Engineering, gas and transport

The headline index fell back in early trading as uncertainty over oil prices and the global economy continued to be the major theme. Traders seem undecided on whether to hedge towards safe haven assets such as gold or opt for the more volatile equity markets. Wall Street and Asian markets were higher overnight.

“Engineering group BAE Systems cheered investors with a total dividend slightly ahead of market forecasts,” says AJ Bell Investment Director Russ Mould.

“Sales have increased by £1.3bn and the large order backlog of nearly £37bn underpins confidence in the future prospects for the business.

“British Gas customers may be forgiven for thinking that the recent price cut is long overdue given the 31% jump in its profits last year. But the picture for British Gas’s parent, Centrica, is not quite so rosy. It cut its dividend after adjusted operating profits slumped by 12% and warned that the lower commodity price environment would continue to have an impact on earnings.

“Bus and rail group Go-Ahead’s shares surged on a 6.5% rise in its interim dividend. Adjusted pre-tax profits were up 26.1% in the first half and it maintained its full-year forecasts following a good performance from both its bus and rail divisions.”

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