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Britain's FTSE bounces back, Mondi and Barratt lead

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* Blue-chip FTSE 100 index gains 0.7 pct

* Mondi shares advances after strong profits

* Barratt up on positive outlook

By Atul Prakash

LONDON, May 13 (Reuters) - Britain's top share index rose in early trading on Wednesday, with housebuilder Barratt Developments, South African paper maker Mondi and other companies gaining after encouraging updates.

The blue-chip FTSE 100 index was up 0.7 percent at 6,982.59 points by 0801 GMT after falling 1.4 percent in the previous session. It is up about 6 percent so far this year.

Mondi shares rose 9 percent, the top gainer in the FTSE 100 index, after the company said its first quarter underlying operating profit was 29 percent above the comparable period last year.

"Average paper selling prices holding up and comparable sales growth across most business, both sequentially and annually, is also welcome news at this stage of the year," Mike van Dulken, head of research at Accendo Markets, said.

"Its confidence in FY progress is going down well with the investment community this early in the year when other corporates are possibly more cautious," he added.

Barratt Developments advanced 3.4 percent after Britain's biggest housebuilder by volume said it expected to build more houses this year than previously forecast, thanks to strong demand and rising sales.

Among sectoral gainers, the UK Oil and Gas index rose 0.6 percent, tracking a rise in crude oil prices supported by bets that U.S. crude stockpiles will fall for a second straight week.

But gains were capped by some weaker stocks. Compass Group fell 2.2 percent after the world's biggest catering firm said it remained cautious over the economic environment in some emerging markets. It, however, reaffirmed its full-year expectations.

"No news with regards to a new share buy-back scheme looks to be generating some early disappointment," Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said.

"Furthermore, challenges for its emerging markets business continue to be navigated, with some increased economic uncertainty and the impact of lower commodity prices on Offshore & Remote client operations providing some drag on performance."

Admiral Group fell 1.2 percent after the insurer said that Henry Engelhardt had decided to step down from his role as chief executive in one year's time and he would be replaced by co-founder and current Admiral chief operating officer David Stevens. (Editing by Andrew Heavens)

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