Tuesday’s Master Investor Market Report

– The FTSE 100 fell 0.42 points to 6,710.10.
– The FTSE 250 climbed 7.46 points to 17,736.19.
– The FTSE All Share dropped 0.07 points to 3,660.84.
– The FTSE AIM All Share finished 3.15 points higher at 767.66.

The UK returned to inflation in May after April’s brief dip into deflation territory. The Office for National Statistics said that prices were 0.1% higher than a year ago, with the increase driven by fuel costs and increased air fares. The rise was in line with a consensus estimate published by Reuters. “The big picture is that inflation is likely to remain extremely low throughout the rest of 2015,” argued Samuel Tombs, Senior UK Economist at Capital Economics, while adding that this does not place any pressure on the Bank of England to increase interest rates.

The ONS also said that property prices saw their sharpest drop in growth since 2006 during April, most likely due to fears of a Labour victory in the general election and the subsequent risk that a “mansion tax” would be implemented. The annual rate of increase declined from 9.6% in March to 5.5% in May.

Hospitality outfit Whitbread (WTB) upped total sales by 12.5% in the first quarter, driven by strong performances by its Costa Coffee and Premier Inn brands. However, the restaurants arm increased its turnover by just 1.6%. The results were slightly lower than Shore Capital had hoped and Analyst Greg Johnson said that “although the trading outlook is favourable and the group’s five-year expansion plans appear deliverable we continue to believe that the market will at some point question the long-term growth potential in the UK”. The shares rose by 25p to 5,065p.

Housebuilder Crest Nicholson (CRST) earned pre-tax profits of £58.3 million during the six months ended 30th April, a 52% rise over the comparative period. Group revenues improved by 38% to £333.2 million during the half year on the back of improved sales prices and an increased number of completions. The company has increased its volume targets. Shares in Crest Nicholson climbed 11.5p to 556p.

Press reports have suggested that GlaxoSmithKline (GSK) may soon face takeover bids from parties such as Roche or Johnson & Johnson. It has been indicated the consideration in such a deal would most likely be in the region of 1,900p per share, valuing GSK at £92 billion. Shares in the firm closed 15p higher at 1,366p.

Shares in industrial equipment outfit Ashtead (AHT) fell by 30p to 1,097p despite the company posting record profits before tax of £490 million for the year ended 30th April. Analysts from Panmure Gordon reiterated a “buy” rating and said the firm showed good potential for near-term growth.

Explorer Sound Oil (SOU) has abandoned its second appraisal well at its Nervesa Italian onshore discovery. The company had discovered gas at the site and achieved reperforation, but was unable to stabilise the flow rate. As a result, Sound shares sank 4.65% to 15.375p. The well may be reused as part of a later horizontal drilling project.

Shares in APR Energy (APR) plummeted 25.4% to 260p after the firm announced that full year results would be below market expectations due to delayed negotiations, adverse exchange rate movements and higher than anticipated demobilisation costs. A number of projects that the company had expected to book in the final quarter of 2015 have been pushed further down the pipeline. APR also informed the markets that its COO has stepped down with immediate effect.

Finsbury Foods (FIF) dropped 1p to 84.5p after it completed the acquisition of Johnstone’s Just Deserts for an undisclosed consideration. This boosts the firm’s presence in the ambient packaged cakes market, which was estimated to have an annual value of £962 million in 2014.

Tomorrow’s news today

Betfair (BET), Berkeley Group (BKG), and Severfield (SFR) are all due to report full-year results on Wednesday.

The Bank of England will make a decision on interest rates and UK unemployment data will be published.

Quote of the day

“Success depends upon previous preparation, and without such preparation there is sure to be failure.”
– Confucius