StockMarketWire.com - With political storms brewing on both sides of the Atlantic investors found little appetite for riskier assets, such as shares. Europe's leading indices dropped sharply across the board, although the FTSE 100 fared better, finding support from the tumbling pound as sterling traders optimism vanished.

The pound fell around 0.4% against both the euro and Japanese yen, but lost more than 1% versus the dollar.

At the close the benchmark FTSE 100 index was down 71.07 points, or about 1%, at 7,220.36.

LARGE CAP COMPANIES

The UK's tobacco firms British American Tobacco and Imperial Brands both rallied strongly in afternoon trade after Altria and Philip Morris pulled the plug on their proposed $200bn merger.

BAT led the way with its 3.3% gain at £29.245, with Imperial adding 2.2% to £20.655.

The UK's number two supermarket chain Sainsbury saw its shares rally 1.6% to 216.5p after a trading update showed sales edged up in the second quarter, but fell on a like-for-like basis.

The company also said it expected its annual profit to meet consensus market expectations, though it warned of a fall in the first half.

Health, safety and environmental equipment manufacturer Halma fell 3% to £19.14 despite issuing a largely upbeat update.

Halma admits modest softness in parts of its business but is comfortable that it remains on track to meet expectations, plus it flags the boost it is getting from the weak pound. Halma continues to trade within 10% of its £20.94 all-time high.

Defence contractor Babcock International gained more than 6% to 575.6p after it confirmed its full-year guidance for revenue, operating profit and free cash flow.

Imperial Leather soap supplier PZ Cussons slipped 3% to 206p as it warned that its underlying results for the full year would be flat, amid tough trading conditions in Nigeria, the UK and Australia.

Sports car maker Aston Martin Lagonda reversed more than 4% to 550.8p after it raised $150m from a bond issue to buffer the company from a tough trading environment, with an option to raise another $100m.

Water supplier United Utilities ended the day flat at 790.8p on announcing that it expected to post higher revenue and profit in the first half of its financial year.

Boohoo clawed back early afternoon losses to nudge 0.6% higher at 267.4p after the online fashion retailer followed up a sales guidance upgrade in early September with a bumper 83% jump in first-half profit.

Boohoo shares had rallied from 243p since 5 September, when it announced the improved sales outlook.

Specialised technical product supplier Diploma cheapened by 0.8% to £16.54 on news that it agreed to acquire seals and surgical products businesses in the UK and Australia, respectively, for a combined £15.5m.

London West-End property investor Shaftesbury recovered from an earlier slide to gain 1.6% to 896.5p after it announced that it was continuing to achieve rents at or above estimated rental values, as most of its retail occupiers enjoyed 'busy' conditions.

SMALLER COMPANY MOVERS

Ceramics company Coral Products recovered from larger losses earlier but still ended the day down more than 14% at 6p after it revealed sales and profits in the first four months of its financial year were below management expectations.

Software supplier WANdisco plunged close on 9% to 475p as it booked a deeper first-half loss as rising expenses, partly owing to increased headcount, overshadowed an improvement in sales.

Pre-tax losses for the six months through June amounted to $16.6m, compared to losses of $11.2m on-year. Revenue rose to $6m, up from $5.7m on-year, but cash overheads rose to $15.5m, up from $14.6m.

Hostel group Safestay rallied close on 5% to 33p, as it posted improved adjusted earnings, buoyed by a 6% rise in its average bed rate to £19.50.

Customer engagement software provider Netcall stayed stubbornly flat at 25.5p ecen though it booked a higher full-year profit as revenue rose 5%.

Pre-tax profit for the 12 months to 30 June rose to £0.75m, compared to a profit of £0.05m a year earlier. Revenue increased to £22.9m, up from £21.9m.

London Southend Airport owner Stobart reversed earlier losses to nudge 0.5% higher to 128.4p after reporting a jump in first-half passenger volumes.

The company also warned that it was taking a more cautious approach to the second half owing to Brexit-related economic uncertainty.

Technical fluid power-products supplier Flowtech Fluidpower tumbled 5.5% to 110p after it posted an 8.5% fall in first-half profit and warned that recent trading had been hit by Brexit uncertainty.

Pre-tax profit for the six months through June fell to £3.8m, down from £4.1m on-year.


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