WEDNESDAY’S MARKET CLOSE: Miliband’s plan dents utilities stocks

Share this article
0
Have your say

Labour leader Ed Miliband’s plans to halt electricity and gas price rises if he wins the next general election took their toll on utilities stocks today.

SSE, the Perth-based owner of Scottish Hydro, dropped by 5.6 per cent or 91p to 1,489p, while Scottish Gas-owner Centrica – which also turned ex-dividend, meaning that buyers are now not entitled to the latest shareholder pay-out – fell by 5.3 per cent or 21.1p to 375.6p.

Analysts have estimated that Miliband’s plan to impose a cap on business and consumer energy bills until January 2017 could cost companies £4.5 billion.

More than £1bn was wiped off the value of utilities stocks after Centrica warned that Miliband’s move could make it uneconomic for any electricity firm to operate in the UK.

Brenda Kelly, senior market strategist at IG Index, said: “His promise to freeze gas and electricity prices, subject to being elected, has effectively rendered the utility sector helpless to a swift sell-off.”

Cruise ship operator Carnival was the biggest faller in the FTSE 100 index for the second day running following yesterday’s profit warning. The stock fell 6.7 per cent or 152p to 2,106p.

The wider Footsie edged 19.93 points lower to 6,551.53 as investors continued to fret about the outlook for the United States, where Congress needs to approve a further increase for the debt ceiling for the world’s biggest economy.

Shares in BAE Systems took off after speculation that the defence company is in the running for a £5 billion South Korea jet fighters deal. The stock lifted 2 per cnet or 10.4p to 461.3p.

Laura Ashley tumbled by 9 per cent – or 2.25p to 24p – after the home furnishings company reported a sharp drop in half-year profits.

Back to the top of the page