Corporate news disappoints FTSE investors
Disappointment at the latest round of corporate news sent the FTSE 100 Index into the red today.
Telecoms group BT led blue-chip firms into negative territory after its results failed to excite investors, leaving its shares 3% lower at the close.
With brewer SABMiller and energy supplier Scottish Power also suffering in the wake of their updates, the Footsie ended the session 16.3 points lower at 5423.5.
The mood was echoed across the Atlantic, where the Dow Jones Industrial Average was just below its opening mark at the end of trading in London.
On a busy day for company news, BT lost 6.5p to 208p as a second-quarter underlying earnings fall of 2% to £1.38bn (€2.1bn) proved to be near the bottom end of market expectations.
SABMiller was the next heaviest blue-chip faller, losing 28p to 1053p as traders overlooked a 15% hike in first-half underlying profits to focus on cautious comments about the remainder of its financial year.
Scottish Power was also in the doldrums, down 1.5p to 577.5p as it delivered a sharp rise in profits but remained tight-lipped on takeover speculation.
Oil heavyweights BP and Royal Dutch Shell also proved a drag on the market as their shares fell 13p and 33p to 614p and 1810p respectively.
The bright spot of the market was provided by explorer Cairn Energy as its shares jumped 5% – up 90p to 1850p – after it said a reappraisal of three key oilfields suggested forecasts may have been “conservative”. Cairn is now approaching the record levels seen in September.
Stocks in the financial sector joined Cairn on the way up with HBOS rising 13.5p to 893p, Barclays up 6p to 586p and Alliance & Leicester advancing 4.5p to 865.5p.
Insurers were buoyed by the latest trading update from Royal & Sun Alliance, as cost-cutting and an improved operational performance helped earnings double in the first nine months of the year.
R&SA shares were 1.75p higher at 106.5p while Norwich Union owner Aviva rose 11.5p to 685.5p and Legal & General cheered 1.25p to 111.25p.
Elsewhere, takeover activity continued in the lower tiers of the market as Kingston Communications revealed it had received a conditional approach. Shares jumped 8.5p to 64.5p – a rise of more than 15%.
Food producer Dairy Crest added 5p to 488p, as a fall in profits to £17m (€25.3m) in the six months to September 30 from £32m (€47.6m) last time had been factored in following a warning over the loss of milk contracts.
However, Punch Taverns was in the red despite posting a 28% hike in annual profits to £207m (€308m). The stock lost 2% or 17p to 746p as speculation mounted that it may be preparing a bid for rival group Spirit.
The highest Footsie risers today were Cairn Energy rising 90p to 1850p, Rexam up 15.5p to 512p, Man Group rising 43p to 1690p and Sainsbury’s up 7p to 291.25p.
The heaviest fallers were BT Group losing 6.5p to 208p, SABMiller off 28p to 1053p, BP losing 13p to 614p and Royal Dutch Shell off 33p to 1810p.
