The shares of besieged construction and services operator Carillion were down more than -37% mid-afternoon today (more of below) though the worry did not seem to infect rivals like Balfour Beatty or Morgan Sindall. The FTSE 100 fell slightly as the pound climbed. Mid-afternoon sterling was up +0.06% though still under the $1.32 handle at 1.3198.
In Europe earlier European Central Bank boss Mario Draghi warned that, despite better economic confidence, the region was still heavily dependent on cheap cash from his own bank. Like the UK, much of the EU population is struggling from poor wage growth which means the EU stimulus taps look likely to remain open – for the moment.
“As the labour market tightens and uncertainty falls, the relationship between slack and wage growth should begin reasserting itself. But we have to remain patient,” he said in Frankfurt.
Some German unionised workers – IG Metall, for instance – have begun to push for inflation-busting wage increases but they are an exception to the rule (higher German wages, built on higher demand and output, would help EU-region inflation growth though the speed of creep is frustratingly slow).
The euro edged up slightly to 1.1785 as Draghi’s words were being absorbed, hitting Europe’s major bourses. Tonight, the FTSE 100 closed just six points lower at 7,380 with United Utilities and Mediclinic Int seeing -5.4% and -3.7% share price losses. Across the water US shares remain on the defensive as investigators deepen their probing of possible Russian links with the US 2016 election.
- UK FTSE 100 7,380 -0.08%
- Dow 23,405.74 -0.23%
- S&P 500 2,581.58 -0.16%
- Nasdaq 6,786.90 -0.09%
- Nikkei 225 22,396.80 +0.20%
- DAX 13,017.68 -0.23%
- CAC 40 5,3125.22 -0.40%
- Gold 1,285.60 +0.58%
- Oil WTI 56.05 +1.63%
Carillion, the Wolverhampton-based construction player employing 30,000, issued its third profit warning since midsummer at 7am this morning. Its shares plummeted, worth just 24.06p at close of trading tonight, a -42% drop. Carillion blamed much of the profits anxiety on public-private partnership woes as well as slim margins.