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Falls in Smith & Nephew, miners weigh on Britain's FTSE
February 9, 2017 / 10:42 AM / a year ago

Falls in Smith & Nephew, miners weigh on Britain's FTSE

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* FTSE 100 up 0.1 pct

* Smith & Nephew down after results

* Thomas Cook weighs on mid caps

By Kit Rees

LONDON, Feb 9 (Reuters) - Britain’s top share index steadied on Thursday as falls among mining stocks weighed, while Smith & Nephew dropped after posting disappointing results.

The blue chip FTSE 100 index was up 0.1 percent at 7,192.70 points by 1028 GMT, underperforming the broader European market.

Artificial hip and knee maker Smith & Nephew booked a 7 percent drop in full-year trading profit, missing analysts’ forecasts, hit by difficult market conditions in China and Saudi Arabia.

Its shares dropped 2.4 percent to a 2-month low, poised for their biggest one-day loss since November.

“Expectations were fairly low running into these results, in our view, and the results did little to change that,” Berenberg analysts said in a note.

“The company has spent the last 4-5 years restructuring, reorganising and refocusing and this process is now complete. If growth does not develop as expected in 2017, then its shareholders are likely to permanently reassess the growth potential of this business in its current form.”

Among smaller companies, results also weighed on travel firm Thomas Cook, which slumped more than 8 percent, putting it on track for its biggest one-day loss since late June. The mid cap FTSE 250 index declined 0.2 percent.

While the tour operator said that summer bookings were ahead of last year, Thomas Cook was cautious on the outlook for the rest of 2017 given an uncertain political and economic outlook.

Security concerns in previously popular destination Turkey contributed to Thomas Cook’s shares losing nearly 30 percent of their value in 2016.

“They’re successfully relocating their revenue streams away from an emphasis on Turkey which was causing them quite a bit of issues last year,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said.

“What’s taken the shine off of this report ... (is that) they have warned that it’s going to be a challenging environment going forward in 2017 with the geopolitical risk in particular, Brexit. That may have an impact on holidaymakers’ propensity to go on holiday or take two holidays.”

British mining stocks were also under pressure, with Anglo American, Antofagasta and Glencore among the biggest blue chip fallers, down between 2.5 percent to 3.4 percent, tracking the price of copper lower. (Reporting by Kit Rees, Editing by Ed Osmond)

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