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London fall limited; RR hit by profit warning

Mon close: Stocks fell across Europe after the Greeks voted ‘no’ to the creditors’ bailout proposals and edged the country closer to a possible exit from the Eurozone.

While markets on the continent suffered steep losses – Italian equities fell 2.6% – the London market saw a more modest sell-off.

The FTSE 100  finished the session down 0.76% at 6,535.68, bouncing back off an earlier low of 6,506.71.

With 61.3% of the public voting ‘no’ in Sunday’s referendum, Greek Prime Minister Alexis Tsipras said it had ammunition to go back to the negotiating table.

Rolls-Royce slides

Aerospace manufacturer Rolls-Royce was the worst performing stock in the top index. Its shares dropped 9% after a profit warning, which the company said reflected a deterioration in offshore markets. The company said in a statement it expected full year profit to be between £1.32 billion-£1.47bn, compared to previous guidance of £1.4bn-£1.55bn.

Traders also expressed disappointment that a share buyback programme was being halted after Rolls Royce’s third profit warning in nine months.

“A new chief executive may be in place but it is the same story of investor disappointment as profit forecasts misfire for Rolls Royce,” said Brenda Kelly, head analyst at London Capital Group.

Telecoms group BT slipped after Citigroup cut its rating from ‘buy’ to ‘neutral’, citing risks from a shifting regulatory scene.

Postal operator Royal Mail rose after Goldman Sachs boosted its target price for the stock to 610p from 585p, saying it expects to seen an improvement in underlying profitability.

Budget airline EasyJet edged higher after reporting that it carried 6.56m passengers in June of this year, nearly 8% more than in the same month last year. The load factor, which measures how full the plane is, was 92.7%, up just a touch from 92%.

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