FTSE 100 Friday close: SSE and Centrica fall in grim week for utilities
- 27 September 2013
Energy firms were hit this week as one of the UK’s most influential investors said that Labour’s plan to cap energy prices would hurt the investment case for the UK.
British Gas parent Centrica dropped by 9% to 367p, while SSE loosened by 7% to 1,468p.
During the week, Invesco Perpetual’s Woodford said: “If Centrica and SSE cannot make any money supplying electricity to the retail market then they won’t supply it. The lights will go off, the economy will shut down.”
Overall, it was a flat period on the market, with FTSE 100 closing on Friday 1% off, over both the week and the day, at 6,512.66.
It was not helped by comments made by Bank of England Governor, Mark Carney in an interview with The Yorkshire Post. The new BoE boss said that while extending the Bank of England’s £375bn quantitative easing strategy remained an option, he felt there was no present need for additional bond buying, given that the UK recovery had “strengthened and broadened”.
However the energy firms’ losses did not rival Carnival’s, the week’s steepest faller, which lost 12% to close at 2,113p. According to Reuters brokers have reduced their forecasts for the firm, and expressed concern that a recovery in bookings probably would not be witnessed until at least 2015.
News emerged on Friday that the 81% taxpayer owned Royal Bank of Scotland is to offload some 314 branches to the Corsair consortium, which counts the Church of England as one of its backers, in a deal forced on the bank because of its taxpayer bailout. The market welcomed the streamlining and the banks shares rose 1% to 366.5p.
Elsewhere among the banks HSBC was off 2% at 677.p, while Lloyds and Barclays each lost 3% apiece to close at 74.23p and 265.8p respectively. Standard Chartered was also down by 3% over the week at 1,495p.
The week was not completely deflated, as defense contractor BAE Systems, shot up 4% to 466.7p, hitting a five-year high on Thursday after it submitted a bid to build 60 Eurofighter Typhoon jets for the United Arab Emirates.
Vodafone is also up by 4% to 217.2p, after it confirmed extra 4G coverage in the UK, while International Consolidated Airlines shares soared by 3% to 337.3p after it had its ‘buy’ rating re-affirmed by brokers at Deutsche Bank.
Also piquing the interest of analysts is house builder Travis Perkins, 2% better at 1,648p. The group, which also owns Wickes, is attractive because of UK housing data and its organic revenue growth according to Goldman Sachs.
Next week sees market updates arrive from UK supermarket rivals Tesco and Sainsbury while plumbing giant Wolseley also reports.
- Scams on the rise following new pension freedoms
- Driving in inappropriate footwear could invalidate your car insurance
- Five stocks you shouldn't 'sell in May'
- Right to Buy extended to 1.3m housing association tenants, but Shelter warns of trouble ahead
- Five funds to weather the bond market storm
- Ryanair finds it pays to be nice as profits soar 66% on customer service drive
- Personal allowance to rise with minimum wage
- Watchdog investigates as thousands of vulnerable customers are switched to pre-paid meters
- Government pledges no income tax rises for five years, plus other Queen's Speech news
- Regulator looks to fine three men £80m over sales of 'death bonds'