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Vodafone powers FTSE to new record high

Published 16/05/2017, 17:00
© Reuters. People walk through the lobby of the London Stock Exchange in London
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By Helen Reid

LONDON (Reuters) - Britain's main share index scaled yet another record high on Tuesday, scoring nine days of gains in a row, as Vodafone shares jumped after it forecast earnings growth ahead.

The FTSE 100 (FTSE) ended up 0.9 percent, with telecoms stocks and consumer staples providing the impetus, while energy stocks supported gains as the price of crude rose.

Vodafone (L:VOD) jumped 3.9 percent, the top FTSE gainer as its forecast for stronger free cash flow and earnings growth eased the blow of a 6.1 billion euro (£5.2 billion) loss for the year to the end of March.

Its Indian unit spin-off dragged it to a loss, but the telecoms company saw free cash flow of 5 billion euros for 2017/18, up from the 4.1 billion last year and ahead of the market estimate of 4.66 billion.

Budget carrier EasyJet (L:EZJ) dropped 7.2 percent after its first-half loss widened from the previous year, hit by the later Easter holiday and higher costs, though it said it saw pricing pressures easing.

"The first half was always going to be challenging, given Easter timing and FX headwinds, and it has been a touch worse than expected," said Liberum analysts, adding that forward bookings however appeared encouraging.

A lower-than-expected forecast for growth in interventional medicine sent shares in drugmaker BTG (L:BTG) spiralling down 6.8 percent, the top mid-cap fallers, despite reporting full-year sales slightly ahead of forecasts.

BTG's losses dragged on Europe-wide healthcare stocks (SXDP) which were the worst performing.

British blue chips were little changed after April inflation jumped more than expected to hit its highest level since September 2013, according to data on consumer prices underlining a growing squeeze on households.

Fund platform Hargreaves Lansdown (L:HRGV) fell 8.5 percent, with traders citing exchange-traded fund provider Vanguard's plans to sell directly to investors in Europe for the first time.

The Guardian reported Vanguard was set to offer index-tracking funds for a fee less than half that of Hargreaves.

Challenger bank CYBG (L:CYBGC) fell 3.7 percent after its earnings undershot the market's expectations.

© Reuters. People walk through the lobby of the London Stock Exchange in London

Small-caps (FTSC) eked out a fresh record high. The index is up 9.5 percent so far this year, outperforming the FTSE 100 which is up 4.4 percent.

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