UK stocks jump higher as Sports Direct shares tumble
The UK markets closed higher on Monday, despite Mike Ashley’s Sports Direct weighing down on stocks after its shares fell to an all-time low.
The FTSE 100 closed up by 25.75 points at 7,531.72 points at the end of trading on Monday.
Sports Direct hit an all-time low on Monday after investors were spooked by the company’s announcement that it has been forced to delay the publication of its results due to complexities related to House of Fraser.
Although shares moved slightly higher through the day, they still closed down by 25.2p to 238.2p for the day’s trading.
David Madden, market analyst at CMC Markets UK, said: “Warren Buffett once said ‘be fearful when others are greedy, and be greedy when others are fearful’, and it seems that Mike Ashley is expanding his empire while others are running scared.
“Shoppers are becoming savvier, and retailers are too keen to offer promotions – often at the expense of their margin – and some traders are concerned Sports Direct have become too greedy, but we will now have to wait a while longer to discover the finer details within the company’s annual figures.”
As a whole, the European markets traded slightly higher on the back of strong economic growth figures from China.
The German Dax increased by 0.52%, while the French Cac rose by 0.09%.
The Dow Jones meanwhile opened slightly lower ahead of the start of the second-quarter reporting season.
Sterling helped to buoy the UK markets after it slipped lower following a recent rebound as Brexit anxiety continues to concern traders.
The pound was down 0.43% at 1.251 versus the US dollar, and down 0.34% at 1.111 against the euro.
In stocks, GlaxoSmithKline edged higher after it hailed a major step forward for a cancer drug it acquired last year, announcing that it has been effective in stopping the spread of ovarian cancer.
The announcement was a significant boost for the drugs giant, which has come under pressure from investors who are concerned that it is failing to keep pace with some of its industry peers.
Shares in GlaxoSmithKline closed higher, up 14.8p at 1,638.6p.
London-listed Chilean-focused miner Antofagasta saw shares jump higher after it won a seven-year legal battle with the Pakistan government.
Antofagasta shares moved up 34.6p to 897.6p on Monday.
Shares in Finsbury Food Group lifted after the bakery business was buoyed by its expansion in gluten-free in the second half of the year.
The own-label bakery firm said group like-for-like revenues rose 3.1% to £299.3 million for the year to June 29, as sales accelerated towards the end of the year.
Finsbury closed 2.5p up at 67p at the close of trading.
The price of oil was largely unmoved, dipping slightly amid concerns about falling US stockpiles.
The price of a barrel of Brent crude oil rose by 0.57% to 66.5 US dollars.
The biggest risers on the FTSE 100 were Just Eat, up 26.2p at 638.2p, Flutter Entertainment, up 284p at 7,010p, Antofagasta, up 34.6p to 897.6p, and Evraz, up 15.2p at 633.4p.
The biggest fallers on the FTSE 100 were Micro Focus, down 99.8p at 1,664p, Persimmon, down 57.5p at 1,932p, Vodafone, down 1.54p at 130.2p, and United Utilities, down 9p at 768.8p.