LONDON (Reuters) - Britain’s top share index held firm on Monday as a rise among financials and commodities stocks lent support, though a plunge in Carillion’s shares after a profit warning weighed on mid-caps.
The blue chip FTSE 100 .FTSE index was up 0.3 percent at 7,370.03 points at its close, whereas the mid-caps .FTMC were down 0.2 percent, held back by a near-40-percent fall in Carillion's (CLLN.L) shares.
The construction and support services group plunged after its CEO stepped down as it issued a full-year profit warning, citing difficult markets and deterioration in some contracts.
Carillion is one of the most-shorted UK firms, according to FCA disclosure data.
“(Carillion‘s) issued a profit warning, saying that profits are going to be lower ... also they’ve got a big debt pile, which isn’t getting any smaller, and that all raises the prospect that they might have to raise more capital, perhaps through a rights issue at some stage,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“Put all these things together, add on top of that the CEO stepping down and you’ve got a pretty grisly statement and consequently a very negative reaction from the market.”
Peer Balfour Beatty (BALF.L) also fell more than 3 percent.
Asset management firm Schroders (SDR.L) was the biggest riser, jumping more than 2 percent and hitting a two-month high after RBC raised its rating on the stock to “outperform”.
“The underlying business is in good shape and cost control will likely surprise on the upside,” analysts at RBC Capital Markets said in a note.
“Given Schroders’ relative share price underperformance recently and a conservative consensus, we believe current levels represent an attractive entry point,” they added.
Earlier in the session mining firms were the weakest performers on the index, but they recovered as the price of copper pared losses and oil prices gained.
Anglo American (AAL.L) and BHP Billiton (BLT.L) both rose around 1.7 percent, closely followed by precious metals miner Randgold Resources (RRS.L), which gained 1.5 percent, helped by a firmer gold price.
Reporting by Kit Rees; Editing by Andrew Roche