March 7, 2019 / 9:17 AM / 3 months ago

Weak results, financials, ex-dividend trading drag FTSE 100 lower

(Reuters) - Britain’s FTSE 100 fell on Thursday as several blue-chip stocks traded ex-dividend and financial stocks were hit after the European Central Bank delayed a rate hike at least until next year and offered a fresh round of cheap loans to banks.

FILE PHOTO: A broker reacts on the IG Index the trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

NMC Health and insurers Aviva and Admiral all slipped after earnings reports.

The FTSE 100 was down 0.5 percent, while the FTSE 250 gave up 0.9 percent and was on track for its worst week in more than two months.

Miners Rio Rinto, BHP and Evraz plus house-builder Persimmon all traded ex-dividend and were among the top drags on the main bourse.

An index of banks had its worst day in two weeks as the ECB pushed out the timing of its first post-crisis rate hike to 2020 at the earliest and offered banks a new round of cheap loans that was less generous than previous packages.

“Investors appear to be spooked by the complete somersault done by the ECB in terms of their inflation and growth outlook. The decision to implement a new TLTRO six months from now suggests that the central bank is more concerned than it was in January,” said CMC Markets analyst Michael Hewson.

This came after sentiment had already been muddied by news that talks between EU officials and Britain on amending its divorce deal with the European Union had made no headway and no swift solution was in sight.

United Arab Emirates’ healthcare provider NMC Health skidded more than 11 percent, its worst day on record, after posting annual results.

Jefferies analysts said NMC’s adjusted earnings per share were lower than their consensus as financial charges were much higher than expected.

Insurer Admiral Group shed 4.7 percent on its worst day in more than a year and a half. Though the company reported better-than-expected 2018 earnings, a trader said that was largely on benefits related to Ogden rates.

Fellow underwriter Aviva and asset manager Schroders also fell 3.8 percent and 5.2 percent respectively after their annual earnings reports.

But turnaround specialist Melrose Industries gained 2.1 percent to its highest level since early October after its full-year adjusted pre-tax profit nearly tripled, boosted by last year’s hostile takeover of British engineer GKN.

Small-cap real estate agent Countrywide tumbled 12.4 percent as it forecast flat full-year earnings, citing more market weakness surrounding Brexit.

Financials, consumer stocks and real estate shares together knocked nearly 150 points off the mid-cap index.

But defence contractor Ultra Electronics jumped 11 percent to a more than five-month high after a rating upgrade from JP Morgan.

“Overall, investors in global equities, who have taken some of the best performing indices back to pre-Q4 rout highs, are now struggling to justify re-rating markets much higher,” City Index analyst Ken Odeluga summed up.

Reporting by Shashwat Awasthi and Muvija M in Bengaluru; Editing by Catherine Evans

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