LONDON (Reuters) - British shares slipped on Wednesday as losses among energy stocks and sub-prime lender Provident Financial weighed, while a stronger pound was also unhelpful.
The blue chip FTSE 100 .FTSE was down 0.3 percent at 7,447.79 points at its close, weighed down by another weak session for oil stocks as the oil price headed lower. [O/R]
The FTSE hit a session low after Bank of England Chief Economist Andy Haldane signalled he would back a rise in interest rates in the second half of this year, which also sent sterling higher.
The Queen’s Speech, which included Prime Minister Theresa May’s legislative agenda for the next two years, appeared to have little impact on British shares.
Provident Financial (PFG.L) was the biggest individual faller, plummeting up to 20 percent after it warned that disruption from the reorganisation of its consumer credit division would weigh on its results for the rest of the financial year.
Analysts at Liberum said they had been concerned about rising impairments and customer attrition in the division as the new model was implemented, but the transition was “more painful than expected.”
“The sheer speed of the deterioration has taken us by surprise, particularly after a reassuring Q1 interim management statement on May 12,” they added.
Its losses also weighed on Hargreaves Lansdown (HRGV.L), the second-worst blue-chip performer.
Costa Coffee and Premier Inn owner Whitbread (WTB.L) was the top performer among UK and European shares, up 3.4 percent after reporting sales rose 7.6 percent in the first quarter.
“If the consumer gets squeezed by inflation, then they will have to cut back, but probably more on the bigger-ticket items in the short term,” said Greg Johnson, analyst at Shore Capital.
“Affordable treats, lower-ticket leisure expenditure will probably outperform bigger-ticket items such as houses.”
With most of its hotels in the UK, Whitbread was also well positioned to benefit from a potential rise in ‘staycations’, Johnson said.
Energy firm Centrica rose as investors cheered the sale of its two biggest gas plants to a subsidiary of Czech energy company EPH.
London-focused house builder Berkeley Group (BKGH.L) also made gains among lacklustre mid-caps, up 2.1 percent after its full-year results beat expectations with a 53 percent increase in profits before tax. However, it warned uncertainty related to Brexit could cut into demand for houses.
“Full-year 2016/2017 is likely to represent peak profits for Berkeley Group,” said Colin Sheridan, analyst at Davy Research.
“The results are strong, however, and the market is likely to be encouraged by comments that selling trends in London have improved into the end of the financial year,” he added.
Reporting by Kit Rees and Helen Reid, editing by Pritha Sarkar