Whitbread outshines other stocks after Costa sale

The FTSE 100 index started the day in a low key and proceeded to head lower as global trade tensions intensified following President Trump’s repeated threat to pull the US out of the World Trade Organisation.

The FTSE 100 index started the day in a low key and proceeded to head lower as global trade tensions intensified following President Trump’s repeated threat to pull the US out of the World Trade Organisation.

An early strengthening of the pound added some extra downward pressure but as sterling proceeded to weaken the FTSE managed to recoup some of its losses.

Premier Inn owner Whitbread was the star of the day, opening up 19% after the company said it will pocket $3.9 billion from the sale of its Café Costa coffee chain to Coca Cola.

Initially the company had planned to spin off Costa as a separate company but Coca Cola provided a better offer. Towards the end of the day the firm’s shares were slightly lower but still traded up by a respectable 16%.

The pound lost ground both against the dollar and the euro, trading down 0.25% and 0.01% respectively. The dollar was stronger against the euro but was losing ground against the yen and the Swiss franc. 

Sage unexpectedly loses its CEO

Sage Group announced that CEO Stephen Kelly was unexpectedly stepping down.

His resignation comes in the wake of lower than expected financial results back in April. Kelly presided over a wide-ranging modernisation of the business, including the Sage Business Cloud which is credited with £386 million of annualised recurring revenue.

Kelly will be starting nine months gardening leave this winter. Steve Hare, the company's CFO, takes over as acting COO and will be effectively running Sage until the board can find a new CEO. 

Sage shareholders reacted badly to the news: the share price dropped more than 8% and looked set to close the week under 595.

US stocks set for record August

The rally in US stocks was briefly slowed down by fresh data showing that agricultural exports from the country shrunk sharply, partially because China cancelled some large orders as part of the trade war tit-for-tat.

But, US consumers seemed unaffected by those numbers and the widely followed University of Michigan consumer sentiment index showed the highest level of consumer confidence in 18 years.

At the current rate US indices are on track to close near record highs and to have the best August in four years.

On Monday US markets will remain closed for Labour Day holiday.

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