Diageo results disappoint London market
The London market tumbled into the red today as shares in drinks company Diageo lost more than 3% in value despite a solid set of results.
Analysts blamed profit-taking after a recent strong run for the shares, leaving the stock lower even though it met expectations with a 7% rise in underlying profits over the full year.
With little else around to excite investors, the FTSE 100 Index fell 15.1 points to 5914.2 by mid morning.
There was little direction offered from New York, where the Dow Jones Industrial Average closed up 13 points last night as investors awaited economic data later in the week, as well as Europe’s decision on interest rates.
Diageo admitted challenges in the Irish beer market had “adversely impacted” on top line growth in Europe as it saw Guinness sales in the Emerald Isle decline 3% during the year. Shares fell 31p to 928p.
Cruise firm Carnival was at the top of the risers board with a gain of 118p to 2308p – more than 5%- after Morgan Stanley cut its price target but said that although in the short term news remains negative it believes this is priced in.
Market rumours suggesting Scottish Power could be the subject of an approach from Germany’s RWE caused its shares to spark earlier but the momentum was not maintained and they later fell to stand half a penny down at 625p.
Also on the downslide were the miners despite a positive start. Anglo American was off 6p to 2326p, BHP Billiton lost 3p to 1008 and Kazakhmys slipped 15p to 1228p.
Elsewhere, a move by Las Vegas casino giant Harrah’s Entertainment for London Clubs International caused shares in rival Stanley Leisure to jump 27.5p to 646p.
Stanley had been working on a merger with LCI, but now looks likely to become a bid target for Harrah’s. LCI surged 32%, or 32p to 130.75p.
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