Persimmon, Associated British Foods and Direct Line

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“The blue-chip index opened the week on the front foot although Brexit, sterling and the UK economy continue centre stage,” says AJ Bell Investment Director Russ Mould.

“Housebuilder Persimmon was amongst the biggest blue-chip risers in early trading after good full-year figures and encouraging to the new campaign. The British love affair with their homes shows no signs of abating and the new build housing market remains confident with customer demand being supported by compelling mortgage products. In the first eight weeks of the 2017 spring season the number of visitors to Persimmon’s sites is 7% up on last year. Persimmon’s shares were up by over 1.7%.

Associated British Foods expects its first half results to show excellent progress with Primark continuing to be the jewel in its crown although the group’s grocery, sugar and ingredients businesses are also performing well. Primark’s sales are 11% up on last year on a constant currency basis and 21% higher at actual exchange rates, driven by increased retail selling space. But the full effect of sterling’s weakness against the US dollar on Primark's purchases will result in a greater margin decline in the second half because the group’s currency hedges were at more advantageous exchange rates in the first half.

Direct Line’s shares slumped after the Lord Chancellor announced a sharper-than-expected change in the discount rate for personal injury claims. Direct Line has been applying a rate of 1.5% when calculating its personal injury claims liabilities. This compared with the current rate of 2.5%. But the Lord Chancellor has now cut the rate to minus 0.75% which will have a big impact on Direct Line’s profits. Direct Line’s shares were down by more than 5.4% in early trading.”

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