TalkTalk and WPP pull index off Friday’s high - London Report

Did the markets overreact to TalkTalk hack? (Source: Getty)
A fall in advertising group WPP, while TalkTalk’s losses worsened in the wake of a cyber attack, weighed yesterday on the FTSE 100 as it slipped off two-month highs.

The blue-chip index ended 0.4 per cent lower at 6,417.02 points, having risen 1.1 per cent on Friday to its highest level in two months.

Commodity shares also fell as key industrial metals and oil dropped. The UK mining index and the oil and gas index fell 1.4 per cent and 1.1 per cent respectively, dragged down by declines of between 1.0 and 3.1 per cent in Anglo American, Glencore, Royal Dutch Shell and BP.

WPP fell 2.2 per cent to feature among the top decliners in the FTSE 100 index. WPP reported its sales growth had accelerated in the third quarter, but some traders said the numbers were not strong enough to justify a further rally in the stock, which had risen nearly 10 per cent over the last month.

“WPP numbers looked OK, just below expectations of 3.4 per cent on a like-for-like basis, but we shouldn’t also ignore the fact that the comparatives were quite favourable also, so naturally there is a bit of disappointment from these numbers,” said XTB director Joshua Raymond.

TalkTalk, which is in the FTSE 250 mid-cap index, extended the previous session’s sharp losses and was down 12.3 per cent, as it grappled with the effects of a cyber attack, first disclosed on Thursday.

However, David Battersby, investment manager at Redmayne-Bentley, said he was looking to potentially buy TalkTalk shares, adding that in his opinion the market had over-reacted.

He did not see a steep reduction in TalkTalk’s customer base and said that recent price declines, along with its dividend yield of around six per cent, had made the stock quite attractive.

On the positive side, Aberdeen Asset Management rose 2.9 per cent, the top gainer in the FTSE 100 index. The company denied press specul­ation it was looking for a buyer, but an earlier Financial Times report that it was courting suitors was enough to stoke bid hopes and push up its shares.

Analysts at RBC said Aberdeen was unlikely to look to sell after losing a quarter of its stock market value since April. “It is our belief that there is no sale process under way… We would be surprised if Aberdeen sold from a position of weakness, which we believe it is currently in,” analysts at RBC said in a note.

Related articles