17.30 Close: The FTSE 100 index at the close was down 4.81 at 6,815.75.
Early gains on Wall Street failed to stir interest, with the Dow Jones Industrial Average up 45.0 points, or 0.3 per cent to 16,588.1, while the broader S&P 500 and Nasdaq Composite indices added 0.2 per cent.
15.15:
The Footsie was moribund in late afternoon trade, nursing modest losses as investors hugged the sidelines ahead of the bank holiday weekend on nervousness about election outcomes in Europe and Ukraine.
No lead: Early gains by US stocks failed to stir any interest in the moribund Footsie.
With an hour and a quarter of trading to go, the FTSE 100 index was down 11.4 points at 6,809.1, just holding off the session low of 6,793.47.
US stocks were encouraged by data showing that sales of new single-family homes rose 6.4 per cent to a seasonally adjusted annual rate of 433,000 last month. Economists had expected an April sales pace of 429,000, compared with an originally estimated rate of 384,000 in March.
Jasper Lawler, market analyst at CMC Markets said: ’A strong housing market has been missing from the US recovery of late, if a housing recovery does emerge, the resulting wealth effect could boost consumer sentiment and spending while also encouraging business investment around construction.’
13.10: The Footsie remained weak in lunchtime trade with uncertainty over the outcomes of European parliamentary elections, as well as Ukraine’s presidential ballot, weighing on sentiment at the end of an easier week.
With traders looking ahead to a long bank holiday weekend, the FTSE 100 index was down 9.7 points to 6,810.9, on track for a 0.8 per cent decline for the week, the biggest weekly fall since April 10.
Tullow Oil was the main blue chip casualty, down 11.0p to 840.5p as the oil explorer said one of its wells in Ethiopia hit water.
No oil: Shares in Tullow Oil dropped after another disappointing drilling results in East Africa.
The stock has lost more than a third of its value since 2013 following a string of disappointing exploration updates.
Brian Gallagher, an analyst at Investec Securities said: ‘It’s another disappointing result in East Africa for Tullow and the market, in our view, already prices in success above the existing discoveries in this region.
‘This mean that Tullow needs to start finding the mark soon or the upside assumption could soon be challenged.’
Smiths Group was also a big FTSE 100 faller, dropping 11.0p to 1,304.0p after the x-ray technology firm warned that full year profit in its detection unit would be £25million below expectations.
Societe Generale cut its target price on Smiths Group following the announcement and said solving ‘operational shortcomings’ at the detection unit would likely take time.
In the banking sector, investors in Barclays appeared to be untroubled by a £26million fine for the lender after the City watchdog found failings in relation to the fixing of the price of gold over a nine-year period. Its shares rose 1.6p to 245p.
Transport group Go-Ahead surged 9 per cent higher after its Govia joint ventiue was awarded a new mega-rail franchise that includes the £6.5 billion Thameslink.
Go-Ahead shares rose 171.5p to 2,110.5p following the Department for Transport announcement which saw FTSE 250 rival FirstGroup miss out on the contract.
FirstGroup had been running a section of this operation under the First Capital Connect (FCC) banner since 2006, but FCC will disappear when the new seven-year TSGN franchise starts in September 2014.
The announcement saw FirstGroup’s shares take a tumble in early trading but they had pared most of their losses by lunchtime, off just 0.4p at 134.4p.
Shares in over-50s focused holidays-to-insurance group Saga managed to cling on to a marginal premium to their 185p offer price, which was the very bottom of its expected range
As first day conditional trading in the stock progressed it was trading at 185.25p.
10.00: The Footsie stayed subdued as the morning session progressed, with traders nervous ahead of results from UK local government and European parliamentary elections, although transport firm Go-Ahead stood out on the upside after being awarded a mega rail franchise.
By mid morning, the FTSE 100 index was 10.7 points lower at 6,809.9, cautious ahead of a long bank holiday weekend in the UK, failing to take inspiration from modest gains on Wall Street or a stronger performance from Japan’s Nikkei overnight.
Shares in transport group Go-Ahead jumped higher after Govia, in which it owns a 65 per cent stake, was handed a new rail operating contract that includes the £6.5billion Thameslink operation, plus the Southern and Great Northern franchises by the UK government.
Rail rivals: FirstGroup shares fell on news it has lost its First Capital Connect Thameslink franchise to Go Ahead group’s Govia venture.
FirstGroup had been running a section of this operation under the First Capital Connect (FCC) banner since 2006, but FCC will disappear when the new seven-year TSGN franchise starts in September 2014.
Investec Securities analyst John Lawson described the award as a ‘major coup for Go-Ahead’ giving the group certainty over its rail earnings for a number of years.
Go Ahead shares climbed 8 per cent, or 160.5p higher to 2,099.5p, while FTSE 250 rival FirstGroup fell nearly 4 per cent, or 4.8p to 130.0p.
Elsewhere, shares in medical and security equipment maker Smiths Group dropped 200p to 1,295.0p following a £25 million profits warning as its detection arm faced weaker demand in the third quarter.
Meanwhile, shares in over-50s focused holidays-to-insurance group Saga were priced at 185p today, the bottom end of its expected range, as conditional trading in the stock began.
While there was an early lift for Saga shares to as high as 195p, they settled back to 186.8p, just 1.8p up on its offer valuation.
Mike van Dulken, head of research at Accendo Markets said: ‘Although nothing like the Royal Mail (RMG) re-run that some had anticipated. While SAGA shares were eventually priced at 185p each, at the bottom of the initial 185-245p and downwardly revised 185-225p range this hasn’t stopped investors jumping in to get a slice of the iconic insurer-come-holiday name, however, early gains have been muted with the shares reaching highs of just 189p.
‘After Fat face pulled out of its IPO yesterday due to the sheer volume of London listings having dented the demand for new issuance, is this morning’s trading of a newly list £2.1bn name evidence that the top may have been reached in the retail IPO wave, and demand finally cooling?’
Another new issue today did better, however, with footwear retailer Shoe Zone trading up to 168.0p against an offer price of 160.0p.
08.20: The Footsie fell back in early trading today with investors eyeing results from local government elections in the UK and nervously awaiting the outcome of votes for the European and Ukraine parliament over the weekend.
In opening deals, the FTSE 100 index was down 9.9 points at 6,810.7, having closed just 0.5 point lower yesterday, with traders likely to be squaring positions ahead of the long UK bank holiday weekend given uncertainty over the election results.
Britain’s anti-EU UKIP party has made strong gains in local government elections, taking seats from both Prime Minister David Cameron’s Conservatives and the opposition Labour party, according to early results.
Subdued float: Shares in over-50’s insurance and travel firm Saga just ticked up early on after being priced at the bottom of its offering range.
Jonathan Sudaria, dealer at Capital Spreads said: ‘European traders are showing some hesitation ahead of the Ukrainian and European election results.
‘With the intensifying violence in the Ukraine, fears are that a presidential election will merely polarise the two sides and could be a trigger for an escalation of fighting.
‘Since the last European elections in 2009, we’ve had numerous bailouts, austerity, stubborn unemployment and crisis after crisis.
‘With the voting already underway, concerns are brewing that the corridors of power in Brussels could be full of euro sceptic anti establishment parliamentarians come Monday,’ he added.
There will be little else to provide direction today, with no important UK economic pointers scheduled for release, and only US new home sales data due at 3.00pm.
Corporate news was also thin on the ground with the main focus the start of conditional dealings in over-50s insurance and holidays firm Saga after its international public offering was priced at 185p a share, the bottom of its original range, valuing the company at £2.1billion.
In early deals, Saga shares were trading at 186.4p.
Stocks to watch include:
ASTRAZENECA – BlackRock, AstraZeneca’s largest shareholder, wants the drugmaker to resume talks with Pfizer about a potential sale eventually, but backs the Anglo-Swedish firm’s decision this week to reject the US group’s current bid, according to two people familiar with the matter.
SMITHS GROUP – The x-ray technology firm has warned on profitability at its detection unit.
GO-AHEAD /FIRST GROUP – The British government has awarded a contract to run the expanded Thameslink rail network in London to Govia, a joint venture led by transport operator Go-Ahead, in a blow for FirstGroup which currently operates part of the line.
CLOSE BROTHERS – The financial group said the loan book of its banking division grew to £5.1billion during the third quarter and that it was confident of delivering a ‘strong’ result for the financial year.