Wood Group, G4S lead London market higher
By Simon Kennedy
Published: Aug 23, 2011 11:50 a.m. ET
Shares of miner Fresnillo drop after recent strong gains
SimonKennedy
LONDON (MarketWatch) — Britain's benchmark stock index rose Tuesday, led by security provider G4S PLC and engineering firm John Wood Group PLC after both reported strong first-half results.
The FTSE 100 index (UKX) climbed 34.12 points, or 0.7%, to end at 5,129.42, as other European markets also posted gains, helped by private-sector data from China and Germany that weren't as weak as some economists had feared. Also see Europe Markets.
G4S (GFS) was the top performer on the main index, rallying 8.5% after the company reported a 3% rise in profit and said organic growth is improving in most of its markets.
The group, which is the biggest employer on the FTSE 100, said it has a "healthy pipeline" of bidding opportunities, particularly for contracts from the U.K. government. Outsourcing opportunities from central banks and commercial lenders will also provide opportunities for its cash transportation arm in the medium term, the group said.
Shares of John Wood Group (WG.) rose 4.6% after the firm reported a 25% rise in earnings before interest, tax and amortization to $192 million, lifting its dividend payout and saying market conditions improved during the first half of the year. Read more on the Wood Group results.
On the downside, silver and gold miner Fresnillo PLC (FRES) was the biggest faller on the benchmark index, slumping 7.2% as precious metal prices dropped and after a strong run for the stock in recent weeks. Up to Monday's close, Fresnillo had surged more than 50% since mid-May as gold and silver prices rallied.
Atif Latif, director of trading at Guardian Stockbrokers, said that investors are switching out of Fresnillo and gold miner Randgold Resources Ltd. (RRS) into other resource stocks, including Glencore International PLC (GLEN) ahead of its results.
Shares in Randgold closed down 3.4% Tuesday, while Glencore, which reports its half-year figures on Thursday, rose 3.5%.
Among mid-cap stocks, shares in Charter International PLC (CHTR) soared more than 20%. The engineering company, which received a takeover approach from Melrose PLC over the summer, said Tuesday that it is also in talks with another company about a possible bid, though it cautioned that the talks are still at an early stage.
Shares in Melrose closed up nearly 3%.