By Julien Ponthus
LONDON (Reuters) – UK shares dipped on Wednesday along with other European bourses ahead of a final vote in the U.S. House of Representatives that would allow Donald Trump to sign massive tax cuts into law.
The FTSE 100 <.FTSE> shed 0.1 percent in line with the pan-European STOXX 600’s <.STOXX>.
“How much higher can we go given that most of the gains seen this year have been predicated on there being some sort of fiscal stimulus or tax reform, which now looks like being delivered,” said CMC Markets chief analyst Michael Hewson.
“From an investment point of view that means that investors have a decision to make as we head into 2018. How much more gas is in the tank for this rally given the gains seen already,” he added.
NMC Health <NMC.L> posted the worst performance of the index, losing 2.3 percent after it reiterated its guidance for 2018 and gave an update on its strategy.
“This in our view could signal potential M&A which may be in newer geographies or capabilities”, Jefferies said in a note, adding it would wait for a conference call with investors “for further clarity”.
Barratt Developement <BDEV.L> was also suffering, down 1 percent as Liberum published a note on UK housebuilders where it was the only stock in the sector to get a “sell” rating.
Among the smaller constituents of the mid-cap index FTSE 250 <.FTMC>, Drax Group <DRX.L> fell 3.7 percent as it cut its full-year core earnings forecast by 10 million pounds.
In the small-cap universe, Low & Bonar <LWB.L> plunged over 20 percent at the open after the resignation of its CEO.
Carillion <CLLN.L> on the other hand was up 6.1 percent after it moved the start date for new chief executive Andrew Davies forward to Jan. 22 from April 2.
Still in the matter of corporate governance, LSE<LSE.L> added 0.1 percent after a push by activist hedge fund TCI to oust its chairman was heavily defeated on Tuesday and bookmaker William Hill <WMH.L> was up 0.4 percent after it named Roger Devlin its chairman-designate.
Tesco <TSCO.L> rose 0.2 percent after its 3.7 billion pound takeover of wholesaler Booker <BOK.L> was cleared by Britain’s competition regulator.
In terms of sectors, the mining sector posted the best performance and added the most points to the idex with Rio Tinto <RIO.L> up 1 percent and BHP Billiton up 0.7 percent.
(Reporting by Julien Ponthus; Editing by Keith Weir)