Thursday, 13 August 2015 20:02
LONDON: Britain’s top equity index rebounded on Thursday from losses earlier in the week as concerns over China’s economy eased, with Coca-Cola HBC leading the gains after posting stronger-than-expected net profit.
The FTSE 100 index, which had fallen by more than 2 percent in the previous two sessions, was up 0.8 percent at 6,622.04 points by 1051 GMT. Beijing’s devaluation of the yuan on Tuesday had hit world financial markets, but China’s central bank said on Thursday that strong economic fundamentals meant there was no reason for the currency to weaken further. Stock markets in Asia and Europe rose.
“They’re taking the Chinese central bank at its word, but I’m still taking those comments with a pinch of salt,” said Richard Perry, an analyst at Hantec Markets.
“Selling short-term rallies on the FTSE would still seem to be a sensible strategy to play.” Soft drink bottler Coca-Cola HBC enjoyed its best day on record, surging nearly 11 percent after reporting first-half net profit ahead of analyst estimates. Credit Suisse raised its target price for the stock to 1400 pence from 1350 pence.
“The four extra trading days will have helped the margin while the FX impact will also be greater in the second half,” Credit Suisse analysts said in a note.
“Nevertheless the group’s margins look set to be rather better than we thought for the full year and we raise our estimates accordingly.” In other gainers, shares in travel group TUI climbed 7.4 percent after the company forecast earnings at the top end of analysts’ expectations.
On the downside, G4S – the British company whose services include running prisons and protecting airports – fell 4.2 percent after both Goldman Sachs and Exane BNP Paribas cut their ratings on the stock.
The FTSE rose to a record 7,122.74 points in late April but has since given up most of the gains it made in 2015.
