Market Report: Capita hit as financial firms dither after Brexit

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Brexit uncertainty strikes again and today it was outsourcer Capita’s turn to feel the heat.

The company, which has contracts with firms ranging from Debenhams to the Department of Work and Pensions, said the Leave vote had spooked its financial services clients.

“We are continuing to experience some delays in decision making in the short term,” chief executive Andy Parker said. 

However, he wasn’t expecting the pause to last long and said Brexit would throw up “incremental opportunities” further down the line that would offset the weakness.

Despite a 5% rise in sales and 8% jump in pre-tax profits in its first half, Capita was the footsie’s biggest loser, dropping 22.5p to 966.5p.

The retreat put it out of sync with the rest of the blue-chip index, which was 18.92 points to the good at 6742.95. 

News that the economy grew 0.6% in the quarter ended in June spurred it on, as did a larger-than-expected economic stimulus package from the Japanese government. CMC Markets’ Michael Hewson said the GDP number could give the Bank of England, due to make a decision on interest rates next week, more time to reflect on policy options.

Among the FTSE 100’s big winners were Dixons Carphone, up 8.4p at 344.3p, BHP Billiton, 23.8p higher at 974.8p and Burberry, which rose 33p to 1348p.

On the FTSE 250, a return to profit for Africa-focused Tullow Oil in spite of the oil price slump catapulted shares in the group 4.4p higher to 204p. Liberum analysts urged caution, however, flagging possible disappointment in its drilling programme in the second half and potential delays in developments in east Africa.

On Aim, investors in easyHotel, whose largest shareholder is Sir Stelios Haji-Ioannou’s investment vehicle, checked out despite new franchise agreements in Istanbul and Lisbon designed at boosting brand awareness. The shares dipped 0.9p to 77.1p.


Bad day: Sir Stelios Haji-Ioannou (Adrian Dennis/AFP/Getty Images)

City broker Cenkos was in the line of fire after confirming an investigation by the Financial Conduct Authority over its stewardship of scandal-hit Quindell, now known as Watchstone. Talk of a penalty in the hundreds of thousands of pounds sent the shares tumbling 5.5p to 119.8p.

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July 27, 2016 |
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