There’s been some more selling seen in European stock markets this morning with the FTSE falling back below the key psychological level of 7000 to trade at its lowest level of the month. As investors start to look towards year-end it will take a strong Santa Rally to recover from what has been a poor 2018 overall for the UK stock market, with the FTSE benchmark lower by almost 10% year-to-date. Despite declines of around half a percent for the blue-chip index on the day there are a few bright spots with 8 stocks gaining by 1% or more. The standout performer is Halma, with the health and safety kit supplier rallying more than 4% after reporting a rise of over 20% in pre-tax profits, 16% increase in revenues and a 7% boost to its dividend.
easyJet drops despite posting higher profits
At the other end of the index is easyJet with the budget airline’s stock dropping over 4% after investors have seemingly taken a dim view of the latest trading update. The firm announced a jump of over 40% in pre-tax profit to £578m for the past year on a 17% rise in revenues to £5.9B. There was also an increase in the dividend to 58.6p - a rise of 43% - in an earnings release that contained several positives. Despite the good news the adverse market reaction suggests that investors remain skeptical as to whether it is enough to halt the recent declines which have seen roughly a third of the market value erased in the last 2 months alone.
The two chief causes for concern in the release were an increase in average cost per seat from £53.78 to £57.26 as well as a sizable rise in net debt which nearly doubled in growing to £738M. Throw in the ongoing uncertainty surrounding Brexit and where that leaves the airline industry moving forward from the end of March next year and it is not too surprising that despite several positives, investors are choosing to focus on the negatives in this release.
