THURSDAY MARKET CLOSE: WPP falls as profits hike disappoints

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Shares in advertising and marketing giant WPP slid more than 3 per cent as it became the latest blue chip to fall foul of high expectations on results day.

The stock fell 46p to 1,285p after it trimmed earnings guidance and cautioned that competitive pressures were becoming “more and more intense”.

Michael Hewson, chief market analyst at CMC, said: “An 18.7 per cent rise in profits wasn’t enough to stop WPP from slipping sharply as a strong pound caused the headline number to come in slightly below expectations.”

Despite Royal Bank of Scotland and insurer RSA also weighing on the FTSE 100, the index staged a recovery during the afternoon session to close 11.12 points higher at 6,810.27.

RBS slumped almost 8 per cent, down 27.4p to 326.6p, as it posted dire figures amid warnings in the City that many of the lender’s targets for a return to health were a long way from being achieved.

RSA was also sharply lower after former RBS boss Stephen Hester axed the company’s dividend and launched plans for a £775 million rights issue. The shares slumped 4.1p to 98.1p.

Other insurers were also under pressure as the sector counts the cost of a rising bill for flood claims and difficult conditions in the motor insurance market. Aviva was 3.9p lower at 469.1p, while Admiral was 15p cheaper at 1,433p.

Outsourcing group Capita led the risers’ board as it said pre-tax profits rose 14 per cent to £475m in 2013. Shares were 73p higher at 1,158p.

Meanwhile mail and parcels group DX soared as it debuted on the Alternative Investment Market. The firm raised about £200m with the shares issued at 100p each, and closed its first day 130p, making it the latest in a line of London flotations to reward early backers.