WEDNESDAY MARKET CLOSE: Footsie’s Capita gains taxed by GSK

Outsourcing firm Capita set the pace at the top of the FTSE 100 Index after it achieved a 16 per cent rise in half-year underlying profits to £238 million.

The FTSE 100 Index finished just 2.81 points higher as its early rally ran out of steam. Picture: AP

The update prompted Investec to upgrade its rating on the stock from “hold” to “add” and caused shares to surge by almost 5 per cent or 55p to 1,210p.

Analyst Andrew Gibb said: “Whilst the current valuation clearly reflects the positive growth momentum in the business, it is difficult to ignore the strength in underlying trading and the premium this warrants.”

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Vodafone also did its best to prop up sentiment after former US partner Verizon reported a bigger-than-expected surge in second quarter revenues as it benefits from strong demand from wireless customers. The UK mobile phone giant, which is due to present its own figures on Friday, rose by 1.3p to 197p.

These and other positive results pointed the wider market higher, but the optimism was dashed by a midday update from pharmaceuticals giant GlaxoSmithKline.

The firm’s shares slumped 4.7 per cent after it reported a 22 per cent decline in half-year operating profits and warned that earnings per share were now likely to be flat this year.

Shares dropped 73.5p to 1,481.5p on the downgrade as the company also highlighted the impact of the stronger pound on prospects for its share buy-back programme.

The FTSE 100 Index finished just 2.81 points higher at 6,798.15 as its early rally ran out of steam.

Outside the top flight, regional airline Flybe lost initial gains seen after chief executive Saad Hammad highlighted further progress in the company’s turnaround.

The stock was up by 3 per cent at one stage but later closed a penny lower at 117p.