The FTSE 100 was down 23.49 points at 4099.37 while the FTSE 250 fell to 5763.95, down 96.44 points, at 11.59am.
A warning on commuter demand from Stagecoach, down 17.43 per cent or 29.9p at 141.6p, unsettled the transport sector. The South Western franchise operator said its rail operations were at risk as the economic slowdown gathers pace in the months ahead, impacting peers including Firstgroup, down 8.08 per cent or 34.75p at 395.25p, and Go-Ahead, down 14.25 per cent or 167p at 1005p.
Business software group Sage was the strongest on the Footsie, gaining 4.44 per cent or 7p to 164.8p, after posting final results, revealing a 3 per cent rise in pre-tax profits to £273.4m. Beyond the figures, the company said that growth in subscription revenues was continuing to offset the weakness in software revenues.
In response, Deutsche Bank reiterated its “buy” stance on the stock, saying:
“Sage remains a key pick in the context of the sector”
“We feel it will prove resilient through the cycle and we feel these numbers and the outlook vindicate this view.”
Rio Tinto, 9.29 per cent or 118p at 1152p, remained depressed amid mounting concern that it might have to resort to a dilutive rights issue to meet it debt repayment obligations. This morning’s decline came despite a “buy” note from Citigroup, which highlighted alternative options for the mining group.
“In the current economic conditions it is only prudent that Rio significantly curtails project capital expenditure and cuts dividend growth to maintain cash flow,” the broker said, adding:
“Asset divestments are difficult in the current environment, but not impossible.”Reuse content