FTSE Slips as Engineering Companies Struggle

The FTSE 100 slipped slightly on Thursday, giving up a lot of the gains it enjoyed during the previous session, as engineering companies, including Smiths Group and Weir Group struggled amidst concerns regarding the outlook of Rotork, a valve-automation company.

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shareprices.com - Friday, September 18, 2015

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Rotork makes equipment for the oil, gas, nuclear and power industry, and after announcing an expected fall in full-year revenues and operating profits, and stating that August had been “particularly weak”, it saw its shares fall by 10.8 percent.

Smiths Group fell by 4.2 percent, with traders blaming that fall on Rotork’s update.

Engineers have been facing a grim outlook for some time now as oil prices continue to weaken. This has produced a challenging environment for companies that are involved with the commodities sector, and has hampered the FTSE 100 because of its heavy exposure to that sector.

By the close of trading, the FTSE 100 was down by 0.7 percent, at 6,186.99 points. This offset the 1.5 percent gains which it enjoyed during the previous session and had brought the index to a one-week high.

Trading volumes were slightly lower than normal as some investors were reluctant to make any commitments, given that they were waiting for news from the US Federal Reserve, who are engaged in a two day long policy meeting. One of the issues on the table at the meeting is whether or not to raise interest rates, which have remained at an all time low since the start of the financial crisis more than 7 years ago.

 

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