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Wild action as Footsie falls away once again

After yesterday’s 300 point drop on the Dow Jones Index and big falls in the Far East overnight, investors expected the worst in London, and sure enough the FTSE 100 index quickly dropped around 100 points.

Selling though was not been heavy, and traders are awaiting today’s important non-farm payrolls figures at lunchtime. One area of strength has been oils, with BP up a little on the settlement of its ownership dispute at joint venture TNK-BP. Again there was some talk of a bid for BG Group from ExxonMobil and their shares have been relatively resilient. Unilever also held up well for a second day on the appointment of Paul Polman as its new CE.

In results, JD Wetherspoon's full year profits fell by 12.7% to £54.2m as the smoking ban and slowdown in consumer spending impacted. Total sales increased by 2.1% to £907.5m, though on a like-for-like basis they fell 1.1%, which was not at all bad. It added that in the five weeks to 31st August, like-for-like sales increased by 1.1% and total sales by 5.5%, making this August its busiest ever, and the shares are beginning to look like a decent recovery play.

HMV Group also saw like-for-like sales up by 1.3% in the 18 weeks to 30th August, which was in line with forecasts, but somewhat slower than the 10.1% seen in the previous quarter. The statement was fairly reassuring but the shares look fully valued for now.
 

Head of Research at Blue Index, specialists in trading

05/09/2008

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