Shares round-up: Boohoo rallies 33%, but FTSE 100 falls again
Bargain hunters are buying Boohoo, but there are some big losers too. We name them here.
9th July 2020 13:33
by Graeme Evans from interactive investor
Bargain hunters are buying Boohoo, but there are some big losers too. We name them here.
Housebuilders and retailers provided some cheer for investors today as Persimmon (LSE:PSN) and Next rallied 4% and more to offset an otherwise downbeat session for the FTSE 100 index.
A strong week for building firms following the stamp duty boost from chancellor Rishi Sunak continued when Persimmon and former Bovis Homes company Vistry (LSE:VTY) revealed resilient trading.
There was also a turnaround in fortunes for retail stocks, with JD Sports Fashion (LSE:JD.) and B&Q owner Kingfisher (LSE:KGF) up 2% and second-tier Marks & Spencer (LSE:MKS) 4% stronger. Even Boohoo (LSE:BOO) attracted buying interest after its turbulent week, surging as much as 33% to return as AIM's largest stock.
Reassuring updates from Page Group (LSE:PAGE) and Robert Walters (LSE:RWA) were in keeping with a more encouraging tone domestically as the FTSE 250 index rose by 0.8% at one point.
That was about as good as it got for investors, however, with the FTSE 100 index seeing another tough session with a fall of 0.7% to 6,114.7. The slide continues this year's underperformance by London's energy and financials-focused top flight. In contrast, the Nasdaq closed at another record high last night following strong sessions for tech giants Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).
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Rolls-Royce (LSE:RR.) was the biggest faller in the FTSE 100 index as the engines giant disclosed cash outflows of £3 billion for the first half of the year, a third of which stemmed from lower receipts following a 50% slump in flying hours and slide in civil aviation engine deliveries.
A cost mitigation target of £1 billion for 2020 has so far realised £300 million, while Rolls expects that the trend for cash outflows will improve to £4 billion for the whole financial year.
Rolls said last Friday it was in the early stages of reviewing options to strengthen its balance sheet, although there was no further mention of this in today's update. Shares fell another 8% to 263.2p, keeping the company close to the 15-year lows seen earlier in the crisis.
Safe haven stock National Grid (LSE:NG.) also tumbled by 5% after regulator Ofgem set out its proposals for a five-year investment programme worth £25 billion to transform Britain's energy networks, including more emissions-free green power.
Its proposals would almost halve industry earnings, saving up to £3.3 billion in the process but meaning that companies can return no more than 3.95% to investors.
National Grid said the draft determination raised concerns about its ability to deliver resilient and reliable networks, while it fears it could also jeopardise the delivery of green energy. Ofgem said it was confident that robust investment in the sector will continue.
SSE (LSE:SSE) shares were 3% lower at 1,305p, while National Grid stood at 852.6p compared with 991p at the start of the month.
Consumer staples including British American Tobacco (LSE:BATS) and Imperial Brands (LSE:IMB) were both cheaper, while HSBC (LSE:HSBA) remained under pressure amid speculation that Donald Trump is considering undermining the Hong Kong dollar's peg to the US dollar. Shares fell another 5.5p to 378.15p.
Outside the top flight, recruitment firm Robert Walters was 1% higher at 400p after reporting it was trading in line with current market forecasts, albeit with net fee income down 34% in the second quarter. It said its balance sheet and cash position remained strong.
The impact of the Covid-19 pandemic on the hiring of new staff also meant Page Group's net gross profit fell 47.6%, with the figure down by 61.5% in the UK.
Chief executive Steve Ingham sounded a more upbeat note, however. He said: “Having weathered a particularly challenging Q2, we now look forward to driving improved activity and gross profit through the second half.” Shares were 4% lower at 361.4p, having been unchanged for much of the session.
Boohoo's rebound on the back of some supportive broker comment ensured shares returned to 294p after the battering caused by revelations about supply chain working conditions. The share price is still some way short of the 387.5p seen at the start of the week.
It was beaten to the top of the AIM 100 risers board, however, by a 70% surge for the palladium, platinum, rhodium, and gold producing company Eurasia Mining (LSE:EUA).
Today marked Eurasia's first session since its listing was put on hold in February pending clarification of its relationship with China's CITIC Merchant. It confirmed today that it had entered into a success fee based engagement letter with CITIC to, amongst other things, explore possible strategic options for the company's mining assets.
Executive chairman Christian Schaffalitzky said Eurasia had launched a formal sale process under the Takeover Code, which could result in a sale of assets or the company. Shares reached 12.1p.
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