Markets Report: Mothercare investors throw a tantrum

Elsewhere, London’s FTSE 100 index fell by 23.86, or 0.35pc, to 6,798.56 points after weak results from Barclays and Aberdeen Asset Management failed to rouse traders from bank holiday induced hangovers.

Barclays lost 13.50, or 5.22pc, to 245p after profits at its investment bank were shown to have halved in the first half, dragging the bank’s groups profits 5pc lower to £1.69bn. The grim update, which has laid bare the dwindling nature of its fixed income business, dragged the FTSE 350 banks index 1.45pc lower to £4488.87. Banking rivals Royal Bank of Scotland also lost 6.5p to 352.2p, Lloyds Banking Group fell 1.12 to 78.5p, and Standard Chartered edged 7 down to £12.82.

Meanwhile, Aberdeen Asset Management reported a 2pc drop in first-half revenues and a 3pc decline in underlying pre-tax profit to £217m on the back of emerging market woes. The group said that its acquisition of Scottish Widows Investment Partnership (SWIP) had boosted the group’s assets under management to increase to £324.5bn. However, Aberdeen boss Martin Gilbert’s choice of phrase that they were a “resilient set of numbers” pushed the company’s shares down 10.50, or 2.35pc lower. “Emerging markets continue to be volatile and Aberdeen is still seeing outflows in its biggest themes. With the valuation no longer at a discount to the sector, we cut to a “Hold” and retain our price target of 460p” analysts at Canaccord commented. The bearish results also meant rival Schroders see-sawed during trading yesterday to close 1 up in positive territory to £26.14.

Meanwhile Lloyd’s of London insurer Hiscox revealed it had a “small exposure” to the Malaysian MH370 missing airline and the Korean ferry disaster which has seen death toll rise to 260. The risk was included in the company’s “diverse list of losses”. However, Hiscox was boosted by a 2.3pc lift in premiums to £501.6m during the first quarter which lifted the group up 19.50 to 731p.

The housebuilding sector helped to limit market losses with Countrywide predicting a 10pc to 15pc growth in volume this year. “Countrywide’s shares look attractive at current levels following the estate agent chain’s strong first-quarter results,” said analysts at Panmure Gordon.

Equity analysts at Barclays kept their heads down and away from the bank’s “death spiral” by scribbling a bullish sector note on the house builders “Against an improving backdrop, the recent sell off of house builders warrants close attention. We see strong fundamentals: greater visibility provided by the extension to the Help to Buy scheme; a largely disciplined land market; and a more supportive planning system. Where headwinds exist, notably the threat of rising interest rates, they remain relatively benign in our view.”

Countrywide lifted by 5, or 0.85pc to 595p, Persimmon was boosted by 51, or 3.84pc to £13.78, although Redrow fell by 3.50, or 1.15pc, to 301.5p.

Just Eat rose by 10, or 4.5pc, to 230p after announcing a 51pc uptick in takeaway orders in the three months to 31 March in its maiden interim management statement. Despite the gains, Just Eat is still significantly below its listing price of 260p per share which valued the company at £1.47bn, more than 100 times its underlying earnings of £14.1m.

Shares in Sainsbury’s moved up 12.1 to 333.40p ahead of the grocer’s full-year results tomorrow. Analysts believe that its profits will be hit by the increasingly fierce competition from discounters Aldi and Lidl. It has been reported that a number of US hedge funds including Adelphi, Eton Park and Lone Pine Capital have built up big short positions in Sainsbury’s. The results will be the last full-set of numbers from Justin King after ten years at the top of the supermarket.

Meanwhile commodities goliath Glencore Xstrata rose 1.5 to 320.7 after beating market forecasts with a 24pc increase in copper production to 382,000 tonnes in the first quarter of 2014, mainly due to output expansion at its African operations and to higher grades at its South American mines.

Staying in the mining sector, Anglo American sank 22.5 to £15.42 after the strike action at its South African platinum mines, which has already lasted four months, looks set to continue.

However Gemfields provided some sparkle in the mining sector after reporting a 59pc increase of revenues from the Jaipur auction of traded emeralds. The Aim-listed miner, which has Hollywood actress Mila Kunis as an ambassador, said that it realised an average price of $50 per carat rising 1.75 to 39.50p. The company said that 21 out of 41 emerald lots were sold, generating gross revenues of $13.5m.

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