Footsie falls away from 5000 mark
London shares returned from the holiday weekend in lacklustre form today despite gains by tobacco stocks.
Imperial Tobacco led the FTSE 100 Index risers as investors welcomed the decision of the Court of Session in Edinburgh to reject Margaret McTear’s bid to sue the firm following the death of her husband Alfred from lung cancer in 1993.
The ruling sent shares in Imperial up 3% or 38p to 1489p and rival cigarette maker Gallaher also cheered 16.5p to 848p.
But this was not enough to stop the Footsie falling into the red, off 22.3 points to 4964, as negative momentum from across the Atlantic influenced traders. By the end of trading in London, the Dow Jones Industrial Average had lost around 50 points.
Services group Rentokil Initial was the heaviest top flight faller, down 4% or 6.25p to 147.75p, after broker Dresdner reiterated it as a “sell”. It also followed a report indicating Rentokil could bid for second-tier rival PHS. Rentokil’s smaller counterpart lifted 2p to 97.5p.
In the retail sector, a survey by the CBI found a slight rebound in high street sales last month although the longer-term trend was much gloomier.
With consumer confidence also reported to have fallen in May, shares in many retailers fell – led by GUS down 15.5p to 846.5p and Morrisons off 2.5p at 189p.
But there was better news at the discount end of the clothing market where Peacock lifted 8.75p to 238p after it said like-for-like sales rose 3.6% in the year to March 31.
Primark owner AB Foods, which operates in a similar area to Peacock, rose 9.5p to 800.5p, helped further by a positive broker note on its sugar business.
Back in the top flight, mining stocks were trying to lift the mood, featuring among the highest Footsie climbers. Antofagasta led them with a gain of 20p to 1156p, while Xstrata lifted 10p to 986p and Rio Tinto cheered 14p to 1632p.
The sector was helped by a report indicating stockpiles of copper had fallen to their lowest level in 15 years.
Only a clutch of firms reported results today but independent TV producer Shed Productions added 1.5p to 103.5p after it said profits had quadrupled in the six months to February 28 as interest in the Footballers’ Wives series remained high.
Entertainment Rights surged 9%, or 2.25p to 26.5p, after clinching a deal with HBO to broadcast Postman Pat episodes in the United States. Analysts said it marked a breakthrough in the global commercialisation of the children’s favourite.
And warranty provider Domestic & General advanced 1% or 9p to 740p as it shrugged off the impact of slower consumer spending to post a 26% hike in annual profits.
The highest Footsie climbers today were Imperial Tobacco up 38p to 1489p, Gallaher rising 16.5p to 848p, Antofagasta up 20p to 1156p and Schroders NV rising 10.5p to 695.5p.
The heaviest fallers were Rentokil Initial down 6.25p to 147.75p, Cadbury Schweppes off 13.5p to 536p, Unilever down 13p to 536.5p and Capita off 8.75p to 383.25p.
