London stocks held steady on Thursday, with investors on both sides of the Atlantic on the fence ahead of a U.S. jobs report due at the end of the week. CMC Markets stood out, with shares plunging sharply after it warned of a slowdown in trading activity.
Among smaller companies, shares of CMC Markets
slid 27% after the spreadbetter and online trading company warned that it expects lower income for the year ended March 31, following more subdued trading activity in the latter summer months.
While underlying fundamentals remain robust with active clients up around a third from pre-pandemic levels, CMC Markets said market activity has remained subdued on the back of reduced volatility. Peel Hunt analysts Stuart Duncan and Robert Sage said they are putting their price target of 595 pence under review.
Active client numbers are about one-third higher than pre-pandemic levels, cash balances remain at records, but reduced volatility, fewer reasons to trade and possibly clients taking holidays as COVID restrictions have eased, have contributed to a slowdown in market activity, the analysts said.
“We take some comfort from client numbers remaining higher, as this should indicate that when market conditions change, CMC should benefit from increased trading activity,” the analysts said.
In the FTSE 100, shares of Melrose Industries
surged 5% after the U.K. turnaround specialist said it returned to profit and reported better-than-expected trading. Strong profit margins and earnings per share, along with lower net debt, were other pluses, and the company said its balance sheet will allow for a significant further capital return next year, noted Neil Wilson, chief market analyst for Markets.com.
Shares in Barratt Developments
tumbled 4% even after the home builder reported a strong profit, which comes amid some concerns that various tax breaks for potential buyers are coming to an end in the U.K.