FTSE flat as G4S shares fall again
Fears over reputational damage and uncertainty caused by the expected departure of chief executive Nick Buckles added to strain on the stock, which lost another £400 million in value as it slid for a third session in a row.
G4S was comfortably the session's biggest faller, dropping 24.45p to 254.4p as stockbroker Seymour Pierce removed its buy rating on the stock and slashed its own forecast for profits this year by £60 million.
Analyst Kevin Lapwood said there will be short-term repercussions but that G4S's overall track record with the UK Government meant it should still benefit from outsourcing opportunities in the longer term.
National Grid was 2% lower, off 15.25p to 677.75p, after regulator Ofgem said it planned to allow £22 billion of investment in Britain's gas and high voltage electricity networks.
The company had suggested that bills could increase by between £15 and £20 but Ofgem has limited this under its "price control" regulation. National Grid is concerned that Ofgem's proposals mean it will not be able to encourage the investment needed in the UK's infrastructure and cover the implicit risk associated with such major projects.
Other high-profile fallers included Barclays on the day the industry's Libor-rigging scandal returned to the spotlight with MPs due to quiz former chief operating officer Jerry del Missier. Shares were 5.15p lower at 157p. Lloyds Banking Group was down 0.2p at 30p and Royal Bank of Scotland slipped 1.5p to 204.95p.
Software firm Sage, which provides accountancy, retail and payroll products to six million customers, fell 3% after it said conditions in continental Europe remained tough, offsetting "good growth" in the UK and Ireland and improved trading in North America. Analysts including Numis Securities cut earnings forecasts by between 1% and 2%, leading to a fall in shares of 9.25p to 275.75p.
Technology firm Smiths Group was one of the biggest risers in the top flight, up 18p to 1055p, after it sold its minority stake in Cross Match Technologies for up to 77 million US dollars (£49.4 million). The stock also benefited from a broker upgrade.