Vodafone disappoints FTSE
The telecoms sector proved a drag on the London market today after an update from heavyweight Vodafone met disappointment.
The mobile-phone giant slumped more than 7% after taking a cautious stance on revenues and margins and was followed into the red by BT and Cable & Wireless.
This contributed to the FTSE 100 Index slipping 25.4 points to 5444.6 by mid-morning, as a poor reception to results from drinks giant Diageo also weighed on the mood.
On a busy day for corporate news, Vodafone was the heaviest blue-chip faller after it said higher levels of mobile phone usage and the greater impact of lower termination rates – calls connected to other networks – were likely to reduce the rate of revenues growth.
Vodafone lost 11p to 134p, with more than 695 million shares changing hands in the first few hours of trading – far more than any other stock.
The negative sentiment rubbed off on telecoms group BT, losing 5.25p to 201.75p and Cable & Wireless, off 2.5p to 120.75p.
But rival O2 was shielded by the £17.7bn (€26.3bn) takeover offer from Spanish firm Telefonica, adding 0.25p to 195.75p.
Diageo also featured among the heaviest fallers, losing 30.5p to 832p after it warned that the hurricanes that battered the United States in recent months could affect its growth in the first half.
Outside the top flight, Northern Foods lifted 8.75p to 153.5p after the company overcame tough trading conditions to post a 7% hike in half-year underlying profits.
But difficulty in tempting French readers to buy magazines at news-stands and the cost of new launches was hurting interest in publisher Emap.
Emap fell 1.5p to 857.5p after pre-tax profits fell 2% to £95m (€141.2m) in the first half of its financial year.
Fashion house Burberry fell back as it voiced fears that wholesale customers were not ordering as many of its clothes as before. Shares lost 2.75p to 392.75p.
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