FRIDAY MARKET CLOSE: ‘Stalled’ FTSE pulled back by Petrofac

Share this article
Have your say

The FTSE 100 dropped back from an 11-week high after sentiment was hit by a heavy slump for energy services firm Petrofac.

Despite more encouraging news from the UK economy - with factory output growth enjoying its best quarter since 1999 – the index slipped 24.68 points to 6,814.57.

Brenda Kelly, chief market strategist at IG, felt the index was also hitting technical barriers.

“One word can be used to describe the FTSE 100 – ‘stalled’,” she said. “Each time we go towards 6,850 the buyers dry up and the index finds itself unable to get any further.”

Petrofac dived more than 15 per cent, down or 211p to 1,177p, after it warned its 2014 net profits could fall by as much as 11 per cent due to the poor performance in one of its divisions, wiping over £700 million off the firm’s value.

International Airlines Group, which owns British Airways and Iberia, was another big faller, even though it reported narrower losses for the first quarter of the year. Shares were initially higher but later stood 19.6p lower at 385p.

Engines giant Rolls-Royce fell more than 1 per cent after a downgrade by Barclays in which it warned that slow growth anticipated by management will continue for longer than expected. The broker cut its target price from 1,225p to 930p, causing shares to fall 12p to 1,001p.

Barclays itself was the focus of other brokers following its announcement earlier in the week that it will take the axe to 19,000 jobs by 2016. JPMorgan raised its price target to 305p from 285p and kept its rating at overweight, while Citi also put a 305p target on the shares, down a shade from 315p, but reiterated its “buy” rating. The shares still slipped 0.9p to 261.6p following their strong rise in the previous session.