Market Report: Royal Mail closes at its highest for almost a year


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The Independent Online

Royal Mail has closed at its highest for almost a year as traders bought into an upbeat assessment of the delivery firm.

Cantor Fitzgerald upgraded its rating on the stock to “hold” from “sell” and raised its target price, praising last week’s “solid” set of full-year results, in particular its “healthy uplift” in operating margin.

The broker also flagged up its expectations for low growth and possible head winds in the form of wage negotiations and possible industrial action next year, but investors were undeterred and sent the shares up 18p to 521.5p – their highest closing price since last June.

The FTSE 100 index, however, headed in the other direction, dropping 82.73 points to end at 6,948.99, a two-week closing low.

The retreat was driven by renewed fears over Greece, which is yet to reach a deal with its creditors despite a 5 June deadline for part of a €1.6bn (£1.1bn) repayment to the International Monetary Fund.

Action elsewhere in Europe also took its toll, with a good showing for anti-austerity party Podemos in Spain’s local elections hitting eurozone financial stocks.

Royal Bank of Scotland slipped 9.9p to 345.2p, Barclays fell 5.25p to 264.9p and Lloyds was 1.16p lower at 86.82p.

Meanwhile, falling oil and metals prices kept resources stocks in check, with miner Fresnillo the blue-chip index’s biggest faller. It sank 27p to 736p, while Randgold Resources lost 168p to end at 4,611p.

There was better news for over-50s group Saga, which rose 1.2p to 211.2p, after naming Nicola Audhlam-Gardiner as managing director. Currently marketing director for Williams & Glyn, she joins the company in August.

Industrial chain maker Renold also rose, adding 2.75p to hit 71.25p, on the back of an almost 50 per cent increase in underlying adjusted operating profit for the full year.

Under pressure trading platform Plus500 got some respite, up 37p to 285p on the news that Odey Asset Management had hiked its stake in the firm. Crispin Odey’s fund now owns 19 per cent of Plus500, which will face investors at its AGM on Wednesday.