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Imperial Brands, energy stocks lift the FTSE, Burberry and Greggs sink

Published 09/05/2018, 10:09
Updated 09/05/2018, 10:10
© Reuters. FILE PHOTO: People walk past the London Stock Exchange Group offices in the City of London, Britain

By Julien Ponthus

LONDON (Reuters) - The London stock market opened in positive territory on Wednesday, lifted by strong results by tobacco company Imperial Brands and oil stocks following the United States' decision to pull out of the international Iran nuclear deal.

By 0827 GMT, the blue-chip FTSE (FTSE) index advanced 0.4 percent, slightly ahead of other European bourses, where trading focused on a flurry of corporate earnings rather than on the broader economic consequences - outside of oil prices - of sanctions U.S. President Trump announced against Iran.

Royal Dutch Shell (L:RDSa) and BP (L:BP), up 1.9 percent and 1.6 percent respectively, added the most points to the index as oil prices rose more than 2 percent. U.S. sanctions against the OPEC Iran member are expected to tighten global oil supply.

The top performer was heavyweight Imperial Brands (L:IMB), which jumped 3.5 percent after a pledge to step up divestments and first-half sales and profits slightly ahead of estimates.

"With a number of areas of encouragement for the market to hang its hat on, such as volume delivery in the context of peers, continued commitment to its model, further progress with its vapour business and the decision to sell off non-strategic assets for up to £2 billion over the next 12-24 months, the stock should outperform today", Jefferies analysts commented.

Shares in Vodafone (L:VOD) were stable, up 0.3 percent, after the world's second-largest mobile operator announced a $21.8 billion deal to buy Liberty Global's (O:LBTYA) assets in Germany, the Czech Republic, Hungary and Romania.

British fashion house Burberry (L:BRBY) was the worst performer, down about 7 percent after Belgian billionaire Albert Frere's Groupe Bruxelles Lambert (GBL) sold its entire 6.6 percent stake.

Compass Group (L:CPG) shares also fell heavily, down 6.2 percent after the world's biggest catering firm's results came in below expectations.

Among smaller companies, baker Greggs (L:GRG) dropped about 14 percent after it warned that profits for 2018 were likely to fall short of expectations and be at a similar level to 2017, blaming a dip in consumer demand.

Still in the "mid-cap" segment of the market, shares in precision engineering group Renishaw (L:RSW) jumped 8.2 percent, on track for their best day in over two years after it raised its guidance.

© Reuters. FILE PHOTO: People walk past the London Stock Exchange Group offices in the City of London, Britain

British sub-prime lender Provident Financial (LON:PFG) also jumped 6.6 percent as it said its recovery plans would deliver 2018 results in line with internal plans.

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