The FTSE 100 was firmly in negative territory on Thursday as disappointing updates from 3i and Aviva outweighed positive news from precious metals miner Endeavour.
London’s leading index was down 0.6%at the time of writing.
“The FTSE 100 was held back in its latest attempt to make the 10,000 summit by some shares trading ex-dividend and some poorly received corporate updates,” said AJ Bell investment director Russ Mould.
“This outweighed the tailwind provided by a weaker pound, which flatters the overseas earnings which dominate the index, and saw the FTSE 100 dip slightly in early trading on Thursday. Sterling fell thanks to weaker than expected UK growth figures for September.
“An end to the government shutdown in the US was followed by gains for gold and silver which, in turn, boosted precious metals miners in London.”
Aviva’s result failed to inspire any confidence, and shares slipped 3%.
“Aviva shares dropped around 5% in early trading – a harsh reaction to what looks like a solid set of results. Management raised targets, accelerated timelines, and gave investors a clearer path to buybacks, all while showing good progress on integrating Direct Line,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
However, it was 3i Group that was the FTSE 100’s top faller after the private equity group released a disappointing update on its largest portfolio company.
“The fortunes of private equity investor 3i are heavily tied to Action, with the company continuing to increase its stake in the Dutch discount retail chain,” Russ Mould said
“This has largely been a good news story for the group as Action has achieved significant growth in recent years.
“However, today’s numbers were a little short of expectations. The company warning of an uncertain backdrop will raise concerns about the outlook for Action and its wider portfolio.”
Rolls-Royce issued a steady trading statement that pointed to further growth but didn’t do enough to spark an uptick in the stock which has done tremendously well over the past few years. Shares were slightly lower on Thursday.
Although the FTSE 100 painted a gloomy picture on an index level, there were some big individual winners on Thursday.
Endeavour Mining soared around 10% as the gold miner confirmed bumper increases in free cash flow as a result of the higher gold price. EBITDA rose 110% and the group reduced its overall net debt.
Fresnillo shares rose 4% in sympathy.