FTSE flatlines; Rexam gains as profits rise

Rexam (REX.L) shares advanced on Wednesday after Europe's largest drinks can maker posted a 15% increase in full-year profit, as Britain’s FTSE 100 wriggled slightly higher amid persisting caution over Europe’s debt woes.

The UK index of blue-chip shares edged up 0.05%, or two points, to 5,930 and the All Share index improved 0.05%, or two points, to 3,068. See the FTSE’s performance and the index’s top winners and losers.

Galliford jumps

Rexam rose 10p to 394p, topping the FTSE 100 leader board, after maker of Red Bull and Pepsi cans said full-year pre-tax profit climbed to £450 million, meeting market expectations.

Earnings were boosted by the strength of its core beverage cans business, the group said, while its plastics packaging unit disappointed.

‘The underlying improvements are impressive, and the group is now in a position of having options for use of capital,’ said analyst at Oriel Securities, retaining their ‘add’ recommendation for the stock.

Financial stocks also fared well, reversing the previous session’s losses: Royal Bank of Scotland (RBS.L) added 0.4p to 28.66p and Lloyds (LLOY.L) gained 0.3p to 36p.

Elsewhere, Galliford Try (GFRD.L) , a member of Citywire Top Stocks®, jumped 34p to 535p after the homebuilder doubled its interim dividend as its first-half profit before tax surged.

Greek implementation risks

Stock markets elsewhere in Europe wobbled amid doubts over the latest bailout for Greece. Germany’s DAX index lost 0.01% to 6,907 and the FTSEurofirst 300 index of top European shares slipped 0.02% to 1,085. However, France's CAC 40 index took on 0.16% to 3,471.

On Tuesday, European leaders agreed a €130 billion (£109 billion) rescue package for Greece, in a bid to slash Greek debt to the equivalent of 120% of gross domestic product by 2020 – but the plans rely on Greece returning to healthy growth.

Market focus has now turned to the ‘implementation risk’ surrounding the agreement, said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

According to Hardman, the two main near-term concerns are whether Greece will manage to implement last-minute reforms and whether sufficient private sector participation is secured in its debt swap.

‘What remains of the euphoria about an agreement is likely to be put to the test,’ warned Ulrich Leuchtmann, analyst at Commerzbank.

Nonetheless, the euro strengthened 0.17% versus the dollar to €1.326, while the borrowing costs of Italy and Spain – the eurozone nations seen as being most at risk of succumbing to the crisis only two months ago – continued to fall.