed lower on Thursday, depressed by Barclays stock after the bank reported earnings, by mining sector shares and those trading ex-dividend.

Barclays (L:BARC), the third major listed British lender to report earnings this week, gave up gains made immediately after its results to end 2.6 percent lower.

Analysts cited concerns around potential litigation costs.

Among other laggards, HSBC (L:HSBA) was down 4 percent, while mining firms (FTNMX1770) and those trading without entitlement to their latest dividend payout, which included Rio Tinto (L:RIO) and easyJet (L:EZJ), were the biggest fallers.

Ex-divs took about 14 points off the FTSE 100.

On the upside, both Intu Properties (L:INTUP) and RSA (L:RSA) saw large gains after reporting well-received results.

Intu, which owns and manages shopping centres, jumped 6.8 percent and posted its biggest gains for six years after its earnings beat expectations and it increased its dividend.

Intu was one of the most shorted stocks before its earnings report this week, according to figures from Markit, with 11.9 percent of its shares outstanding on loan.

Insurer RSA (L:RSA) rose almost 5 percent after it posted a 2016 profit beat and increased its target for return on equity.

CEO Stephen Hester said customers had benefited "significantly" from RSA not having been sold to Zurich Insurance (S:ZURN), which withdrew a takeover offer in 2015.

"We like what Stephen Hester is doing at RSA and view the recent announcement of the disposal of the UK legacy book as a great deal but, in our view, this good news is now all in the share price," Panmure Gordon analyst, Barrie Cornes, said. The broker has a 'hold' rating on the stock.

Centrica (L:CNA) did not fare as well after reporting earnings. The stock lost 3.7 percent despite the company returning to profit growth and flagging the possibility of a dividend rise after two years of shareholder payout cuts.

© Reuters. A red London bus passes the Stock Exchange in London

"Today's dividend announcement of no growth in 2016 was a surprise," Jefferies analysts said, noting that Centrica's pension deficit ballooning to 1.1 billion pounds in 2016 might be the reason for this.

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