At the close: FTSE 100 index closes down on Sports Direct, Old Mutual

 
James Nickerson
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South African finance minister Nhlanhla Nene was sacked today (Source: Getty)

The FTSE 100 index slid in Thursday's trading despite gains by Glencore as both Sports Direct and Old Mutual tumbled.

The index closed 0.63 per cent down at 6,088 points.

Sports Direct slumped after Mike Ashley's retailer posted underwhelming first half results and the company was criticised for staff working conditions. Group revenue ticking up 0.1 per cent to £1.43bn, while underlying pre-tax profit rose 3.6 per cent to £166.4m and EBITDA rose 7.6 per cent to £218.5m. The company's share price closed 10.97 per cent down at 592.5p.

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"Investors have been left disappointed by the retailer’s weak sales performance, particularly across its struggling premium lifestyle division, at a time when many of its high street rivals are streaking ahead," Julie Palmer, partner at Begbies Traynor, said.

She added: "“Shareholder rebellions and public protests around Sports Direct’s controversial zero-hour contracts and questionable warehouse working conditions have kept the retailer in the public eye for all the wrong reasons. Meanwhile this week’s positive update from main rival JD Sports has yet again shone a light on the gaps in the retailer’s multi-channel strategy and in store customer experience."

Meanwhile Old Mutual wasn't far behind, losing 10.85 per cent to close at 174.2p per share. The company has a lot of business in South Africa, where South African finance minister Nhlanhla Nene was sacked today.

Read more: Glencore shares jump as it unveils more debt reduction

The news also knocked Anglo American and Investec. Anglo American closed 0.33 per cent down at 318.65 per share, while in the FTSE 250 Investec shed 11.09 per cent to close at 469.9p per share.

However, Glencore shares surged after investors cheered its plans for more debt reduction and spending cuts. In a statement released ahead of its annual investor day, the commodities miner and trader said it was now targeting net debt of between $18bn (£11.9bn) and $19bn by the end of 2016, lower than the previous target of $20bn.

Glencore's share price closed 7.01 per cent up at 88.9p, leading the FTSE higher.

"It’s prudent for Glencore to reduce liabilities when its business is under pressure from falling commodity prices. Going the extra mile on asset sales probably reflects a determination by management to put to bed fears in the market about the company’s solvency," said CMC Markets analyst Jasper Lawler.

Positive updates from both Centrica and TUI helped avert deeper losses in the FTSE 100. TUI closed 4.64 per cent up at 1,173p per share, while Centrica's share price rose 2.62 per cent to 211.5p per share.

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